countertrend

is anyone out there?

2009-12-14T22:21:00.002-05:00

Does anyone check in on this blog? If yes, maybe I'll start up again. Thanks.

current events

2007-05-25T10:10:00.000-04:00

2 Comments - Show Original Post Collapse comments

Pradeep Bonde said...

When is the trend of your post going to go up?

May 24, 2007 3:44 PM

walter said...

Pradeep,

I've been "retooling" so to speak. In my trading (and I may have alluded to this in some of my comments on your blog) I have been struggling with trade execution - that is, the actual buying and selling of positions. Charting and trend line and price and volume analysis appealed to me on many levels (especially an aesthetic level) and they produced pretty pictures, but the resulting lines and understanding gained didn't and hasn't necessarily translated into a plan, at least for me, about getting into a position, having it go my way, and then getting out with profit. That being said, reading your blog and applying some charting analysis that has proved useful has inspired me to dabble with going long, and it has been going well so far. I see the logic and power in your double trouble and EP identification methods. There is no need for someone like me to reinvent the wheel. The art and challenge for me then comes into designing methods for piciing the which stocks to enter positions, when and how to enter those positions, and when to exit those positions. That's what i have been working on. And so I hav e been taking a break from this, but i am not abandoning it.

Thanks for asking!

May 24, 2007 4:01 PM

BTJ long?

2007-05-06T12:35:00.000-04:00

MOV - setting up for short?

2007-05-03T13:52:00.000-04:00

MOV - notice the low volume retrace. a break above the horizontal line on decent volume would be bullish, obviously. falling below the short term ascending trend line would confirm the weakness.

i've been tagged

2007-05-02T11:52:00.000-04:00

i've been tagged Pradeep over at Stockbee:

a) my five obsessions

home renovation perfection - the tile grout's got to be just right, etc
maximizing the mpg of my toyota prius
researching compact digital cameras online with kickass wide angle lens features that i will probably never buy
eliminating the clutter from my life
staying current with current events

b) five reasons why I blog

document my ideas
hopefully solicit good advice from readers
develop and refine design and information presentation aesthetics
creative outlet
vanity

c) i’ll tag a few people if interested:

any thoughts on these charts?

2007-05-01T10:03:00.000-04:00

ISSC - a nice cup formation can be seen on the chart below.
on the close up view, ISSC broke out (big white candle) with decent volume and may have just completed a low volume pullback.

dean baker | good comic

2007-04-19T12:25:00.000-04:00

from the boston globe...

RIG stopped in its tracks?

2007-04-18T12:37:00.000-04:00

i haven't check other oil services stocks, but this may turn into a good short... will continue to monitor.

v o l u m e

2007-04-16T15:27:00.000-04:00

i try to observe stock trading volume in an attempt to judge the relative strength, weakness, conviction, etc of particular price movements, especially when these movements occur close to support, resistance and trend lines. that's why i will be checking out this article:

Volume, the Mystery
By Nigel Hawkes, President, Hawkeye Traders

Many thousands of words have been written on volume over the years, but its secrets elude many traders. Until a trader has a full understanding and appreciation of volume, though, it is my considered opinion that he or she will be making judgments that do not take into account the basic “supply and demand” of the market...

keep reading here.

SPX uptrend line pierced - on intraday basis for now

2007-04-16T12:28:00.000-04:00

BWLRF - requested chart

2007-04-15T20:52:00.000-04:00

the first chart of BWLRF shows the stock for the last 6 months. the blue box highlights the very recent break above the 1.84 horizontal resistance on big volume. this looks pretty bullish to me. the ascending rsi and sto seem to indicate strength over this same period. holding this new level will be key.

the next chart below shows the BWLRF's entire history. from this chart we can see that the $2 is critical too. this stock topped out at $2 when it first debuted. then, as the red box on the left side of the chart highlights, the stock broke out above its ipo highs but only briefly. just now its retesting this $2 level. as the shorter term chart above indicates, it looks strong. breaking above $2 on big volume will be key for not breaking down again.

if you got'em, make your chart requests

2007-04-11T23:02:00.000-04:00

i am too busy and exhausted to be authoring blog posts these days, but it's only temporary. however, for the time being, please feel free to request a chart analysis for any stocks of interest. i can find time to do that. thanks and keep it real!

