I'll keep watching this index next week as it's health will continue to dictate the health of the broader markets for the near term.
S&P 500 Bank Index, Daily Chart:
Friday, February 27, 2009
Bank Index in Focus
Well, the S&P Bank Index was able to tie that "4 day consecutive day move up" record that I posted on Wednesday, but it had moved into double-whammy resistance of a downtrending 20MA on the daily chart and some horizontal resistance at 75. The price was rejected today and finished with red bar.
I'll keep watching this index next week as it's health will continue to dictate the health of the broader markets for the near term.
S&P 500 Bank Index, Daily Chart:
I'll keep watching this index next week as it's health will continue to dictate the health of the broader markets for the near term.
S&P 500 Bank Index, Daily Chart:
Wednesday, February 25, 2009
Bank Index Downward Momentum in Check...so Far
Last week I put up chart of the S&P Bank Index showing that it was close to hitting a fib target to the downside. It hit the 161% target and it's seen a bounce this week.
Fib targets are great places for reversals especially after a long extended move as in the case of the bank index. This would make sense for a relief bounce here if not a full blown reversal area.
There is one more longer term fib on the index chart below, the 423% from the tip top of the move down to the 46 area (it closed at 70 today). That area may still be a target so be aware of that one. The market may still show us a capitulation day that would shake out all the sellers and give the market a real reason to believe we've put in some sort of intermediate bottom. If that happens the bulls will try to take over for while.
The bank index has put in three consecutive up days.
Trivia: The bank index has only put in ONE rally with more then three consecutive up days since last May (almost 10 months). So, tomorrow we either tie the record with four or the index closes lower tomorrow.
S&P Bank Index: Daily Chart
Fib targets are great places for reversals especially after a long extended move as in the case of the bank index. This would make sense for a relief bounce here if not a full blown reversal area.
There is one more longer term fib on the index chart below, the 423% from the tip top of the move down to the 46 area (it closed at 70 today). That area may still be a target so be aware of that one. The market may still show us a capitulation day that would shake out all the sellers and give the market a real reason to believe we've put in some sort of intermediate bottom. If that happens the bulls will try to take over for while.
The bank index has put in three consecutive up days.
Trivia: The bank index has only put in ONE rally with more then three consecutive up days since last May (almost 10 months). So, tomorrow we either tie the record with four or the index closes lower tomorrow.
S&P Bank Index: Daily Chart
Thursday, February 19, 2009
Bank Index Hope: Bring in the Fibs
There appears to be some possible fib support in the 50 area, lets see if the blood is the streets is enough to find some buyers looking for some bank bargains.
S&P Bank Index: Weekly Chart with Fibs
Note: Red horizontal line below is ZERO.
S&P Bank Index: Weekly Chart with Fibs
Note: Red horizontal line below is ZERO.
Wednesday, February 18, 2009
RUT: Broken Wedge
The RUT continued to move lower after the wedge pattern break yesterday, next daily support level looks like 416. We'll have to see how it reacts to that area tomorrow as there is not much price support on the daily until 370 and 360.
RUT Daily Chart:
RUT Daily Chart:
Tuesday, February 17, 2009
Banking Index: Getting Closer to Zero
The thought of the banking index at 100 or even 200 a few years ago would have received laughs from anyone that would have suggested that. Today the S&B Banking Index ($BIX) closed at 65.59, an all time low.
If it can go to 100, and if it can go to 65, then unfortunately it can go to zero. That would mean the nationalization of our banks.
I'm not trying to paint a grim picture here, the charts do a better job at that.
S&P Banking Index: 10 Year Monthly Chart:
Note the numerous huge monthly bottoming candles that were completely taken out.
S&P Banking Index: Daily Chart:
If it can go to 100, and if it can go to 65, then unfortunately it can go to zero. That would mean the nationalization of our banks.
I'm not trying to paint a grim picture here, the charts do a better job at that.
S&P Banking Index: 10 Year Monthly Chart:
Note the numerous huge monthly bottoming candles that were completely taken out.
S&P Banking Index: Daily Chart:
Monday, February 16, 2009
Deflation: Just Another Economic Term to Ignore?
Question everything you read and everything you hear. Then spend some time in silence and let your inner voice tell you what you know is "your" truth.
