277 replies to this topic
Posted 04 February 2007 - 11:28 AM
Heres the daily view....wait for a bounce in weakness for an entry. Its important to wait for a bounce in a pullback "over sold" condition before entry as if you enter too soon you could get caught waiting for the bounce that never comes and the weekly trend could turn against you. I speak of over sold in the context of a momentum play, as in short term over sold.
Once again, sound money management (as pointed out above) is the rule!
Heres a close up of the chart above....had to zoom in to make sure the moving average crossover didn't take place...it almost did. We will keep an eye out for that as well.
Posted 04 February 2007 - 11:41 AM
Posted 04 February 2007 - 11:46 AM
Posted 10 February 2007 - 11:24 AM
Update: NDX (Q's) still in the cautious bull stage. The 26 week ema is still pointing upward to retain the bullish stance. Notice the Force Index is getting ever closer to a cross of the "0" line. Also the short term MACD is still in the caution zone ( above the "0" line but with a crossover of the indicator lines )
All in all the Q's are looking a little tired.....although last Fridays action was probably more options related than anything. For the most number of calls and puts to expire worthless on Feb 16, the Q's would need to close at 44.
Posted 18 February 2007 - 12:59 PM
Overall, not a bad week for the NDX (Q's) Up 2%, if using a leveraged issue such as the QLD or the Rydex Dynamic it is double that amount.
Lets look at the weekly....
The 26 week ema (blue line) still says trade from the long side only.
Notice that the short term ema (green line) hit its peak again. Also note that the MACD histogram and signal line is lower than the last time at these levels indicating that the bulls are buying with less enthusiasm ...a sign of caution.
Force Index ticked up and is still above the zero line.
The MACD signal line has yet to crossover from below (just touching) so we will only buy on bounces of daily over sold conditions. If it crosses we can buy more aggressively on lighter pullbacks.
Posted 18 February 2007 - 01:11 PM
Until it does cross, it is important to buy on upticks from pullbacks to avoid whipsaw trades.
This should be an interesting shortened week as many indicies have broke out lately (transports, Mid caps...)
Posted 25 February 2007 - 10:37 PM
Posted 25 February 2007 - 10:41 PM
Sox looking up. Will the breakout stick? As they say...semi's gotta lead so we shall see.
Posted 04 March 2007 - 12:54 AM
Well, that was a fun week to say the least!
After many weeks of struggling, the bear finally came out of his cave. In hindsight the writing was on the wall but many traders, including myself, were in awe of the magnitude of the sell off.
The shear volume that accompanied the sell off suggests that the decline may have some more punch to it, IMO.
Anyway, lets look at the weekly...
Most indicators I follow on the weekly charts are now pointing down. The 26 week EMA says to start trading from the short side only. Although the EMA's have yet to have a crossover, the Force Index has gone negative. Until the 26 week turns back up, I will stay with the sell bias.
Posted 04 March 2007 - 01:10 AM
Heres where it can get interesting....The long term trend lines have yet to be broken (weekly, monthly), so we won't call this a full bear market until they do.
After last week, many of the daily charts are now over sold so shorting right here can be dangerous as traders with short positions look to take quick profits and put a bounce in play. We may see a few more days of selling, but at some point shorts will cover and bargain hunters will step in and put on a 2-3 day rally within this decline. What to look for is the reverse of the long play....sell short the rallies on the daily charts, while keeping an eye on the weekly to make sure its still on the negative side.
Heres a 1 year daily chart....I had to go back 1 year just to show a decline.
Notice the moving averages crossover. Now notice the green spike rallies in the 3-day CMO during last years' decline. A decent entry is a downtick from a spike above the 50 line.
Posted 04 March 2007 - 01:16 AM
Posted 04 March 2007 - 01:21 AM
Sox update....not officially busted, but looks like just a matter of time...they may keep them guessing early in the week.
Posted 11 March 2007 - 10:13 AM
Pretty much as expected as smart bears took quick profits and the bargain hunters snapped up "would be" bargains.
The weekly view still looks pretty bleak right here. The 26 week ema flattened out with a slight downside bias. Although the Force Index bounced, its still well below the zero line. I added a longer time frame MACD that shows the decline intact...the shorter time MACD shows the slight uptick of last week, but still on the negative side.
Playing from the short side only.
Posted 11 March 2007 - 10:24 AM
Heres the daily with the 3-day CMO. Got the bounce as expected to take us above the 50 line on the CMO. Although this move may produce a few more days of sideways up "grinding" to test the intense volume of 2/27, a decent entry on the downtick from the 50 is in play.
Posted 11 March 2007 - 10:34 AM
Sox update...The Naz isn't going anywhere without its Sox. This is one to keep an eye on. If the Sox decides to fall from here then we are in the drivers seat. If it breaks out, then all bets are off as the Naz is sure to follow.
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