the approaching moments of truth: spx

2007-04-08T21:09:00.000-04:00

i have to apoligize to my faithful readers - for a couple reasons i have not been posting as much as i would like to... for one, i have been busy with a home renovation that has gone on too long and we are nearing the end and its coming along great but it has been eating up a lot of my time lately. on top of that, the markets have been strong, and i've been letting the charts "breathe" so to say in an attempt to gain some insight about what comes next. that being said, the markets and the charts have been showing strength, and not much out there impresses me in terms of shorting. i am not fighting the the trend, or lack of it, and have been focusing then on the house and my day job. this next week will be interesting. i have two charts of the SPX for us to look at.

this first chart is a longer term view of the SPX and a major trend line highlighted in blue. we've fallen below it for a second time now. retracing to this line and busting above with volume indicates strength and would suggest perhaps more upside for some time to come. a retrace on low volume with no busting through or a busting through accompanied by a subsequent breakdown may be an additional red flag signaling the making of a top for some longer duration beyond the short term. the red circle highlights our approach up the underside of the blue uptrend line.

below is a shorter term view of the SPX. the last candle pictured is the thursday before the easter holiday - the low volume makes sense. monday and the reaction to friday's strong job numbers will start the week out with a bang. the strong job numbers suggest economic strength - i am no economist, but i imagine that low unemployment is bullish for a consumer-driven economy; however, strong numbers won't inspire the fed to cut rates. tight labor markets aren't necessarily good for company profits. anyway, back to the charts. check'em out and let me know if you have any thoughts.

half and half

2007-04-04T09:33:00.000-04:00

i am impressed as any permabull out there as to the price action in the dow yesterday - it moved up nice, held its gains, and then closed above resistance. however, check out the volume in the chart below. just because volume wasn't awesome doesn't mean that the dow won't continue higher, but it's just one thing to keep in mind. i've been busy hanging drywall lately, so i haven't had much time to post here. but that's changing soon. i have some good charts lined up.

so far so good on QID

2007-03-28T11:38:00.000-04:00

intraday post | the QID remains above the uptrend line that i pointed out a couple days ago...

ACI and the upcoming downtrend line test

2007-03-26T13:07:00.000-04:00

it looks like ACI will soon be testing the underside of a relatively long term downtrend line. i don't know much about the fundamentals of this sector, but could spring/summer be a good time to short coal? who knows - i'll be keeping an eye on the chart, price and volume, moving averages and this downtrend line.

X and steel

2007-03-26T09:55:00.000-04:00

i noticed this chart over the weekend. check out the negative divergence between price and rsi, even at barely new highs... volume at these new highs is weak too. now today, monday, it gapped up at the opening. if volume is big today and x closes at new highs, that would be very bullish. volume sucks and/or it closes weak, keep an eye on it for short. also, there may be buyout rumors circulating in the steel sector in general.

s&p and trend line retracement test

2007-03-25T11:12:00.000-04:00

the SPX is retracing to the underside of a relatively long term uptrend line (see red circle). will we see new highs here?

good time to watch QID

2007-03-22T12:40:00.000-04:00

now seems like a good time to keep any eye on the QID. it has pulled back to the upside of the red downtrend line. it may or may not find support here. also, keep an eye on volume.

RVBD, price and volume, and when to cover or at least not be bearish anymore

2007-03-22T11:46:00.000-04:00

intraday post

this chart of RVBD and the red box highlights consolidation (kinda the opposite of distribution) after a multiday fall and big volume capitulation. in the red box we see big volume without the price moving much. lots of shares are changing hands with almost equal buyers and sellers. this is usually a good sign to cover and wait for a low volume bounce to a critical resistance line. in the red box we also see a tag of the blue uptrend line - this provided support too. that's why i like trendlines - when things come together like this, which they often do, you can get a good idea about what is going to happen.

BOOM chart update

2007-03-21T13:54:00.000-04:00

BOOM - there's not a whole lot to grip on to here - but that may just be me. others may see a whole lot more. i am thinking that maybe the blue lines are highlighting the beginning of a downtrend channel with the current price at about the middle of that channel. the dashed blue line shows the short term uptrend - longs won't want to see that violated. volume is low. but do check out the purple box - i drew this for a couple reasons. notice how the rsi became oversold here but the price could not beat the most recent high as highlighted by the horizontal red line. that is bearish to me. on the day that the most recent high was achieved, a high number of shares traded hands, and the stock closed weak and continued down after that - this indicated distribution to me (high volume but not much stock movement at the top). otherwise it's meandering above the 50-day moving average and below the 200-day moving average. see something i missed?

