Monday, April 23, 2007
Trading Education
Tutorial
Hell's Triangle
The classic Descending Triangle illustrates the
painful rollover from bull to bear market better than any other pattern. But
why does it work with such deadly accuracy? Most traders don't understand how
or why patterns predict outcomes. Some even believe these important tools rely
on mysticism or convenient curve fitting. The simple truth is more powerful:
congestion patterns in technical analysis reflect the impact of crowd
psychology on changes in price and momentum.
Shock and fear quickly follow the first reversal marking a triangle's major
top. But many shareholders remain true believers and expect their profits will
return when selling dissipates. They continue to hold positions as hope slowly
replaces better judgement. The selloff then carries further than anticipated
and their discomfort increases. Just as pain begins to escalate, the correction
suddenly ends and the stock firmly bounces.
For many longs, this late buying reinforces a dangerous bias that they were
right all along. Renewed confidence even prompts some to add to positions. But
smarter players have a change of heart and view this new rally as a chance to
get out. As they quietly exit, the strong bounce loses momentum and the stock
once again turns and fails. Those still riding the issue now watch the low of
the first reversal with much apprehension...
Read
More...
Trading Ideas &
Picks
The QQQQ Report for April 23rd - April
27th - A New Six-Year High
QQQQ: Many traders will watch for the $44.80 level to provide
short-term support in the event of a more significant pullback. Friday's
bullish price action briefly sent the QQQQ to a new six-year high, which will
cause many traders to watch closely to see if the bullish momentum can
continue...
Trading
Picks - Read More
Trading Ideas &
Picks
Weekly Swing Ideas Report for April
23rd - April 27th
Stock Picks - Long and Short
Potential Swing Candidates ... SwingTracker Scans: Trading Window, Force Swings
(SLM SLM Corp, BTU Peabody Energy, ECA EnCana Corp, AL Alcan Inc, TWC Time
Warner CableA), Triangle (MOT Motorola, Inc, WEN Wendys Intl, YUM Yum Brands,
MNTA Momenta Pharmaceuticals, WLT Walter Industries), Revival, Reversals,
Breakouts (XOM Exxon Mobil, CVX Chevron Corp, BID Sothebys, HUBG Hub Group, DFR
Deerfield Triarc Capital), and more...
Trading
Ideas - Read More
Trading Education
Tutorial
Courtesy of
Nirvana Systems
Volume Climax
Volume Helps Identify Reversals
Various price patterns can alert us to potential reversal
candidates. Trendline Breaks, Support and Resistance Levels, Fibonacci
Retracement Levels and other price information are valuable in determining a
change in direction for a security. However, one of the most overlooked chart
patterns that help us determine reversals is not reflected in the price itself.
Volume climaxes are easily identifiable and valuable in assessing a change in
market sentiment.
Read More...
NASDAQ Chart of the Day
Courtesy
of Nirvana Systems
XPRT
has formed a large inverted head-and-shoulders pattern at the overall lows with
a clear horizontal neck line (resistance) at 15.40. This pattern is typically
highly bullish and has the potential to spark a move that could fill the prior
gap at 18.40. Watch resistance closely.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
LRW
took a large gap up yesterday and broke below yesterday's lows today,
indicating a potential fill of the gap could be ahead. Look for more weakness
below 21.00 to indicate that the exhaust gap could be completed.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Friday, 4/20 for Monday's market.
|
Key DOW Levels for 4/23
|
|
UP
|
Above 13,000
|
|
DN
|
Below 12,900
|
Sharp Advance...
- Dow rallies strong at Open, pushes to new highs at the Close.
The index reached the 12,950 level and held steady throughout the day before
rallying to the Close with a big 153 point gain.
- The NASDAQ and S&P each rallied in strong fashion this morning and where
able to hold gains to the Close, which is a very bullish sign. Look for
potential ranges to form at highs, unless near-term support is crossed.
Summary
The Dow closed the day with a solid gain after opening the day in a highly
bullish manner. The index has rallied steadily higher over the last seven days
and could be nearing an over-bought nature. A break back below 12,900 could
bring about a much-needed retracement before more strength is seen.
Read More...