I just finished reading a 1980 primer on Deflation authored by the editors at Hard Money Digest. What I found so interesting about this discourse was that much of the discussion focused on interest rates which at the time were close to twenty percent. I don't think the authors back then could have imagined that thirty years later we'd be taking about another round of deflation but with zero interest rates. I don't think that would have worked in their equation.
It just goes to show that economics, just like the stock market, is best understood when you stick to the basics. After reading the book this morning, I spend another 45 minutes educating myself on deflation on the web by reading blog posts and comments. It just took those short 45 minutes to convince me that, although well intentioned (like me), everyone is full of crap (in a nice way) because they're all guessing. It's seems that in past that even the highest paid, most respected economist in the world get it wrong most of the time. The same could be said about the Wall Street geniuses that were blind to the long term moving average "trend breaks" that screamed the warning signals of a trend change. What ever happened to hedging? Why did the biggest guys on Wall Street get it wrong? (The smartest guys on Wall Street did get it right, but they were the pint-sized minority who went short)
The news, more then ever, is again full of speculation on a new set of negative economic and market predictions that in the context of good trading are completely irrelevant and are actually harmful for me to entertain.
ECON 101 converted to trend
Technically the major indices are in an intermediate downtrend and demand is shrinking across the board for goods and services because unemployment is rising, credit is tightening and people are holding on to the current cash they have. If corporate profits fall and future short term projections are negative then stock prices will continue to fall. Those are the basics. I will continue to follow any data that would counter those facts, but the sum of the above points to continued GDP contraction. In other words, the GDP is trending down. That's all I personally need to belief about the current economic conditions, why should I complicate it? When the GDP starts trending up I will re-evaluate.
As I trader, my primary objective is to follow a system that will give me consistent profits.
Trend, support and resistance. That's my basic system and it works because it keeps me trading in the direction of what's happening and not what "I think will happen." Moving averages are the best way I've found to keep me on the right track. If the moving averages are sideways, I sit on the sidelines until a new trend develops.
We're in a consolidation mode right now and a wedge type pattern has shown up on the RUT. Wedge patterns are typically a continuation pattern and as history will show, they typically DO continue the current trend. However, I will wait for the market to show it's hand, but I will not be the contrarian here and try to fight the trend. I will be patient and let my rules dictate where I get in, where I put my stop and where I put my first target.
The title I read this morning"Deflation: The Greater of Two Evils," was written at time of prolonged "inflation" and the authors suggested that the warning signals were starting to appear for a period of deflation in the 80's. The book was on the right track and the early 80's did see disinflation (a decrease of inflation). I applaud the authors for sending the warning signals to their readers. There are many time in the book where they make it a point to disclose that they are not saying that "deflation" will happen, but they are being prudent and proactive in outlining what could happen and what one can do to in the event that it does happen.
Buy Now
$79.00
Not to get on a rant here, but where were the professional money managers when the longer term uptrends broke? Did they hedge? Did they advise their clients that there might be a possibility of a prolonged downtrend? Did they contact their clients and suggest any hedge strategies? Just another example of so-called experts getting it all wrong. They were apparently indoctrinated with the fallacy that the stock market always goes UP over the long haul. Have you looked at a 20 year monthly chart lately?
SPX 20 Year Monthly Chart:
Although the market was closed today, index futures did trade and closed lower with the TF closing below an important 440 support level. If it holds there could be a nice bounce next week, but if it breaks the evidence of a new move down starts to mount.
If you're not well versed on deflation, you may want to spend some time getting an overview from several different sources and then make your own decision on what you want to follow or not follow from an economic standpoint.
As it has been often said, "Price discounts everything," meaning that "price" takes everything into account so you can forget about all the data, all the rumors and all the speculation, the talking-heads, the bull contingent, the bear contingent and the astrologer's reference.
Will believing the market will go down make you money? Will believing the market will rally from here really make you money? Are you trading a system that can take advantage of either direction? Do you have a neutral strategy? Only you can trade your system and only you can answer those questions. My hope is that you are able to clear your head from all the noise and speculation out there right now and trade your system which in turn will produce consistent profits for your account.
Price is true.
I just finished reading a 1980 primer on Deflation authored by the editors at Hard Money Digest. What I found so interesting about this discourse was that much of the discussion focused on interest rates which at the time were close to twenty percent. I don't think the authors back then could have imagined that thirty years later we'd be taking about another round of deflation but with zero interest rates. I don't think that would have worked in their equation.