ESRX and divergences

2007-03-21T12:23:00.000-04:00

intaday post

ESRX is at resistance, and price (as it beats recent highs) is negatively diverging with rsi, slow stochastics, and macd and macd histogram. bulls got volume in their corner. one to keep an eye on.

third circle to the rescue - HAL and the power of trend lines

2007-03-20T14:39:00.000-04:00

intraday post

these two charts of HAL demonstrate the power of trend lines and trend line support. it's significant when these trend lines get broken - so keep monitoring this one. check out the volume for today so far, too!

HAL - longer term - third circle to the rescue!

HAL - shorter term

short watch list

2007-03-19T22:31:00.000-04:00

today's volume sucked... it's late, here's my watch list for tomorrow - let me know if you have any questions about why these are short candidates or what i am waiting for before i actually go short...

ATHR

BBD

ENER

JBHT

JOYG

LRCX

MBT

fyi - my bracket

2007-03-16T09:12:00.000-04:00

doing well so far... click to get big.

friday watchlist, railroads and click to get big

2007-03-15T22:23:00.000-04:00

update friday 11:53am - call on railroads not working out bad so far...

hmm, i am a little surprise today at the lack of volume and follow through today in the markets considering the blast up we experienced yesterday. maybe it will come tomorrow/friday. at any rate, it doesn't say much for the bulls. that's why the watchlist i am presenting tonight is dominated by short candidates. big surprise, right?

AAPL - watch to make sure how AAPL opens up and behaves relative the red highlighted resistance line and the thin blue uptrend line... also notice the decreasing volume.

ATHR has fallen below the blue highlighted trend line and has retraced to its underside.

NVDA - the red box here highlights the candle and volume from wednesday march 14 when we saw such strength and volume in overall market. the volume here isn't so bad, and the price action is horrible. NVDA is now trading under its 200-day moving average.

NYX - this stock is no stranger to us... again pay attention to the red box highlighting wednesday's and thursday's action - not so hot compared to the rest of the market...

and finally i am going to present 3 charts of railroad stocks. they too are were lame relative to the overall markets. they have enjoyed a nice run up over the last many months so maybe it's time they give back some of those gains.

BNI

CSX

UNP

RVBD - intraday chart

2007-03-15T12:43:00.000-04:00

update - RVBD has kept going down all day...

RVBD dropped out of its trading range today... check back with it at the end of the day to see where it closes and the final volume tally. see all RVBD posting charting here.

NYX - another trend line failure, et al

2007-03-14T15:25:00.000-04:00

these are mid-day charts so double check where they closed for the day...

we'll have to monitor this one - no new recent low made today as it bounced up off of support, but at the open it did gap down below the uptrend line.

NVDA fell below the 200-day moving average on decent volume...

trend line failures + chart request

2007-03-14T10:08:00.000-04:00

these are mid-day charts so double check where they closed for the day...

i will be updating this post throughout the day - so check back often... also, if there are any charts you'd like to see, let me know.

LEH - nice volume!

ATI - keep your eye on it - it looks ready perhaps to fail again at the long term uptrend line - the yellow box discloses trend line details, and don't forget to review my previous post making the case for shorting steel.

ALL - more failing at the long term uptrend line! see all previous posting and charting on ALL here.

AAPL - potential to fail at the trend line - keep your eye on on the action in the red circle... the blue box highlights the gap down that has been filled. see all previous posts and charting on AAPL here.

BBD has behaved according to plan [see all previous BBD posting/charting here]. gap resistance highlighted by the blue box came into effect. also notice the negative divergence between price and volume highlighted by the red lines.

JOYG -red lines show negative price and volume divergence. a break of the short term trend line on decent volume could be a short signal. CAT is weak too...

OSG - here we see gap resistance at work, pathetic volume at the peak of the bounce, and finally this is good example of support/resistance lines originating at moving average crossovers [see this post] - the green line was drawn when the 50-day moving average crossed below the 200-day moving average (green circle). this line provided support before - will it hold this time?

RIMM opened up below the 50-day moving average today and at the time of this posting was still below. it hasn't been crashing with the rest of the market today - so that's one feather in the bullish camp. watch it here - its sitting on a short term trend line highlighted in blue.

anyone here have a blackjack?

2007-03-13T10:27:00.000-04:00

i just got one from work and trying to set it up now... any tips or good tricks would be appreciated - thanks!

back to work - price and volume on the indexes up first...

2007-03-13T09:56:00.000-04:00

we've been tracking price and volume on the indexes since plunge tuesday 27 feb 2007, and just as i expected - the indexes have moved higher on lower volume - not a good sign. but anything's possible. at any rate, i've been very busy loading and installing drywall for my home renovation, but the frequency and ferocity is going to pick back up starting now... all the best!

coloring the QID > more price and volume mechanics > trend lines > sup/resist lines

2007-03-09T10:43:00.000-05:00

the volume trend and explosion alone are impressive... is there anything predictive going on here?

