Wednesday, March 21, 2007
Trading Education
Tutorial
Five Fibonacci Tricks
Fibonacci jumped into the technical mainstream
late in the bull market. Futures traders had it all to themselves until
real-time software ported it over to the equity markets. Its popularity
exploded as retail traders experimented with its arcane math and discovered its
many virtues.
Fibonacci ratios describe the interaction between trend and countertrend
markets -- 38%, 50% and 62% retracements form the primary pullback levels.
Apply these percentages after a trend in either direction to predict the extent
of the countertrend swing. Stretch a grid over the most obvious up or down
wave, and see how percentages cross key price levels.
Convergence between pattern and retracement can point to excellent trading
opportunities. Keep in mind that retracements work poorly in a vacuum. Always
examine highs, lows and moving averages to confirm the importance of a specific
level...
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Technical Indicators
CCT Bollinger Bands
Histogram
The CCT Bollinger Band Oscillator, also sometimes referred to as
the CCT Bollinger Band Oscillator, reconfigures John Bollinger's classic
Bollinger Bands (envelopes plotted at two Standard Deviations above and below a
moving average) by drawing two parallel lines replacing the erratic envelopes.
The parallel lines represent a measurement of two Standard Deviations from the
mean and are assigned a value of zero and 100 on the chart. The indicator
represents the price as it travels above and below the mean (50%) and outside
the two standard deviations (zero and 100). Penetration of the upper band
represents overbought conditions while penetration of the lower band signifies
oversold conditions.
Usage of the CCT Bollinger Band Oscillator to identify "failure swings"
and "divergences" can lead to significant reversals...
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Trading Education
Tutorial
Courtesy of
Nirvana Systems
Double Tops and Bottoms
Waiting for the
Setup to Complete Results in Profits
There are various chart patterns that help us find good reversal
candidates. Of the major reversal patterns, the double top or bottom is not
only one of the most recognizable, but also one of the most predictive.
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NASDAQ Chart of the Day
Courtesy
of Nirvana Systems
DISCA stopped the recent advance smack into a clear double top
resistance level at 17.45, which could offer an early signal for Shorts. Watch
for weakness below 16.75.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
IFS
may be forming a clear volume climax reversal pattern after topping out at
31.91 with increased volume. Watch for a break below 28.50 for a potential fill
of the large gap.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Tuesday, 3/20 for Wednesday's market.
|
Key DOW Levels for 3/21
|
|
UP
|
Above 12,350
|
|
DN
|
Below 12,200
|
Slow Advance...
- Dow pushes slowly higher throughout session, gains 62 points.
The index continues to push slowly higher, but is now approaching major
resistance at 12,350.
- The NASDAQ and S&P each pushed slowly higher today, closing at the day's
highs. Look for continued potential sideways movement at resistance, unless a
move occurs away from this zone.
Summary
The Dow closed the day near the highs of the session after trending slowly
higher throughout the day. The index continues to hold within the large trading
range, but is approaching key resistance at 12,350. Watch this zone closely.
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