Tuesday, September 16, 2008
Lehman, Merrill, Fannie: Irony & Opportunity
Fannie Mae. Freddie Mac. Lehman. Merrill Lynch. AIG. What's next?
You've already heard about Washington Mutual and Wachovia. Dismal, right?
Yes, but an opportunity as well!
Has the real estate market hit rock bottom? Unlikely.
Has the financial market debacle hit its low? Unlikely.
Has the stock market reached its low? Unlikely.
Is the economy at rock-bottom? Unlikely.
There was one quote we read this weekend talking about a light at the end
of the tunnel - and the answer was yes, there is but then there's a
speeding train right behind it. Makes you wonder...
It's ironic - The very same corporations that resist regulation at every
turn are now first in line for the most massive government bailouts we've
seen in our lifetimes. Suddenly the hand of government is not so bad but
the ramifications are completely unknown. With record deficits already,
the call for tax cuts during this election season and now these bailouts...
the formula looks destined to fail.
Keep in mind that smaller banks, corporations, small businesses and
individuals will not be so lucky and get bailed out - only those considered
to large to fail.
Consider for a moment that many of those institutions now in trouble were
fully supporting the privatizing of Social Security. There's no telling how
bad things could have unraveled if the losses were even further compounded!
We just might have gotten lucky with that one when Congress became
paralyzed over the issue.
So, where does that leave us as traders?
Actually and maybe surprising to some, in good shape.
Check out this short video the Netpicks' UMT Trading Team has put together:
http://universal-market-trader.netfirms.com
This should act as the ultimate reminder and lesson on why you should never
listen to all of those "opinions" that are bantered about, ESPECIALLY when
it's spouted by someone who has something to gain. Remember the stock bull
market that was built upon lies and hype in the late 1990's? With all
those analysts touting all those worthless, nonsense stocks? You remember
what happened... when's the last time the NASDAQ has seen 5,000 since then,
right?!?
When that fell apart, the minds of Wall Street went to work on this massive
leveraged-based set of strategies. These same strategies are now being
unraveled in a panic that is both compounding and exposing the problem -
the deceptions and the fraud.
We cannnot say this enough. Don't trust anyone with a vested interest in a
stock or a company's fortunes.
Let's instead focus on taking advantage of price. Moving up, moving down.
No opinion one way or the other.
The beauty for us using a strategy like the Universal Market Trader
(http://www.universalmarkettrader.com/public/154.cfm?affID=unitrade)
is we can look at all of our trades with what we call "The Power of 10."
What's the Power of 10?
It's simple. If we look at a 1 minute chart it means all we care about are
the next 10 minutes. An hourly chart, the next 10 hours. A daily chart,
the next 10 days. A 200 tick chart the next 2,000 ticks (10x200). A
weekly chart, the next 10 weeks.
When we day traded the e-Mini index today we actually had buying
opportunities - yes, that's correct. In a day down nearly 500 Dow points
there was a place to buy and pr*ofit. However, if we look at charts in our
Universal Market Trader where the timeframe was longer, there wasn't a
single place we would care to buy.
What do we suggest you do?
1. Keep the Power of 10 at the forefront of your trading. Just look ahead
10 bars -- that's all we want to do to simply put the odds in our favor for
the next 10 bars of ANY timeframe. Nothing beyond that.
2. Forget the fundamentals. Sure, have fun after the market is closed and
see if you can correlate the fundamentals but there are very few who can
truly analyze a global economy with all of its moving parts and come up
with a relible predictor. You've seen dozens of pros on TV failing at
every turn to predict this.
3. Think 2/3rds, 1/3rds. That means strive for putting the odds in your
favor 2/3rds of the time -- completely accept the fact that you will be
wrong 1/3rd of the time.
4. Do not listen to anyone who has a vested interest in the opinion their
given. The bias is too much to overcome.