It just goes to show that economics, just like the stock market, is best understood when you stick to the basics. After reading the book this morning, I spend another 45 minutes educating myself on deflation on the web by reading blog posts and comments. It just took those short 45 minutes to convince me that, although well intentioned (like me), everyone is full of crap (in a nice way) because they're all guessing. It's seems that in past that even the highest paid, most respected economist in the world get it wrong most of the time. The same could be said about the Wall Street geniuses that were blind to the long term moving average "trend breaks" that screamed the warning signals of a trend change. What ever happened to hedging? Why did the biggest guys on Wall Street get it wrong? (The smartest guys on Wall Street did get it right, but they were the pint-sized minority who went short)
The news, more then ever, is again full of speculation on a new set of negative economic and market predictions that in the context of good trading are completely irrelevant and are actually harmful for me to entertain.
ECON 101 converted to trend
Technically the major indices are in an intermediate downtrend and demand is shrinking across the board for goods and services because unemployment is rising, credit is tightening and people are holding on to the current cash they have. If corporate profits fall and future short term projections are negative then stock prices will continue to fall. Those are the basics. I will continue to follow any data that would counter those facts, but the sum of the above points to continued GDP contraction. In other words, the GDP is trending down. That's all I personally need to belief about the current economic conditions, why should I complicate it? When the GDP starts trending up I will re-evaluate.
As I trader, my primary objective is to follow a system that will give me consistent profits.
Trend, support and resistance. That's my basic system and it works because it keeps me trading in the direction of what's happening and not what "I think will happen." Moving averages are the best way I've found to keep me on the right track. If the moving averages are sideways, I sit on the sidelines until a new trend develops.
We're in a consolidation mode right now and a wedge type pattern has shown up on the RUT. Wedge patterns are typically a continuation pattern and as history will show, they typically DO continue the current trend. However, I will wait for the market to show it's hand, but I will not be the contrarian here and try to fight the trend. I will be patient and let my rules dictate where I get in, where I put my stop and where I put my first target.
The title I read this morning"Deflation: The Greater of Two Evils," was written at time of prolonged "inflation" and the authors suggested that the warning signals were starting to appear for a period of deflation in the 80's. The book was on the right track and the early 80's did see disinflation (a decrease of inflation). I applaud the authors for sending the warning signals to their readers. There are many time in the book where they make it a point to disclose that they are not saying that "deflation" will happen, but they are being prudent and proactive in outlining what could happen and what one can do to in the event that it does happen.
Buy Now
$79.00
Not to get on a rant here, but where were the professional money managers when the longer term uptrends broke? Did they hedge? Did they advise their clients that there might be a possibility of a prolonged downtrend? Did they contact their clients and suggest any hedge strategies? Just another example of so-called experts getting it all wrong. They were apparently indoctrinated with the fallacy that the stock market always goes UP over the long haul. Have you looked at a 20 year monthly chart lately?
SPX 20 Year Monthly Chart:
Although the market was closed today, index futures did trade and closed lower with the TF closing below an important 440 support level. If it holds there could be a nice bounce next week, but if it breaks the evidence of a new move down starts to mount.
If you're not well versed on deflation, you may want to spend some time getting an overview from several different sources and then make your own decision on what you want to follow or not follow from an economic standpoint.
As it has been often said, "Price discounts everything," meaning that "price" takes everything into account so you can forget about all the data, all the rumors and all the speculation, the talking-heads, the bull contingent, the bear contingent and the astrologer's reference.
Will believing the market will go down make you money? Will believing the market will rally from here really make you money? Are you trading a system that can take advantage of either direction? Do you have a neutral strategy? Only you can trade your system and only you can answer those questions. My hope is that you are able to clear your head from all the noise and speculation out there right now and trade your system which in turn will produce consistent profits for your account.
Price is true.
Sunday, February 15, 2009
Cycles Create Patterns or What Caused the Great Depression
As a trader or investors it's extremely important to understand cycles and the importance they play in creating tradable patterns. Whether you belief in cycle theory or not, they do exist in nature and the markets.
Cycles create patterns that, as prudent technical traders, we should be very aware of.
Part of understanding cycles is that NOTHING goes in a straight line forever, and while we as traders will recognize our greatest profits by staying in a trend for as long as it last, we must also understand that the seemingly never ending trend will at some point REVERSE and go the other way for a little while or a long while.
