Friday, April 20, 2007
Exploring Market
Physics
The swing trader faces a considerable challenge
mastering the puzzle of market movement. While most of us recognize conflict
and resolution within the price chart, we fail to utilize these dependable
mechanics in our trading strategies. Fortunately, repeating elements of the
charting landscape offer a powerful context to understand and manage these
vital aspects of trend development. Through repeating dynamics of crowd
behavior, price action tends to mimic classic rules that modern scientists
apply to our physical universe.
This is
probably no accident of nature. Emotion and mathematics interact continuously while
they draw the Fibonacci retracements that we see every day through our chart
analysis. This fascinating relationship offers a glimpse into the profound
order beneath common price movement. At its core, convergence-divergence
between these two forces helps us to understand and trade the market swing. For
example, we may search the chart for a reversal or breakout pattern that spells
opportunity, but we also watch the ticker tape to gauge the crowd's emotional
intensity, and to predict where it will burn out or shift gears.
Successful
traders draw intuitively upon these bilateral market mechanics as they master
the art of speculation. Their advanced skills correspond with the peculiar
logic required to unify left and right brain functions into a focused trading
methodology. Perhaps future technicians will quantify these profound
interactions between herd behavior and physical law, and even open up a new
branch of technical price prediction. In the meantime, let's explore some
primary characteristics of these underlying market physics...
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More...
Trading Ideas &
Picks
Swing
Trade of the Week
MCRS: Stock ended its uptrend with a MA crossover down and has since
been on a countertrend rally to the downtrending MAs. Look to establish a short
at 54.24...
Trading
Ideas - Read More
Trading Ideas &
Picks
Amedisys Inc- AMED - Rising trendline
support
AMED: Recent price action is suggesting that we'll see a retest of a
nearby support level. The rising trendline has been able to prop up the price
several times over the past year and it will be interesting to see if this
story will continue...
Trading
Picks - Read More
Trading Education
Tutorial
Courtesy of
Nirvana Systems
Saucer Patterns
Rare Pattern Is One of the Most Predictive
One of the most predicitive chart patterns you will come across is
the saucer pattern. Saucers are also referred to as "bowls" or even
"rounded tops or bottoms", and one look at this pattern tells where
these names are derived from. However, there is a problem with saucer patterns
- they're hard to find.
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More...
NASDAQ Chart of the Day
Courtesy
of Nirvana Systems
VRSN
is holding at a triple touch resistance level at 27.00, which has held since
December. Watch this zone for a break or bounce for the next key move.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
A
has been trading within a very clear trading range since late last August and
is now holding at the top of the range at 35.80, which is quite a resistance
level. If A cannot rise above this zone yet again, we could see another drop
back toward support at 30.25.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Thursday, 4/19 for Friday's market.
|
Key DOW Levels for 4/20
|
|
UP
|
Above 12,850
|
|
DN
|
Below 12,725
|
V-Bottom Reversal...
- Dow sells off at Open, but reverses course to end day on
positive note. The index formed a v-bottom pattern at support at 12,735 and
proceeded to trended steadily higher back above the breakeven point for the day
to end the session with a 5 point gain, which is quite bullish.
- The NASDAQ and S&P each reversed from early lows today and continue to
build out within evolving consolidation ranges. Look for more range development
until a breakout occurs.
Summary
The Dow ended the day above 12,800 for the second straight session and
continues to build out a large trading range that could offer much bigger
strength ahead. Continue to watch the boundaries of this range for key
directional movement.
Read More...