5. If you bank somewhere with exploding non-performing assets you should
be sure you fall within the coverage provided by the FDIC. There will be
more bank failures and you need to be sure your assets are safe.
6. It is the system. Your trading system. You simply have to have a
sound approach to trading in these times. The opportunities are there.
The volatility is excellent. When you can just focus on the next 10 bars
and you see the type of trading range and activity we're getting, you need
to believe that this is an opportunity. It is -- perhaps one of the best
we've experienced. If you're not locked into a direction or opinion we can
all capitalize.
Here's the video we put together just to give you an idea of why you should
empower yourself with a trading system that abides by all of these rules.
Whether you ultimately choose the Universal Market Trader or go another
direction, you will serve yourself well to follow this.
Be amazed, be shocked, be dismayed perhaps about what has taken place, then
realize that it's time to pounce on this opportunity.
P.S. "Universal Market Trader" is now Available
Trading Multiple Markets in Multiple Timeframes With Zero Subjectivity
Trading Forex, Futures & Stocks -- Day and Swing Traders
http://www.universalmarkettrader.com/public/154.cfm?affID=unitrade
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Saucer Patterns
Rare Pattern Is One of the Most Predictive
Read More...
Moving Average, Triple Exponential
The Triple Exponential Moving Average (TRIX) is an oscillator used to identify oversold and overbought markets as well as a momentum indicator. For use as an oscillator look for a positive value to indicate an overbought market and a negative value indicate an oversold market. When TRIX is used as a momentum indicator, a positive value suggests increasing momentum just as a negative value suggests momentum is decreasing. Some believe that the TRIX crossing above the zero line is a buy signal and a closing below the zero line is a sell signal. Divergence between price and TRIX can also indicate significant turning points in the market.
Read More...
Bottoms print as a result of market physics. Uptrends and downtrends exhibit natural wave motion as they thrust forward, and they pull back to test gains or losses. This action-reaction becomes very important at market turning points. It implies that a reversal pattern will appear at some point in each trend. In an uptrend, a lower high will eventually follow a higher high and mark a new top. In a downtrend, lower lows will finally stop when price action prints a higher low. This marks the birth of a bottom.
Read More...
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
Updated Monday, 9/15 for Tuesday's market.
| Key DOW Levels for7/7 | |
| UP | None |
| DN | Below 10,800 |
Major Sell-Off....
- The NASDAQ and S&P each opened the day with bearish movement this morning and eventually closed at the day's lows. Look for more overall weakness ahead.
Summary
The Dow ended the day sharply lower after breaking back below 11,400 en route to closing beneath 11,000 for the first time in several months. Look for a potential test of the July lows ahead.
Read More...
Monday, July 07, 2008
Pattern Cycles: Reversals
But why does it work with such deadly accuracy? Most traders don't understand how or why patterns predict outcomes. Some even believe these important tools rely on mysticism or convenient curve fitting. The simple truth is more powerful: congestion patterns reflect the impact of crowd psychology on changes in price and momentum...
Read More...
Courtesy of Nirvana Systems
Moving Averages and the Trend
Moving Averages Help Us Identify Trend Reversals
Read More...
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
Updated Thursday, 7/3 for Monday's market.
| Key DOW Levels for7/7 | |
| UP | Above 11,450 |
| DN | Below 11,150 |
Still Consolidating....
- The NASDAQ and S&P each remain within their respective consolidation patterns, which we will continue to follow next week.
Summary
The Dow closed the day within the boundaries of the clear consolidation range, which we will watch for direction next week. A breakout from this pattern should spark the next big directional move.
Read More...
Wednesday, April 02, 2008
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Trading Signals of the Day
Reversal bars are an objective technique used to time the entry of a trade. Read More... http://daily-stocks.netfirms.com/daily-trading-triggers.htm
Use the PFE indicator to measure how trendy or congested the price action is. PFE readings above zero indicate that the trend is up and the higher the reading the "trendier" and more efficient the upward movement. PFE readings below zero mean that the trend is down. The lower the reading the "trendier" and more efficient the downward movement. Readings near zero indicate choppy, less efficient movement and a balance between supply and demand.