Later this week I'll post more on this topic including some simple specific signals to assist you in defining direction.
For further reading, check you public or university library for books on cycles and cycle theory. Like all subjects surrounding the markets, we do not have to believe everything that's been written about the subjects, but as students of the markets it's important for us to at least understand the basic theories.
Edward R. Dewey is one of the best known authors on the subject of cycles.
The following book is a rare first printing of the 1949 edition and is for sale from our collection:
Cycles: The Science of Prediction (with a 1950 Postscript on Deflation)
Dewey first became interested in cycles while Chief Economic Analyst of the Department of Commerce in 1930 or 1931 because President Hoover wanted to know the cause of the Great Depression. Dewey reports that economists gave him no consistent answers on the cause of the depression and he lost faith in economic methods. He received and took advice to study how business behaviour occurred rather than why. This book attempts to establish the ground for a completely new approach to the economic problems of our era. From a technical standpoint, one only needs to look at a 50 year SPX monthly chart to see how these cycles work themselves out. From a practiclal standpoint, cycle theory and technical analysis go hand in hand to create powerful patterns like the double top that we witnessed on the SPX monthly chart last year (2008). For those who ignore cycles, the ignorance is likely to be at the peril of their trading and investment accounts. This book is a great overview of Dewey's theories and even for those of you who chose to ignore his premise, this is a great primer on his findings. The additional 1950 postscript "Further Deflation and it's Promise" is a wonderful essay extremely relevant to our current economic crisis . 307 pages (52 in postscript plus 255 of main title).
Buy Now
$89.95
Cycles create patterns that, as prudent technical traders, we should be very aware of.
Part of understanding cycles is that NOTHING goes in a straight line forever, and while we as traders will recognize our greatest profits by staying in a trend for as long as it last, we must also understand that the seemingly never ending trend will at some point REVERSE and go the other way for a little while or a long while.
Later this week I'll post more on this topic including some simple specific signals to assist you in defining direction.
For further reading, check you public or university library for books on cycles and cycle theory. Like all subjects surrounding the markets, we do not have to believe everything that's been written about the subjects, but as students of the markets it's important for us to at least understand the basic theories.
Edward R. Dewey is one of the best known authors on the subject of cycles.
The following book is a rare first printing of the 1949 edition and is for sale from our collection:
Cycles: The Science of Prediction (with a 1950 Postscript on Deflation)
Dewey first became interested in cycles while Chief Economic Analyst of the Department of Commerce in 1930 or 1931 because President Hoover wanted to know the cause of the Great Depression. Dewey reports that economists gave him no consistent answers on the cause of the depression and he lost faith in economic methods. He received and took advice to study how business behaviour occurred rather than why. This book attempts to establish the ground for a completely new approach to the economic problems of our era. From a technical standpoint, one only needs to look at a 50 year SPX monthly chart to see how these cycles work themselves out. From a practiclal standpoint, cycle theory and technical analysis go hand in hand to create powerful patterns like the double top that we witnessed on the SPX monthly chart last year (2008). For those who ignore cycles, the ignorance is likely to be at the peril of their trading and investment accounts. This book is a great overview of Dewey's theories and even for those of you who chose to ignore his premise, this is a great primer on his findings. The additional 1950 postscript "Further Deflation and it's Promise" is a wonderful essay extremely relevant to our current economic crisis . 307 pages (52 in postscript plus 255 of main title).
Buy Now
$89.95
Friday, February 13, 2009
RUT Weekly
The RUT has now spent 4 weeks consolidating in a range between 470 and 440 as you can see on the weekly chart.
On the daily chart, the wedge has been broken to the downside hinting of some more possible downward movement soon.
Notice the distinct downward angle of the weekly 20MA. For weeks the price has been overextended and has been making it's way back to retest the 20MA.
With the blue 8MA you can see how it trended down and has been consolidating sideways.
Three things can happen from here, each with a 33% chance of happening, more consolidation, a reversal to the upside or a continuation of the trend to the downside.
The break of the daily wedge to the downside gives a slight bias to a continuation of the trend downward, the trend of the 20MA and 50MA supports continued downward motion.
I personally like to trade with the prevailing trend, so I will wait to see which direction confirms out of this consolidation.
RUT Weekly Chart:
On the daily chart, the wedge has been broken to the downside hinting of some more possible downward movement soon.