ESRX, trend lines and the mechanics of price and volume

2007-03-09T10:04:00.000-05:00

price and volume can be very telling. keep in mind that any one day may or may not be meaningless in the grander scheme of things. its an ongoing, iterative, analytic process.

the significance of price and volume mechanics become more important as price approaches demonstrably significant trend lines, horizontal support/resistance lines and moving averages. for example consider the chart of ESRX below. the red circles highlight yesterday's candle and corresponding volume. note the high volume along with the failure of the price to break above the downtrend line or make any appreciable and significant movement, either up or down. yes, the stock closed down for the day, but the absolute change isn't great. this indicates large turnover of stock accompanied characterized by nearly balancing amounts of selling and buying. another word for this is distribution. sustained distribution over time or at key resistance levels is very bearish and helps to build the case for shorting. no back to ESRX - why such action here? there was news recently, but i don't follow that too hard. for better or worse, i prefer to listen to the charts - but that's just me. in all honesty, i am slacking in my ability to appreciate the fundamentals. at any rate, failure to break above or below the long term downtrend line will be significant - keep it on your radars!

chart request > BOOM

2007-03-09T09:14:00.000-05:00

update friday - nice gap above the 200-day moving average on the open
as always, click image to see a larger version - thanks!

volume valium?

2007-03-08T17:21:00.000-05:00

pretty straight forward here >

a closer look at URME

2007-03-08T15:56:00.000-05:00

the red circles show URME's most recent high - notice the underwhelming volume
the red line above the rsi indicator demonstrates negative divergence
the red candle in the blue circle is a huge bearish engulfing candlestick pattern - and just look at the volume below! for a candlestick like this to really be considered a bearish engulfing one, it should occur at the top of an uptrend - just like this one.

making the case for shorting steel

2007-03-08T13:35:00.000-05:00

steel has been one strong sucker lately, but i believe we can see some cracks in its armor (no pun intended). please consider the following and then get back to me... thanks.

AKS

first check out the crappy gapping around here at the top in the red circle. tops are often plagued by squirrelly action like this
for the last few days or so, notice the negative divergence between price and volume - as price is gapping up, the volume is decreasing
with an indicator like rsi, we like to see the rsi go up with price, and a divergence like in this case often signal tops, or temporary tops before pullbacks, corrections, or what have you

ATI

check out the red circles - they show ATI making a new high on horrible volume
the blue circle shows that same crappy gapping
finally, with both volume and rsi, we see negative divergence with price

green circle shows bounce off of short term trend line; however, the red circles highlight falling below that line and then 2 failed attempts at breaking back above it before gapping down
the purple circles show new high on horrible volume
don't forget the crappy gapping in the blue circle
and finally don't forget your negative divergences

ok, now back to charting... [to be updated throughout the day]

2007-03-08T09:46:00.000-05:00

as i come accros good charts, i will be posting here, so check back throughout the day...

$VIX and the power of trend lines - i haven't looked at the $VIX in quite some time, but a while back i drew that red downtrend line before that final spike highlighted by the blue circle ever existed. that spike resulted from tuesday 27 feb 2007 plunge. for my charting i use the basic/free version of prophet.net java charts - the application saves your drawn trend lines and extends them out to infinity for you, so over time, as days and price action accumulate, you can see how they react to or ignore these lines. check out how the $VIX ran right up to that trendline and bounced down - pretty predictive, right? you can bet that if the $VIX breaks through this downtrend line and holds above it, the markets will be much less complacent.

ISSC - it's rare that i post long suggestions, but this chart is a beauty, and i will follow it just to see how it develops. again, breaking through the blue line and holding it is key for entering this position long. on the flip side, if the stock fails here, it most likely becomes a great short candidate.

would you short the breakout? - see what kirk means in his post over at the kirk report

excited about a couple things tonight!

2007-03-07T19:26:00.000-05:00

the indexes posted ugly candles today. for most of the day, up until about 3:19pm, in fact, everything looked pretty good. however, as you know, they all closed lower than they opened. keep this in mind too - volume again was relatively low, just like yesterday. that means that for like 99% of the day the markets were up on light volume. who was buying? did the volume pick up as the indexes dropped for the last 40 minutes? i am not sure.

i am also excited because i got tim knight's new book in the mail today. i have learned a lot by frequenting his blog, so naturally i have high expectations for this new piece of literature.

finally, i am going to see the band clinic tonight - should be a great show, and i just found out that it's sold out. hopefully the bar won't be too crowded...

so far, so... so not convincing?

