Failure Test
Grains have had dramatic uptrends for most of the summer. At A on this chart, we were looking at a possible long entry—had prices quickly recovered back above the bottom of the range, this would have been a classic Wyckoff spring, and a strong signal to buy for at
General Comments
[dc]N[/dc]ot exactly a chart of the day today, but here is something that will be useful to both stock traders and longer-term investors: a list of liquid stocks, ranked by current relative strength. Now, a few points to consider. First of all, a relative strength ranking is
General Comments
Corn is engaging the broad support zone at the bottom of the range. Watch for reversals and enter long positions on strong upward closes, which would put in classic Wyckoff springs. Close stops and active position management are essential—if the trade works it should move immediately and smartly higher,
Failure Test
This chart shows a clean failure test in AAPL. The pattern is a brief probe above resistance, followed by an immediate failure and sharp reversal. Many traders would be reluctant to short after a move like this, as it is always possible to point to any number of "levels&
Breakout
Today's chart of the day will be a little different. Take a look at this table which shows 2 week, 1, 3, 6, and 12 month returns for every trading day in the S&P 500 from 2/3/1960 – present (13,241 trading days.) Notice first
Breakout
One of the tools I use to evaluate market action is the standard deviation spike, which expresses each day's return a standard deviation of the previous 20 trading days. (This tool is also discussed in The Art & Science of Technical Analysis .) This gives an important perspective on
General Comments
The small consolidation (B) above the top of the parallel trend channel should provide another spot to add to or to initiate long positions on further strength. One way to trade this pattern would be to simply enter a long on a strong close above this resistance, though an intraday
General Comments
Though I have written before about a potential longer-term timeframe short setup in precious metals, Gold and Silver both show overtly bullish patterns. Longs are justified on upside breakouts in either metal. // < ![CDATA[ <span style="overflow:hidden;line-height:0px" data-mce-style="overflow:hidden;line-height:0px"
General Comments
[dc]I[/dc] want to share a few thoughts today on technical trading in general. The points in bold come from the end of the first part of my recent book, The Art & Science of Technical Analysis . I expanded each of those with a little more commentary. These points
Breakout
Long-time market leader consistently outperforming broad market, sector and peers. Check. Positive earnings surprise. Check. Several days of tight consolidation at highs. Check. This is an excellent technical setup to enter a long position on a breakout of the small consolidation. Of course, no technical setup works all the time,
General Comments
This is a chart of NYSE Total Volume with 1 week (red) and 1 month (blue) moving averages applied. There is a seasonal pattern to volume, volatility and trading activity, which all tend to decline into summertime, but recent levels are historically low. Note that the previous times the 1
General Comments
I want to share a quick thought with you today--a little trick in thinking that made a big difference in my trading a few years ago. One of the problems with traders is that we can be stubborn. This happens to everyone, and no one is ever immune to it.