Notice the distinct downward angle of the weekly 20MA. For weeks the price has been overextended and has been making it's way back to retest the 20MA.
With the blue 8MA you can see how it trended down and has been consolidating sideways.
Three things can happen from here, each with a 33% chance of happening, more consolidation, a reversal to the upside or a continuation of the trend to the downside.
The break of the daily wedge to the downside gives a slight bias to a continuation of the trend downward, the trend of the 20MA and 50MA supports continued downward motion.
I personally like to trade with the prevailing trend, so I will wait to see which direction confirms out of this consolidation.
RUT Weekly Chart:
Thursday, February 5, 2009
My Intraday Trading System and Rules
Disclaimer: The information below is for educational purposes only. The information is intended to show an example of how one can approach intraday trading but is not a recommendation nor suggestion of how to trade.
My intraday System is based on following the trend of the 5m 20MA.
The goal is to enter as soon as the direction is confirmed and to follow it as long as the trend remains intact.
Some rules and guidelines.
- Only trade in the direction of the 5m 20MA (no counter trend trades)
- Never trade a sideways 5m 20MA, be patient and let the market show it's hand first
- Once price has cleared consolidation, enter on first pull back
- Always wait for confirmation, do not anticipate
- Trade the 5m chart, but it's okay to based entries and exits on the 2m chart
- Believe that the 20MA will hold a pullback
- Believe that any large move will have a pull back and then move that same amount or more for it's second leg.
- If I get stopped out of a valid entry, immediately start looking for the second entry.
Since markets trend consolidate and then trend again, my objective is to enter at the beginning of the trend and milk the trend for as much profit as possible.
This works best in on a trending day, but below is a document of market direction for the last 2 days as measured by the direction of the 5m 20MA.
Wednesday:
6:30 Sideways
7:00 Up
7:30 Up
8:00 Up
8:30 Up
9:00 Sideways
9:30 Down
10:00 Down
10:30 Down
11:00 Down
11:30 Down
12:00 Down
12:30 Sideways
1:00 Sideways
Thursday:
6:30 Down
7:00 Down
7:30 Up
8:00 Up
8:30 Up
9:00 Up
9:30 Up
10:00 Up
10:30 Sideways
11:00 Sideways
11:30 Up
12:00 Sideways
12:30 Down
1:00 Down
From the two days above and by looking at their charts, you can see that both days have good opportunities for catching some extended moves. The Key is to first understand the direction of the 5m 20MA and second to watch how the price is acting next to it.
Notice on today's chart (Thursday) how at 7:30 the price was now above the 20MA and that it remained above the UPTRENDING 20MA 10:15, over 2 hours heading up.
My goal is to continue getting better at trading my 20MA trend rather then trading the candle movement within the trend. Watching the movement within the trend is more noise than creditable, actionable information.
I'm not advocating entering or exiting on each direction change of the 20MA, but my profits will be greater the more I can trust the 2OMA especially on large trending days in one direction.
TF Thursday: 5 Minute Chart
TF Wednesday: 5 Minute Chart
My intraday System is based on following the trend of the 5m 20MA.
The goal is to enter as soon as the direction is confirmed and to follow it as long as the trend remains intact.
Some rules and guidelines.
- Only trade in the direction of the 5m 20MA (no counter trend trades)
- Never trade a sideways 5m 20MA, be patient and let the market show it's hand first
- Once price has cleared consolidation, enter on first pull back
- Always wait for confirmation, do not anticipate
- Trade the 5m chart, but it's okay to based entries and exits on the 2m chart
- Believe that the 20MA will hold a pullback
- Believe that any large move will have a pull back and then move that same amount or more for it's second leg.
- If I get stopped out of a valid entry, immediately start looking for the second entry.
Since markets trend consolidate and then trend again, my objective is to enter at the beginning of the trend and milk the trend for as much profit as possible.
This works best in on a trending day, but below is a document of market direction for the last 2 days as measured by the direction of the 5m 20MA.