2007-03-06T22:50:00.000-05:00

the markets were strong today - it wasn't surprising - they were overdue for a bounce, and the previous day's failed attempt along with the asian markets rallying overnight triggered some buying or covering, or both. the absolute and % gains for the day on the indexes were impressive. but what about the volume? i compiled a graphic below showing the last 23 days or so on the three major indexes. today's gains (retracing) were accomplished on the lowest volume since last tuesday's plunge. is this buying with conviction or shorts protecting profits? or something else? who knows? who cares? i am believer in paying attention to price and volume. big gains with big volume tend to stick as so big losses with big volume. big gains or losses on little volume tend not to stick, or rather to be be less indicative of what lies ahead. the same goes for breakouts, breakdowns and any other big moves.

the real question then becomes: what does today's action say about the short term? well, anything can happen tomorrow - but for the moment i the prospects of more significant downside remain. and as for getting through tomorrow, i'll be looking at the stocks that were relatively weak today despite the observed market strength [see this post].

500th visit milestone!

2007-03-06T11:08:00.000-05:00

now, i know that 500 blog visits really is no big deal considering the breadth and scope of the internet - but it's a milestone that i did want to acknowledge here, especially because this blog is still very new and in its developmental stages.

this blog has been going on in my head for some time now, and on friday february 16th i decided to take the plunge and to articulate and commit my ideas to 1s and 0s here on this blog - countertrend.

thanks for your support! and thanks for countertrend links over at stockbee, get short!, fly on wallstreet, and trading goddess. a great deal of traffic to this site is referred from them, and you can find links to their stock blogs to the right in my links section.

relative weakness watch - tuesday 6 march 2007

2007-03-06T09:42:00.000-05:00

update tuesday 1:13pm - indecies are making new highs and these stocks are pretty much wallowing in their own muck.

just like yesterday, if you are interested in shorting in these uncertain times, one of the best methods can be to search out stocks that red or relatively unchanged despite strength in the overall market. as i stumble across them, i'll be posting stocks with shorting potential that are not way green along with the rest of the market.

ALL (10:24am | 59.04)
JOYG (12:38pm | 41.36)
CAT might as well lump it in there with JOYG (1:23pm | 63.33)
OVTI not doing much today (2:41pm)
OSG
CSX, BNI, UNP not very impressive (3:42pm)

short candidates for your consideration

2007-03-05T22:14:00.000-05:00

RVBD comes to us via mdawsz over at Get Short! i like the chart and it displays a nice combination of red flags (i lost count) that should cause longs in this stock to get a little worried:

the blue circle highlights a failed breakout attempt and notice the low volume 2 trading days before that huge gap down
the most recent big volume spike seems to indicate distribution as volume was huge but the the stock went no where
the purple cicle highlights a failure at the longest term uptrend line possible and the stock gapped down at the open and closed today under the 50-day moving average
finally, notice how the stock is working its way "across" the red parallel uptrend lines and the stock keeps failing at these lines

at the time of composing this post, the asian markets were up... in my opinion, tomorrow is a wild card. the market attempted a bounce today, and to be honest, i was surprise at how short-lived it was. if the asian markets close strong, i imagine US markets will follow tomorrow, but of course there are no guarantees. i am hesitant to put up too many more charts right now - pretty much every stock on my watchlist is at a kind of cross roads, and it seems most of them will be looking to the overall markets to set the tone tomorrow.

otherwise, ENER and MEDI are worth keeping an eye on first thing tomorrow - if they open weak and make easily obtainable recent new lows on decent volume, they might be worth a trade.

intraday relative weakness watch

2007-03-05T11:17:00.000-05:00

update monday 550pm - the power of relative weakness - stocks mentioned here that were weak this morning while the market showed a tiny bit of strength continued down even further as the indecies fell throughout the afternoon (just something to keep in mind)

just as i suspected, the markets are bouncing today (see here) despite continued asian meltdown. that being said, stocks that aren't moving up with the indecies may present lucrative shorting opportunities if the market decides to continue downward in the near future.

i will be updating this list throughout the day as i stumble upon relative weakness...

