Wednesday, May 16, 2007
Trading Education
Tutorial
Courtesy of
Nirvana Systems
Consolidations
Sideways Movement Gives Indication of Future Price Direction
A consolidation is a place where buyers and sellers are very
closely matched in numbers. As the battle ensues, others notice that the market
is consolidating, and begin considering to get on board. As soon as a break
from the consolidation occurs, the latent buyers or sellers usually begin
taking positions.
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Trading Ideas &
Picks
Weekly Market Recap May 14th - May 18th
May 14, 2007 - All trends are still intact for the uptrend. The
warning signs coming for the short factors on the Daily chart with prices below
the 5 day EMA and Stocahstics nearly entering into a downtrend. These two
factors can often precede a change in the Hourly trend. Remain cautious with
the market in overbought territory...
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Trading Ideas &
Picks
The Weekly Report for May 14th - May
18th - Can The Rally Continue?
The Dow's run into uncharted territory continued as the index has
notched an impressive 25 of 31 sessions in the positive. The results from
various economic realeases will continue to be the important catalyst in the
weeks ahead as any further weakness could trigger a selloff toward the support
of the 50/100-day moving averages...
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Technical Indicators
Average True Range
Average True Range or ATR is a measurement of volatility. It
measures the average of true price ranges over time. The True Range is the
greatest distance between today's high to today's low, yesterday's close to
today's high, or yesterday's close to today's low. The Average True Range is a
moving average of the True Ranges.
High ATR values often occur at market bottoms following a "panic"
sell-off. Low Average True Range values are often found during extended
sideways movement, like as those found at market tops or after consolidation
periods. True Range is used in Welles Wilder's Directional Movement indicator
as well as Donald Mart's Master Trading Formula and is a common volatility
ratio. The ATR can be used in a channel breakout method of trading by adding or
subtracting from the previous bar's close or the current bar's open.
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NASDAQ Chart of the Day
Courtesy
of Nirvana Systems
CHAP
looks to be turning down off a clear double top resistance level at 75.50,
which could be very bearish after this extensive rally. Look for a retracement
to occur off these levels, likely toward 64.50.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
AEE
has topped out at key resistance yet again in the 55.00 zone, as this level has
held firmly since October. Watch for another possible sell-off from this zone
if resistance cannot be crossed and held.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Tuesday, 5/15 for Wednesday's market.
|
Key DOW Levels for 5/16
|
|
UP
|
Above 13,500
|
|
DN
|
Below 13,200
|
Pop and Reverse...
- Dow rallies to new all-time highs, but sells off to the Close.
The index reversed steadily to the Close, but managed to book a 37 point gain.
- The NASDAQ and S&P each held firmly beneath key resistance and dropped
steadily to the Close. The NASDAQ, in particular, looks poised for a heavy
downside move given the large saucer top that continues to build out.
Summary
The Dow ended the day with a late-day decline that nearly wiped out all the
day's gains, but still remains quite bullish within the steady uptrend. The
index could be testing the lower trend line soon at around 13,300, but more
strength is likely until this line can be broken and held.
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Trading Education
Tutorial
Courtesy of
Nirvana Systems
Triangles
Tightening Price Action Leads to a Breakout
There are various forms of consolidation and they occur anytime
there is an equilibrium of buyers and sellers. One of the most predictive
consolidation formations is the triangle.
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Trading Education
Tutorial
Courtesy of
Nirvana Systems
Saucer Patterns
Rare Pattern Is One of the Most Predictive
One of the most predicitive chart patterns you will come across is
the saucer pattern. Saucers are also referred to as "bowls" or even
"rounded tops or bottoms", and one look at this pattern tells where
these names are derived from. However, there is a problem with saucer patterns
- they're hard to find.
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