Wednesday, August 08, 2007
Technical Indicators
Standard
Error Bands
Created by Jon Anderson,
Standard Error Bands are two moving averages based on standard error levels
above and below the Linear Regression Indicator. As a type of envelope, they
are similar in appearance to Bollinger Bands but are calculated and interpreted
quite differently. While Bollinger Bands are plotted at standard deviation
levels above and below a moving average, Standard Error Bands are plotted at
standard error levels above and below the linear regression plot.
Andersen recommends default values of "21" for the number of periods,
a 3-day simple moving average for the smoothing, and "2" standard
errors. He also notes that very short time frames tend to produce unreliable
results.
Because the spacing between Standard Error Bands is based on the Standard Error
of the security, when the two bands are close together, it signifies a strong
trend. When the two bands are far apart, prices are more volatile and will tend
to fluctuate between the two bands. If the bands are close and then begin to
widen, it may signify that the trend is weakening and may possibly be due for a
reversal...
Read More...
Trading Education
Tutorial
Courtesy of
Nirvana Systems
Moving Averages and the Trend
Moving Averages Help Us Identify Trend Reversals
One of the old axioms of technical analysis is that
'the trend is your friend'. This holds true, as long as you trade in the
direction of the trend. However, your 'friend' has two faces, and can turn on
you to eliminate profits (and your friendship!). Trend reversals can occur at
any time and one of the important skills a trader must possess is the ability
to identify a reversal. It is easy to exit a position too early if we
over-anticipate a trend reversal, and just as easy to watch our profits
evaporate if we are too slow to exit the trade.
Read
More...
NASDAQ Chart of the
Day
Courtesy
of Nirvana Systems
PTEN got another nice bounce of the
major 21.15 support level, which has held firmly since last Fall. Look for more
strength above this level, possibly back toward the 28.00 range.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
MNT got a big breakaway gap through
the top of a clear consolidation range on increased volume, which is quite
bullish. If the stock can remain above 44.00, we could see much more strength
ahead.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Tuesday, 8/7 for Wednesday's market.
|
Key DOW Levels for 8/8
|
|
UP
|
Above 13,800
|
|
DN
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Below 13,300
|
Volatile Afternoon...
- Dow breaks above 13,500, swings wildly into the
Close. The index gained 36 points on the session, but continues to look weak in
the longer term picture.
- The NASDAQ and S&P each trended mostly higher today, but each ran into
resistance late in the day. Watch resistance closely for signs of more
near-term strength or more overall selling.
Summary
The Dow closed the day with a modest gain after experiencing high volatility
late in the day. The index continues to hover around the 13,500 level and could
continue to push modestly higher. However, the index continues to look weak and
a strong break below 13,300 could make for another big wave of selling.
Read More...