ACI - gapped down below the 50-day moving average and staying there so far (1121am)

TOL - sitting on 50- and 200-day moving average crossover support [see here for desciption and examples] - a break hear could yeild at least a buck or 2 down to trend line support (1139am)

SPG - and the rest of the reit sector (are, iyr, etc) - the first red flags of an amazing rally? (1144am)

LVS - looks horrible and has some room to fall before hitting support and the 200-day moving average (151pm est)

OVTI - sitting on critical uptrend support line - a break on decent volume would be nice (click image for larger view of chart) (201pm est)

wow, the end must really be near...

2007-03-04T23:59:00.000-05:00

week of march 5th magazine cover for barron's magazine. contrarian indicator? check with pradeep over at stockbee for magazine cover analysis (not sure if he's stumbled across this one yet...)

Still Betting on the Bull

By Andrew Bary

THE GLOBAL STOCK-MARKET SELLOFF that stunned investors Tuesday looks more like a passing squall than a full-throttle hurricane.

The swift fall fittingly began in China, now the engine of economic growth worldwide, and quickly spread to the U.S., where the major market indexes lost 3% to 4% in a single session. A decline of that magnitude, the worst in four years, understandably inspired fear that the current bull market, which began in October 2002, has come to its untimely end.

Such concerns seem premature, however, because the global economy still looks healthy, equity-market valuations are reasonable in most major markets ...

[i don't subscribe so can't read more here]

watchlist | click charts for larger images

2007-03-03T22:03:00.001-05:00

many stocks on my radar are sitting on their 50- or 200-day moving averages - i am expecting a bounce here over the next day or so, and then we should have a better idea of where the markets will be heading. here's what i'll be watching for the first part of this week:

shorts

AAPL's relative strength compared to the overall markets blast down shouldn't be ignored - that's why handle this one with care. but please do notice how it's capped by the 50-day moving average and how it has gapped down below that super long term blue uptrend line going back to the low of the day on 22 dec 2003. tracing back to the underside of uptrend lines and failing to break back above often provide good shorting opportunities

HOC - i like the negative divergence here between price and rsi, barring any breakout above the resistance line on big volume.

MBT - this gap down and the resistance at the 50-day moving average make this one to watch.

wait for the retrace (hopefully on low volume)

BBD - i charted this stock a while back and look how far it's come down! this is on my wait for a low volume bounce before shorting again. $38ish, the bottom of the gap down should provide decent resistance - it it passes that, perhaps wait for the 50-day moving average.

LRCX - charted earlier too! pretty straight forward here.

reluctanct longs

NVEC could move above (or gap above) the downtrend line, the 50-day moving average and the 200-day moving average in one fell swoop... or not. one to watch!

XING is a great, long term cup and handle pattern - and it has just pulled back - i may buy if it holds support here.

interesting but not sure

XLE

chart request follow-up - RIMM

2007-03-03T20:10:00.000-05:00

RIMM may be good for an intraday or 2-day short scalp - the sucker sure is volatile, but as for any medium- to longer-term short position, i'd still like to see a test of recent highs on light volume.

consider that RIMM was down hard on ok volume on friday - if markets bounce, even a little on monday, RIMM will probably follow -and that would be a good thing for the "real" short setup that i think is yet to come.

red flags

RIMM just seems to be too high and blackberries are boring - palm treos, blackjacks, motorola Qs and iPhones are where it's at. also, are we witnessing distribution up here? i am no expert on recognizing distribution, but we are seeing lots of share turnover without much upside to the stock. if not distribution, it could be consolidation, but there is something sketchy about this. also, notice the super-long term negative divergence between price and volume, at least for the spikes.

the most recent big volume days are bearish

failed breakout?

is this longer term uptrend line break significant?

finally, RIMM recently fell below th 50-day moving average on higher volume than when it more recently popped back up above it (sorry no chart)

would like to see

another test of the recent highs on low/pathetic volume

break of the 50-day moving average since we are all the way up and it's not too far away (obviously)

just another manic monday for the markets?

2007-03-03T19:26:00.000-05:00

i doubt it...

just for fun and to test my powers of assessing what the masses are thinking, i try to decide what everyone is expecting, or rather, how should the market behave and/or respond to recent developments. then, just assume that the opposite will happen. we've all done it - but it's actually much harder than it sounds. since i've been following markets and trading, one can rationalize anything that happens after the fact - just the investors in my 20/20 fund (they love the returns). at any rate, i understand that there are various market profiles or perspectives. the retailers vs the institutions vs the daytraders vs the hedge funds, etc - everyone has a different idea of what "should" happen next and why.

that being said, we think that most people were expecting some kind of bounce on friday, and they didn't get it. the dow, nasdog, s&p, etc all closed down. i do think some kind of "real" dead cat bounce will materialize on monday. although the analysis isn't too technical, the blue support line in the chart of the dow just looks like a good place to take a little rest before we continue. we have to work off some of the "oversoldness" of the market. now, if global markets are crashing sunday night (monday for the asian and european markets) - all bets are off. gapping down monday morning will make turn a delicate situation into a disaster.

oh yeah, any retracing would be on low volume.

thanks and the monday stock watchlist still to come!

who knew a smart person could win the lottery?

