Monday, November 20, 2006
Trading Education
Tutorial
Overbought / Oversold / Overload
Analysts love to show off by proclaiming that
the markets have become overbought or oversold. Unfortunately, few of us seem
to understand what these terms really mean or what we should do when these
moments of truth arise.
Should we run for the hills because a market is overbought, or perhaps load up
the boat because it's oversold? And how do we know when one of our trades might
fall prey to one of these extreme conditions?
The best way to understand overbought or oversold markets is to study the
nature of supply and demand. At any given moment, a finite pool of buyers and
sellers is available to take action on a particular stock. The trading activity
of this crowd usually stays within fairly narrow boundaries.
But imbalances develop over time and force one side to pull the trigger,
sometimes prematurely. This "uses up" that side of the market and
awakens price mechanics that favor the other side...
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More...
Trading Education
Tutorial
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
INTU is breaking a major lower trend line at 34.00, which has held firmly
for many months. This break occurred via a breakaway gap, which further
indicates continued weakness.
Daily Trading Signals
NYSE Chart of the Day
ENT has gotten a huge upside break through a major upper trend line via
a solid breakaway gap and increased volume, which is very bullish. Look for
more strength out of this stock.
Daily Trading Signals
Trading Ideas &
Picks
Weekly
Swing Ideas Report for November 20th - November 24th, 2006
SwingTracker Scans: Stock Picks - Long and Short Potential Swing Candidates ...
SwingTracker Scans: Trading Window, Force Swings (ABB,ABB Ltd ADS, DBD,Diebold,
Inc, HON,Honeywell Intl, GM,Genl Motors, MA,MasterCard IncA), Triangle
(BRCM,Broadcom CorpA, WMS,WMS Indus, AKAM,Akamai Technologies, SKS,Saks Inc,
SBAC,SBA Communications), Revival, Reversals (SRDX,SurModics Inc, EGLT,Eagle
Test Systems, TTH,Telecom HOLDRs Tr Dep Receipt), and more...
Trading
Ideas - Read More
Trading Ideas &
Picks
The QQQQ Report for November 20th -
November 24th, 2006
QQQQ:
We mentioned that Monday and Tuesday's trading action could be of
"strategic importance" because a break above the resistance of $43 or
below the support of the ascending trendline would determine the QQQQ's
short-term direction. Monday's close above $43 set the pace for a week of
impressive gains. We expect the upward momentum to continue over the short term
until the QQQQ moves below the newly formed support of $43...
Trading
Picks - Read More
Daily Market Commentary
Updated Friday, 11/17 for Monday's market.
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Key DOW Levels for 11/20
|
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UP
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Above 12,350
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DN
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Below 12,250
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New Highs...
- Dow reverses from early lows, rallies solidly through 12,200.
The index has now come within 30 points of hitting the 12,365 consolidation
target, which could be hit just prior to a potential pull-back in this index.
- The NASDAQ and S&P each continue to hold near the overall highs, building
consolidations in the process. Watch these ranges for key movement early next
week.
Summary
The Dow closed the day with another new record high and continues to tack on
points within the current uptrend. The Dow should remain quite bullish above
12,200, but we could see a near-term retracement before another explosive
breakout is seen.
Read More...
