Wednesday, August 29, 2007
Technical Indicators
Zig Zag
The Zig Zag indicator shows past performance trends
and only the most significant changes. It does this by filtering out any
changes less than a specified amount.
The Zig Zag indicator is used primarily to help you see changes by highlighting
the most significant reversals. Understand that the last segment in a Zig Zag
chart can change based on changes in the underlying plot, price being only one
example. That is, a change in a security's price can change a previous value of
the indicator. Since the Zig Zag indicator adjusts its values based on
subsequent changes, it has perfect hindsight into what prices have done. Do not
try to create a trading system based on the Zig Zag indicator, as it to be used
to illustrate historical patterns.
The Zig Zag indicator is calculated by placing imaginary points on a chart when
prices reverse by at least the specified amount. Straight lines are then drawn
to connect these imaginary points. Any changes in prices that are less than the
specified amount are ignored.
Read More...
Trading Education
Tutorial
Courtesy of
Nirvana Systems
Trading Ranges
Big Moves Occur Outside of the Range
A trading range is basically a horizontal channel
in which a security moves from the high and low of the channel for an extended
amount of time. Obviously, the upper level of the range can be considered
resistance and the lower level represents support. Trading within a range is
possible, but it's the breakout from the range that provides the best
opportunities.
Read More...
NASDAQ Chart of the
Day
Courtesy
of Nirvana Systems
ALXN is testing support at 56.50,
which happens to be the neck line of a clear head and shoulders pattern, which
is typically a very bearish pattern. Look for more weakness should 55.25 be
crossed.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
RRI has formed a large
head-and-shoulders pattern that could spark a big decline ahead. This pattern
has formed at highs over the last several months, developing a clear neck line
at 23.65. A break through this zone could spark a sell-off of about 7 points.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Tuesday, 8/28 for Wednesday's market.
|
Key DOW Levels for 8/29
|
|
UP
|
Above 13,400
|
|
DN
|
Below 13,000
|
Heavy Sell-Off...
- Dow sells off early, drops hard into the Close.
From prior commentary, "...The fact that the Dow has rallied from 12,500
and stopped precisely at this upper line indicates many traders are watching
this level. If the Dow cannot rise above this zone with follow-through, we will
likely see another wave of selling to new lows..."
The Dow opened the session with selling right from the beginning, which never
let up the rest of the session, as seen across all timeframes. The Dow dropped
significantly from the major upper trend line at 13,400 and sold off heavily
back toward the 13,300 level, as seen int he Daily and 60 Minute Charts. The
Dow ended the day with a big 280 point loss, but several more days of heavy
selling could be seen.
Read More...