2007-03-02T11:36:00.000-05:00

thanks to my friend ron for forwarding this one

Taking home the jackpot

Here's how one lucky winner spent his new-found fortune

By Ellen Florian Kratz, Fortune writer

February 28 2007: 7:46 AM EST

(Fortune Magazine) -- Brad Duke, 34, a manager for five Gold's Gym franchises in Idaho, pocketed a lump sum of $85 million after winning a $220 million Powerball jackpot in 2005. He spent the first month of his new life assembling a team of financial advisors. His goal: to use his winnings to become a billionaire. Here's what Duke has done with his money so far.

$45 million: Safe, low-risk investments such as municipal bonds

$35 million: Aggressive investments like oil and gas and real estate
$1.3 million: A family foundation
$63,000: A trip to Tahiti with 17 friends
$125,000: Mortgage retired on his 1,400-square-foot house
$18,000: Student-loan repayment
$65,000: New bicycles, including a $12,000 BMC road bike
$14,500: A used black VW Jetta
$12,000: Annual gift to each family member

[keep reading here]

weekend chart request

2007-03-02T11:21:00.000-05:00

before the open on monday morning i will be posting my stock watchlist and charts for next week. also, feel free to request charts for your own stocks of interest in the comments section. and what do you think - up or down today and next week? share your thoughts - thanks!

trend lines at work - NYX for short?

2007-03-01T10:36:00.000-05:00

update 1116am friday 3/2 -NYX opened strong and remains strong. it has already filled yesterday's gap - still monitoring

update 402pm thursday 3/1 - NYX closed above its opening price, but there was a huge gap down at the open, and it didnt close up much on more than average volume. i will be watching this one tomorrow morning for a short entry.

in the chart below, the intersection of the blue uptrend line and the red horizontal support line represents a critical support for this stock. if it's broken, especially with decent volume, there could be more downside, otherwise, if this support holds, i wouldn't consider shorting until there is retracement up to the underside of some significant support line or moving average.

dean baker watch

2007-03-01T01:04:00.000-05:00

Should Bernanke Be Stabilizing Financial Markets?

In his testimony before Congressional today, Ben Bernanke reportedly made an effort to sooth uneasy financial markets. For this he was widely applauded by the business press. But is it the Fed’s job to be soothing financial markets? [continue reading here]

Down Market? Look at the Fundamentals

Listening to NPR and reading the business press commenting on yesterday's Wall Street selloff, I repeatedly see the phrase "look to the fundamentals." This is good advice, but I can't imagine which fundamentals these folks are looking at, since the fundamentals seem to reassure them. [continue reading here]

chart request follow up - BOOM

2007-02-28T19:23:00.000-05:00

update 947am thursday 3/1 - BOOM gapped down. next support for BOOM = 50-day moving average = 29.42ish. it seems to have bounced there for the moment.

BOOM before tuesday 27 february 2007 - after the close on monday i posted an analysis and chart of BOOM (click the underlined phrase to see that analysis).

so have yesterday and today change BOOM's chartscape? if we zoom out a bit we get see the following:

the green circle highlights the april 2006 all time high
the top red line is the downtrend line that was put in place in early september
the purplish circle highlights BOOM's initial aversion to breaking above this
downtrend line as the top of the previous gap (thin top reddish line) provides
resistance (also notice the low volume at this time in the next chart)
after the purplish circle, you can see BOOM finally breaks above the resistance and the red downtrend line
the blue circle highlights yesterday and today

