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A Technique For Trapping Pullbacks

Trendsare a good thing. But chasingtrends can sometimes lead to buying the high tick or selling the low tick GÇnot a good thing. Thus one approach thatmany traders gravitate toward is that of buying dips in an uptrend and sellingrallies in a downtrend. This practice,which has withstood the test

A Technique For Trapping Pullbacks

Trendsare a good thing. But chasingtrends can sometimes lead to buying the high tick or selling the low tick GÇnot a good thing. Thus one approach thatmany traders gravitate toward is that of buying dips in an uptrend and sellingrallies in a downtrend. This practice,which has withstood the test

A Technique For Trapping Pullbacks

Trendsare a good thing. But chasingtrends can sometimes lead to buying the high tick or selling the low tick GÇnot a good thing. Thus one approach thatmany traders gravitate toward is that of buying dips in an uptrend and sellingrallies in a downtrend. This practice,which has withstood the test

Market Setting Up For Action

After a 20% up move from its lows, and four weeks worth of time, the market is well within its historical time window for a retest as seen following other major bottoms (1970, ’74,’ 87, ’98). Overall volume has waned considerably since the July low, and volume on Friday and Monday was considerably below average. When volume and range decrease like this, the market is usually on the verge of a very large move.-á

History Lesson

History tells us that we will experience a retest of the
July 24 lows. Every significant market bottom, from the 1970s through the 1990s, has had one. This means we could see a
nasty retracement anytime soon, one that would take us all
the way back down GÇ” or nearly all the way back down GÇ” to the
July

What A Stud

Each little dip is followed by a rebound, and while the total volume and
breadth numbers are not wowing me to any great extent, I canGÇÖt argue with the
tape

Resistance: Vanishing

Monday the market closed up, continuing the move from last week. More importantly, all three major indexes closed above their 50-day averages. This was one of the three key resistance levels I had been following, in addi

Market Happy, Short Term Overbought

The market is paying respect to one last
significant resistance level in the form of the 50-day
average. For next week, it would not be surprising to
see some consolidation of recent gains before the market
attempts breaching this important resistance level.
Have a great weekend.

Leadership Groups, Momentum — Healthy

WednesdayGÇÖs rally (Dow +261 points) incorporated many positive technical signs. The Nasdaq was led higher by gains in the Semiconductor [SMH|SMH] and Software [SWH|SWH] areas, while the S&P and Dow

Turn Up The Volume (Please)

Monday we traded, what, a billion shares? I guess
summer trading is here. The good news is that the
marketGÇÖs recovery efforts are still intact. Any dip this
week I believe sets the stage for another attack of the July
30/31 highs. Only a high-volume, high-momentum violation
of the August 5 swing low in the broad indexes would change
my opinion. Notice the pattern the past two days
(Friday and Monday) where the market gapped lower on the
open

Hi-Ho Bio!

IGÇÖve been bullish the Biotech sector since early
June. It was disappointing therefore when our long Biotech
trade, established ca. 72.00 on July 17, was stopped out on
July 24. How frustrating it was to watch the Biotech shares
reverse that day, and catapult higher over the following
week.

Credible Base, New Challenges

Balancing my enthusiasm is the realization that a re-test of the July lows in
the weeks ahead would fit the precedent set in other bottoming examples of the
past 50 years. In addition, I remain somewhat cautious on the longer-term
outlook