Wednesday:
6:30 Sideways
7:00 Up
7:30 Up
8:00 Up
8:30 Up
9:00 Sideways
9:30 Down
10:00 Down
10:30 Down
11:00 Down
11:30 Down
12:00 Down
12:30 Sideways
1:00 Sideways
Thursday:
6:30 Down
7:00 Down
7:30 Up
8:00 Up
8:30 Up
9:00 Up
9:30 Up
10:00 Up
10:30 Sideways
11:00 Sideways
11:30 Up
12:00 Sideways
12:30 Down
1:00 Down
From the two days above and by looking at their charts, you can see that both days have good opportunities for catching some extended moves. The Key is to first understand the direction of the 5m 20MA and second to watch how the price is acting next to it.
Notice on today's chart (Thursday) how at 7:30 the price was now above the 20MA and that it remained above the UPTRENDING 20MA 10:15, over 2 hours heading up.
My goal is to continue getting better at trading my 20MA trend rather then trading the candle movement within the trend. Watching the movement within the trend is more noise than creditable, actionable information.
I'm not advocating entering or exiting on each direction change of the 20MA, but my profits will be greater the more I can trust the 2OMA especially on large trending days in one direction.
TF Thursday: 5 Minute Chart
TF Wednesday: 5 Minute Chart
RUT: Looking at Some Trendlines
The RUT held it's own today and after gapping down rallied to close up 6.6 points at 455.
Pulling out to the Daily Chart there are several things that stand out to me. I'm going to list my observations below.
- The 200MA is pointing down, confirming an intermediate downtrend
- The 50MA is sideways, indicating consolidation
- With the consolidation the next move will either be continuation or reversal
- Markets generally resume in the direction of the intermediate trend (RUT did it for 5 years going up, now time for the bears?)
- Price is in the bottom 25% of the overall move down
- Price resisted when it hit the 38.2% retracement area
- Just confirmed lower low and lower high, confirming current short term bearish bias
- 20MA pointing down
- Wedge type formation forming on daily chart, wedges are typically a continuation pattern
Those are some observations of the chart taken at face value, since the trend is down, we have a lower high and lower low and a continuation pattern is forming I'd have to say the charts are looking a bit bearish. Having traded a lot of wedge patterns, the can be tricky and looking at this one there seems to be room for another move up to retest that upper trendline before it decides to fall. I am by no means saying that's what it's going to do, but now that I have my lines on here I start looking for the potential possibilities so I am better prepared with where resistance and support areas are likely. Just be aware that if it does get a bounce here there is some overhead resistance at that trendline.
RUT Daily Chart:
Pulling out to the Daily Chart there are several things that stand out to me. I'm going to list my observations below.
- The 200MA is pointing down, confirming an intermediate downtrend
- The 50MA is sideways, indicating consolidation
- With the consolidation the next move will either be continuation or reversal
- Markets generally resume in the direction of the intermediate trend (RUT did it for 5 years going up, now time for the bears?)
- Price is in the bottom 25% of the overall move down
- Price resisted when it hit the 38.2% retracement area
- Just confirmed lower low and lower high, confirming current short term bearish bias
- 20MA pointing down
- Wedge type formation forming on daily chart, wedges are typically a continuation pattern
Those are some observations of the chart taken at face value, since the trend is down, we have a lower high and lower low and a continuation pattern is forming I'd have to say the charts are looking a bit bearish. Having traded a lot of wedge patterns, the can be tricky and looking at this one there seems to be room for another move up to retest that upper trendline before it decides to fall. I am by no means saying that's what it's going to do, but now that I have my lines on here I start looking for the potential possibilities so I am better prepared with where resistance and support areas are likely. Just be aware that if it does get a bounce here there is some overhead resistance at that trendline.
RUT Daily Chart:
Wednesday, February 4, 2009
Rare and Out of Print Financial Books
Since launching our bookstore on abebooks.com in January, we now have over 100 titles uploaded and available for sale. Abebooks.com is a website that specializes in rare and out of print books by linking thousands of specialty books stores like ours from around the globe. We're currently adding about 10 more titles per day which means we should have our complete collection of about 5000 titles listed by December 2011. We specialize in rare and out of print books related to trading, Wall Street, Financial History, Economics and Commodities. Additionally we have many rare trading systems and courses by W.D. Gann and other legendary trading minds.
We own one of the largest private collections in the world.
You can browse our collection at www.abebooks.com. Our store name on Abebooks is Alanpuri Trading. Additionally you can find more information on our collection including author bios and more details on some of the rarer titles at www.raretradingbooks.blogspot.com
We own one of the largest private collections in the world.
