Monday, May 07, 2007
Technical Indicators
Average Directional
Movement Index Rating
The Average Directional Movement Index Rating (ADXR) is an attempt
to quantify momentum change in the ADX. It is calculated by adding the current
ADX value and an ADX value n periods back then dividing that sum by two.
This smoothing step results in the ADXR being slightly less responsive than the
ADX. Where the ADXR shines is its ability to compensate for the variance of
excessive tops and bottoms. It is especially helpful when used in conjunction
with trend-following strategies. Strategies that rely on volatility as an
indication of movement often fail to take into account movement does not
necessarily indicate volatility. ADXR provides information pertaining to the
strength of a trend, helping to manage the risk of trading in volatile markets
that fluctuate between trending and non-trending. The interpretation of ADXR is
the same as that for ADX, the higher the value, the stronger the trend
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Trading Ideas &
Picks
Weekly Market Recap April 30th - May
4th
May 7, 2007 - The longer term trend is up. Keep your eyes on the
20 day EMA for clues on the sustainability of the current uptrend. The short
term trend is up. We do remain cautious with the Stochastics in an overbought
condition. Keep a close watch on the Hourly MAs for signs of a change in trend.
...
Trading
Picks - Read More
Trading Ideas &
Picks
The QQQQ Report for May 7th - May 11th
- Overbought RSI
QQQQ: Friday's move to a new six-year high clearly shows that the bulls
are in control, but as you can see from the chart below, many traders will
likely pay attention to the overbought RSI reading (69.69) because the
indicator is suggesting that the bull run may be getting overextended...
Trading
Picks - Read More
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
INAP
has pulled back 50% of the prior rally and is now headed back to the upside on
increased volume. We could see new highs fairly soon in this stock.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
OMX
sold off heavily yesterday, but reversed sharply today in what looks like a
potential volume climax reversal. The volume has increased in big fashion and
could help to spark a key upside reversal from current levels. Watch 46.00 for
more strength.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Friday, 5/4 for Monday's market.
|
Key DOW Levels for 5/7
|
|
UP
|
Above 13,300
|
|
DN
|
Below 13,175
|
Still Consolidating...
- Dow pulls back from early highs, continues to build out key
range. The index closed the day with another gain of 23 points and continues to
hold at overall highs.
- The NASDAQ and S&P each reversed sharply from early gains this morning,
creating a potentially bearish pattern. The indexes have been highly bullish
lately, but this pattern could bring about near-term weakness.
Summary
The Dow closed the day with another gain, as the index continues its blistering
pace higher. The index is now building out a range from 13,200 to 13,300, which
we will want to watch as it determines its next key directional move.
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