Friday, September 01, 2006
Technical Indicators
Standard Deviation
Channel
The Standard Deviation Channel is two lines plotted parallel to
the Linear Regression Trendline. These lines are distanced by n number of
standard deviations above and below the LRT.
Over time, prices generally move from one extreme to another. As market
participants become overly optimistic, prices are driven up at an unsustainable
rate. Likewise, when market participants are overly pessimistic, prices move
down at an unsustainable rate.
Given this, markets tend to have an equilibrium pricing point. While the Linear
Regression Trendline can help determine where such a point lies, it is the
Standard Deviation Channel that is helpful in determining where the extremes
fall...
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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.
Read
More...
Daily Market Commentary
Updated Thursday, 8/31 for Friday's market
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Key DOW Levels for 9/1
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UP
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Above 11,425
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DN
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Below 11,350
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11,400 Holds...
- Dow continues to honor resistance at 11,400, sets up for big
move away from this level. The index continues to honor this key resistance
level, which could make for a much bigger move away from this level once
direction is established.
- The NASDAQ and S&P each traded sideways throughout the session within the
boundaries of clear consolidations. Watch these ranges for movement tomorrow.
Summary
The Dow ended the day with a minor loss today, but continues to be rejected by
the 11,400 resistance level. Watch for a big break or reversal to occur from this
level in the near term. Such a move could spark movement not seen in three
weeks.
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