You can browse our collection at www.abebooks.com. Our store name on Abebooks is Alanpuri Trading. Additionally you can find more information on our collection including author bios and more details on some of the rarer titles at www.raretradingbooks.blogspot.com
RUT: Say Hello to the Downtrending 20MA
The RUT followed the morning session bullishness to hit our 2nd upside target of 460, but was quickly reminded that the area had double whammy resistance with a the 61.8% fib level AND the downtrending 20MA on the daily chart.
It closed lower to form a topping tail candle on the daily, pretty bearish but since the RUT is now in chop mode anything could happen here. I continue to watch the hourly charts as those give a little better clarity in this volatility. The RUT 200MA on the hourly is dead sideways and it broke the hourly uptrend so tomorrow I'll have my bear cap on for starters.
RUT Daily Chart:
It closed lower to form a topping tail candle on the daily, pretty bearish but since the RUT is now in chop mode anything could happen here. I continue to watch the hourly charts as those give a little better clarity in this volatility. The RUT 200MA on the hourly is dead sideways and it broke the hourly uptrend so tomorrow I'll have my bear cap on for starters.
RUT Daily Chart:
Tuesday, February 3, 2009
RUT: Small Body Bar on Daily
The RUT closed higher today after reaching and testing the 455 (50% fib) area that was my closest upside target yesterday.
Two days up in a row in this market is an accomplishment, we'll have to see how it goes tomorrow. The same downside targets hold true that I posted yesterday and the same upside as well.
RUT Daily Chart:
Two days up in a row in this market is an accomplishment, we'll have to see how it goes tomorrow. The same downside targets hold true that I posted yesterday and the same upside as well.
RUT Daily Chart:
Monday, February 2, 2009
RUT: Taking a Look at the Hourly
The general bias is down on the RUT (lower high, lower low), but it did hold the important 440 level we talked about last week.
Tomorrow will be important to see if it can follow through or if it's ready to fall apart some more.
I posted a 60m chart of the RUT because it gives a bit of a different picture then looking just at the dailies. First thing to note is the direction of the 20MA which is down, also notice the fibs I put on and where it resisted today...a 38.2 retracement.
While today closed positive I want to keep in mind that it just had a strong 2 day drop and a relief bounce was probable and some point and would likely retrace to 38.2% or 50%. We got the 38.2% and now I need to watch the price action tomorrow it see if the move continues to retrace up to 50% or 61.8% levels or if it's just going to roll over.
I have no bias what it will do tomorrow, but know the levels it is likely to target. The 440 area will be key again to hold for the bulls to have a chance to push it back up again.
On the upside I have the following targets / resistance:
- 455.78: 50% fib
- 460.18: 61.8% fib
- 474.42: 100% fib retrace
On the downside I have the following targets / support:
- 431.51: 100% retrace of last mini-rally
- 405.05: 161% retrace of last mini-rally
- 362.22: 261.8% retrace of last mini-rally
That covers a range of almost 100 points so we should be able to stay in that range on Tuesday.
RUT Hourly Chart (Bull upside fibs)
RUT Hourly Chart (Bear downside fibs)
Tomorrow will be important to see if it can follow through or if it's ready to fall apart some more.
I posted a 60m chart of the RUT because it gives a bit of a different picture then looking just at the dailies. First thing to note is the direction of the 20MA which is down, also notice the fibs I put on and where it resisted today...a 38.2 retracement.
While today closed positive I want to keep in mind that it just had a strong 2 day drop and a relief bounce was probable and some point and would likely retrace to 38.2% or 50%. We got the 38.2% and now I need to watch the price action tomorrow it see if the move continues to retrace up to 50% or 61.8% levels or if it's just going to roll over.
I have no bias what it will do tomorrow, but know the levels it is likely to target. The 440 area will be key again to hold for the bulls to have a chance to push it back up again.
On the upside I have the following targets / resistance:
- 455.78: 50% fib
- 460.18: 61.8% fib
- 474.42: 100% fib retrace
On the downside I have the following targets / support:
- 431.51: 100% retrace of last mini-rally
- 405.05: 161% retrace of last mini-rally
- 362.22: 261.8% retrace of last mini-rally
That covers a range of almost 100 points so we should be able to stay in that range on Tuesday.
RUT Hourly Chart (Bull upside fibs)
RUT Hourly Chart (Bear downside fibs)
Subscribe to:
Posts (Atom)
Posts