Courtesy of Nirvana Systems
Moving Averages and the Trend
Moving Averages Help Us Identify Trend Reversals
Read More...
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
Updated Tuesday, 4/1 for Wednesday's market.
| Key DOW Levels for 4/2 | |
| UP | Above 12,700 |
| DN | None |
Huge Rally...
- The NASDAQ and S&P each rallied beautifully out of their respective channels today. Each index is now testing the upper boundary of its trading range, which will be key moving forward.
Summary
The Dow closed the day at the highs of the session, but remains at the top of the large trading range, which means the index has yet to get a convincing breakout from this range. Watch 12,700 for clear signs of strength out of this range and for a potential test of the 12,800 level.
Read More...
Tuesday, April 01, 2008
| ETF Profit Driver
|
Five Fibonacci Tricks
Fibonacci ratios describe the interaction between trend and countertrend markets -- 38%, 50% and 62% retracements form the primary pullback levels. Apply these percentages after a trend in either direction to predict the extent of the countertrend swing. Stretch a grid over the most obvious up or down wave, and see how percentages cross key price levels.
Convergence between pattern and retracement can point to excellent trading opportunities. Keep in mind that retracements work poorly in a vacuum. Always examine highs, lows and moving averages to confirm the importance of a specific level...
Read More...
Courtesy of Nirvana Systems
Triangles
Tightening Price Action Leads to a Breakout
Read More...
Courtesy of Nirvana Systems
INSU is winding up within a clear triangle range that has been winding up since December. A breakout from this pattern could eventually spark a move of about 5.00 points. Watch 15.30 up, and 12.90 down.
Daily Trading Signals
Courtesy of Nirvana Systems
MRK took a large gap down today on increased volume and remains within a very bearish downtrend. Look for more overall weakness beneath 40.00 ahead.
Daily Trading Signals
Courtesy of Nirvana Systems
Updated Monday, 3/31 for Tuesday's market.
| Key DOW Levels for 4/1 | |
| UP | Above 12,650 |
| DN | None |
Bounce within Channel...
- The NASDAQ and S&P each mirrored the Dow today, as each remained within their respective channels near the center of the overall trading range. Watch the clear fulcrums for direction ahead.
Summary
The Dow continues to hold within the boundaries of the downtrending channel. A breakout from this channel could offer an early clue on direction within the overall trading range. Watch this pattern closely.
Read More...
Monday, March 17, 2008
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Wave impulses correspond with the crowd's emotional participation. A surging 1st Wave represents the fresh enthusiasm of an initial breakout. The new crowd then hesitates and prices drop into a countertrend 2nd Wave. This coils the action for the sudden eruption of a runaway 3rd Wave. Then after another pullback, the manic crowd exhausts itself in a final 5th Wave blowoff.
Traders can capitalize on trend waves with very little knowledge of the underlying theory. Just look for the 5-wave trend structure in all time frames. Locate smaller waves embedded in larger ones and place trades at points where two or more time frames intersect. These cross-verification zones capture major trend, reversal and breakout points...
Read More...
Courtesy of Nirvana Systems
Volatility
Well Behaved Stocks Reap Rewards
Read More...
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
Daily Trading Signals
Courtesy of Nirvana Systems
Updated Friday, 3/14 for Monday's market.
| Key DOW Levels for 3/17 | |
| UP | Above 12,300 |
| DN | Below 11,850 |
Defining a range...
- The NASDAQ and S&P continue to build out a wide range bound pattern, as the bulls and bears escalate their fight for dominance.
Summary
The Dow ended the day down and continues to build out a range while looking for direction. Watch the boundaries of this pattern, as a breakout could spark big movement ahead.
Read More...
