Pullback
Given the action in US stocks this week, I thought this might be a good time to share a few thoughts about the market. I hope to be able to show you a way to think about the market that will cut through all of the fear, hype, exaggeration, and
Pullback
Effective trading patterns are usually simple. The more complicated an idea is, the more likely it is the result of trying to fit very random data (i.e., the market) into a preconceived mold. I think many of the patterns and ratios of traditional technical analysis are the result of
Pullback
I initiated a short in crude oil back in July, and an astute reader sent me a good question. For many weeks/months I had been operating with the assumption that crude oil was probably putting in a long-term bottom based on the action back in March/April of 2015;
Pullback
The EUR/USD provides a good example of how we can use higher timeframe context to motivate an entry based on a lower timeframe breakout. First, the big(ger) picture, from the weekly chart: Reading market structure is important, and it's not that hard to do, with only
Failure Test
Multiple timeframe analysis is almost a buzzword in technical analysis. I have been involved in markets actively for two decades, and have been an active participant in dialogue about markets for most of that time. It is interesting to see different techniques take the spotlight as groups of traders hold
Pullback
For anyone actively trading, looking at the markets you follow is a critical part of the investment process. Whether you do this once a week, once a day, or many times a day depends on how you trade and who you are, but it is essential that you are somehow
Pullback
Let me preface this by saying two things: First, I'm bullish on global stocks over even moderately long timeframes. Technicians like to call tops, but I think this bull market could have several more years in it. However, I'm also always looking for evidence that contradicts
Pullback
There are patterns in market prices that can point to trading opportunities and potential profits. This is one of the fundamental assumptions of technical/tactical trading (and can be verified by quantitative and statistical analysis.) Most people are familiar with the idea of finding patterns to set up trades, but
General Comments
To trade or invest successfully, we have to think one step ahead of the market, but we have to discipline ourselves not to act early. We also must strike a balance between having a big picture perspective and being flexible as new information arrives--it helps to have a roadmap, but
Anti
Just a quick followup to this post, in which I suggested the US Dollar might be set for a fakeout rally (that has happened) that might fail into a sharp selloff (this could be setting up.) Let's look at what has developed since I published that post a
Pullback
Markets move in alternating waves of with-trend strength (or weakness) interspersed with moves against the trend. We call these moves pullbacks or consolidations, and they create some of the most powerful and most useful trading patterns we have. (I've written about them here and here.) Many of the
Pullback
[This post was originally published on SeeItMarket.com, here. I have added some comments at the end of the post to update following yesterday's action. Despite the fact the market rallied instead of selling off, there are several points to consider in this post.] For context: I’ve