Thursday, May 31, 2007
Technical Indicators
Directional Movement
Index (ADX)
Directional Movement helps determine if a security is
"trending." Developed by Welles Wilder and explained in his book, New
Concepts in Technical Trading Systems, it can be used either as a system on its
own or as a filter on a trend-following system.
Two lines are generated in a DMI study, +DI and -DI. The first line measures
positive (upward) movement and the second number measures negative (downward)
movement. A buy signal is given when the +DI line crosses over the - DI line
while a sell signal is generated when the +DI line crosses below the - DI line.
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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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More...
NASDAQ Chart of the Day
Courtesy
of Nirvana Systems
ALKS
has turned down off major resistance at 18.00 and has now gapped down through a
clear lower trend line at 16.50, which means we could see more selling pressure
ahead.
Daily Trading Signals
NYSE Chart of the Day
Courtesy
of Nirvana Systems
BXP
has gotten a nice bounce off the clear support/fulcrum level of 107.00 and
looks to be headed higher. Look for more strength back towrad the highs of
February at around 133.00.
Daily Trading Signals
Daily Market Commentary
Courtesy of
Nirvana Systems
Updated Wednesday, 5/30 for Thursday's market.
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Key DOW Levels for 5/31
|
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UP
|
Above 13,700
|
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DN
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Below 13,450
|
Triangle Break...
- Dow rallies from early lows, breaks triangle to upside en route
to big strength. The index got a big upside break through the top of the
triangle mentioned in yesterday's commentary and still has about another 100
points until the target is reached.
The NASDAQ and S&P
- The NASDAQ and S&P each rallied steadily throughout the session after
forming v-bottom lows. Look for more strength ahead, especially if resistance
levels are crossed.
Summary
The Dow ended the day with a huge rally after bouncing off the 13,500 level
late in the day. The index is sitting at all-time highs and continues to hold
above the 13,400 zone, which indicates more medium term strength ahead.
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