Monday, July 30, 2007
Technical Indicators
Market Facilitation
Index
Market Facilitation Index synthesizes both price
and volume data in an effort to improve trading accuracy. In his book Trading
Chaos, Williams identified four types of trading sessions: Fakes, Fades,
Squats, and Greens.
The combination of lowered volume with a rising MFI is known as a
"Fake." As there is no real foundation for change behind a stock
except for market activity on the floor, the price eventually reverses itself.
A "Fade" is when volume is down and the MFI is also down. In essence,
the market is bored and interest in the stock fades. Expect the price to move
in the opposite direction.
When volume is up while the MFI is down, the condition is referred to as a
"Squat." Think of the stock crouching down like a sprinter before a
race. Movement after the squat gives a clue to future to direction.
When volume and the MFI are both up, the situation is "Green." This
is a strong signal to follow the trendline...
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Trading Education
Tutorial
Courtesy of
Nirvana Systems
Island Reversals
Stand Alone Formation Speaks Volumes
Reversals tend to occur slowly, with securities
forming double bottoms, higher lows, head and shoulders patterns, etc. before
starting a new trend. However, sometimes we see a dramatic reversal
immediately, and one of the best indications of these types of reversals is
Island Tops and Bottoms.
Read
More...
NASDAQ Chart of the
Day
Courtesy
of Nirvana Systems
AMGN is winding up at lows within
the boundaries of a narrowing consolidation. A breakout from this range could
spark a steady move in the direction of the break. Watch 58.00 up, and 54.00
down for direction.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
MCD has broken a clear
consolidation to the downside at 50.00 and looks to be headed much lower. Look
for more selling pressure beneath the bottom of this pattern.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Friday, 7/27 for Monday's market.
|
Key DOW Levels for 7/30
|
|
UP
|
None
|
|
DN
|
Below 13,200
|
Continued Weakness...
- Dow continues lower, reaches critical support.
The index closed the day with another big loss of 208 points and is now holding
at critical support, which we will watch closely next week.
- The NASDAQ and S&P each sold off late in the session and continue to
trend steadily lower. Look for potential continuation patterns to build out at
lows before another big move occurs.
Summary
The Dow closed the day at the lows of the session with another big decline and
is now holding at the neck line of a highly bearish H&S pattern. Look for a
potential bounce early next week, but for overall weakness to remain intact.
Read More...