now, let's zoom back in

the red circle contains yesterday's dow plunge candle and today's candle - notice how the corresponding daily volumes aren't necessarily low, but they aren't anywhere near the volume of the three previous trading days
the two previous trading days in the blue and green circles represent the day of a post-market close earnings release and the day after earnings release, respectively. the huge volume coupled with price action that went relatively nowhere suggests distribution (or high turnover of stock, perhaps as smart or big money is unloading to those who want to play long the earnings and the explosive potential of BOOM)
the day after earnings (the green circle), the price peaks but the stock closes down and weak for the day on huge volume
the following day and the huge down candle represent heavy selling on less volume than the two previous days. the candle breaks the very short term uptrend line. why the big down day? i am not sure - the previous days' distribution is one reason - no one to buy, and perhaps there were some sector dynamics at play as well.
again, the red circle contains yesterday and today. yesterday BOOM gapped down back to underneath the long term thick red downtrend line (discussed above). this represents a failed breakout for BOOM above this line earlier. BOOM also gapped down into that thin reddish line gap zone.
on the bullish side, however, BOOM is being supported by the 200-day moving average (thin blue line underneath the body of the candles in the red circle, and these candles have closed above the purple short term uptrend line

so what does all this mean? well, i would monitor for the next couple days. BOOM is pretty well backed into a corner here so chances are, the next day or so is going to give us a strong indication. the following scenarios are possible:

bullish scenario - on thursday and after, BOOM opens anywhere above the purple uptrend line and holds that line, preferably closing above the thick red downtrend line and the thin reddish top of the gap zone line... it accomplishes that, however, there is more overhead resistance above (e.g., the bottom of that big downward candle)

bearish scenario - on thursday and after, BOOM gaps down and opens below the 200-day moving average and below that short term purple uptrend line, and closes the day below them. this to me would seem to indicate more downward motion.

either way it will be interesting...

interesting

2007-02-28T19:05:00.000-05:00

this comes to us via tickersense today

any chart requests? and intraday fibonacci retracement lines on the dow

2007-02-28T16:02:00.000-05:00

if you'd like to see how i might interpret a stock you are interested in, please feel free to make a request in the comments section.

as for finding short candidates under these conditions, i am scanning for stocks that didn't participate in today's bounce. the dow closed the day up over 50 points - which stocks closed in the red or relatively unchanged? LEH did, and i am sure there are others. relative weakness may be the key, at least for now.

yesterday's huge drop has pushed many of the stocks on my watch list very close to critical 50- and 200-day moving averages as well as critical support and uptrend lines. in my opinion, today's action doesn't say much about where may be going so its still a wait-and-see situation out there...

on days like this (big drops and potential dead cat bouncing) i like to follow the action with the added insight provided by fibonacci retracement lines

¡banderas rojas! (red flags!) [click chart for larger image]

2007-02-26T22:30:00.000-05:00

BBD - getting interesting here - under the 50-day moving average - under a short term downtrend line - and sitting on support - we'll see how strong it is...

BOOM - last friday and thursday were big distribution days as BOOM went essentially no where on big volume and experienced that squirrelly gap up at the top. today BOOM pulled back through thru support indicating a failed breakout (at least for the moment) and fell below a short term uptrend line on big volume - what's next?

CRDN - tim knight mentioned this on his blog tonite - in addition to the huge bearish engulfing candle he noticed, i thought i would point out the break of the 50-day moving average and the break of the short term uptrend line, all on great volume!

GROW - the 50-day moving avererage has transitioned from support to resistance (see the red circles - i have also highlighted how the price action is becoming wedged between support and the downtrend line - which will break first?

LEH - candle in the red circle shows the price opening below the uptrend line and breaking the 50-day moving average on nice volume - the candle in the blue circle shows more selling/downward pressure with even more volume - will the break-out support hold?

MEDI - the 50-day moving average along with 50-day and 200-day moving average crossover resistance (green line) still capping this sucker (see the post: another signifance for moving average crossovers)

another signifance for moving average crossovers

2007-02-22T11:10:00.000-05:00

these points of the 50-day and 200-day moving average crossover seem to be significant for drawing support/resistance lines...

MEDI

NDAQ

intraday post (click charts for larger image)

2007-02-22T10:50:00.000-05:00

CNX = TBD = too be defeated by MA200?

ESRX popped up above the down trendline so now it tests the next resistance...

LRCX is sub MA200 and riding the trendline down, so far...

GROW - too obvious? Getting shares to short was impossible before...

taking chart requests

2007-02-21T11:12:00.000-05:00

please feel free to make requests for charts you'd like to see and commentary you'd like to read...

short watchlist (click charts larger images)

2007-02-19T20:41:00.000-05:00

ALL

CAT's break above the the ma200 and the downtrend was catalyzed by an increase in share buy back - will it hold? volume on this breakout isn't bad but it isn't awesome either

MEDI retraced perfectly to underside of the trendline and filled the gap - there is news, so i am not sure exactly where this one is going

potential short candidates

2007-02-16T13:49:00.000-05:00

bbd

esrx

osg

oxy

rig