Tuesday, November 28, 2006
Technical Indicators
Moving
Average, Triple Exponential
The Triple Exponential Moving Average (TRIX) is an oscillator used to identify
oversold and overbought markets as well as a momentum indicator. For use as an
oscillator look for a positive value to indicate an overbought market and a
negative value indicate an oversold market. When TRIX is used as a momentum
indicator, a positive value suggests increasing momentum just as a negative
value suggests momentum is decreasing. Some believe that the TRIX crossing
above the zero line is a buy signal and a closing below the zero line is a sell
signal. Divergence between price and TRIX can also indicate significant turning
points in the market.
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Trading Education
Tutorial
Moving Averages and the Trend
Moving Averages Help Us Identify Trend Reversals
One of the old axioms of technical analysis is that 'the trend is your friend'.
This holds true, as long as you trade in the direction of the trend. However,
your 'friend' has two faces, and can turn on you to eliminate profits (and your
friendship!). Trend reversals can occur at any time and one of the important
skills a trader must possess is the ability to identify a reversal. It is easy
to exit a position too early if we over-anticipate a trend reversal, and just
as easy to watch our profits evaporate if we are too slow to exit the trade.
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More...
NASDAQ Chart of the Day
GOOG
took a moderate gap down today and dropped steadily throughout the session,
breaking a clear lower trend line in the process. Look for an easily pull-back
toward the 38-50% Retracement zones, which lie from 445 to 462. Such a
pull-back could net nice points in a short span of time.
Daily Trading Signals
NYSE Chart of the Day
HLF
is holding firmly at major resistance at 41.35, which has held since May.
Today's reversal could be an early sign that we could get another big decline
from this resistance level.
Daily Trading Signals
Daily Market Commentary
Updated Monday, 11/27 for Tuesday's market.
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Key DOW Levels for 11/28
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UP
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Above 12,375
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DN
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Below 12,050
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Huge Decline...
- Dow breaks 12,250, drops steadily to the Close. The index also
broke a major lower trend line in the process, which could further indicate
bigger selling ahead.
- The NASDAQ and S&P each sold off heavily from recent highs and are now
holding near lows not seen in two weeks. Look for the indexes to build out a
potential continuation pattern before another big move occurs.
Summary
The Dow ended the day at the lows of the session after breaking through 12,250
in sound fashion. The index will likely build out a continuation pattern below
12,200 before another key move is seen.
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