Thursday, June 14, 2007

 
Technical Indicators

Directional Movement Index (ADX)


Directional Movement helps determine if a security is "trending." Developed by Welles Wilder and explained in his book, New Concepts in Technical Trading Systems, it can be used either as a system on its own or as a filter on a trend-following system.

Two lines are generated in a DMI study, +DI and -DI. The first line measures positive (upward) movement and the second number measures negative (downward) movement. A buy signal is given when the +DI line crosses over the - DI line while a sell signal is generated when the +DI line crosses below the - DI line.

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Trading Ideas & Picks

AMEX GOLD BUGS INDEX- HUI - Channel pattern

HUI - is bouncing off the lower support of a channel pattern. Traders will start to pay close attention to HUI because the bulls may decide to enter at current levels because of an interesting risk/reward situation...

Trading Picks - Read More

 
Trading Ideas & Picks

Swing Trade of the Week

ARNA: Stock ended its previous downtrend with a nice bullish candle, causing an MA crossover up, then produced a reversal candle, right at the recent support. Look to go long at 12.95...

Trading Ideas - Read More

 
Trading Education Tutorial
Courtesy of Nirvana Systems

Measured and Exhaustion Gaps





Identifiable Patterns After Confirmation Move

We have previously mentioned the three types of gaps that are of relevance to investors - the breakaway gap, the measured (or continuation) gap, and the exhaustion gap. We previously discussed the breakaway gap, but it is important to discuss the measured gap and exhaustion gap at the same time. Why? Because it is difficult to tell one from the other until after the fact.

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NASDAQ Chart of the Day
Courtesy of Nirvana Systems




EPIQ has broken a clear lower trend line at 16.80 after trending steadily above this line for the last four months. This break, sparked via breakaway gap, could lead to much more selling ahead.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




ETH has bounced off critical support at 34.00 many times over the past six months and is now holding back at this level. If ETH can remain above 34.00, we could see another quick rally back toward prior highs.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

Updated Wednesday, 6/13 for Thursday's market.

Key DOW Levels for 6/14

UP

Above 13,500

DN

Below 13,250


Rally From Lows...

- Dow reverses from opening lows, rallies nice to the Close. The index later picked up more steam late in the afternoon and proceeded to rally a full 150 points from the afternoon lows and eventually closed with a huge 187 point gain.

- The NASDAQ and S&P each pushed solidly higher from the day's lows, pushing new highs into the Close. Look to resistance tomorrow for more signs of strength.

Summary

The Dow closed the day with a huge gain after trending steadily higher throughout the session. The index sits at the top of the large consolidation range that continues to build out. Continue to watch this range for a potentially big breakout move soon.

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Wednesday, June 13, 2007

 

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Technical Indicators

Percentage Volume Oscillator (PVO)

Ihe Percentage Volume Oscillator (PVO) is the percentage difference between two moving averages of volume. Because of its formula, the PVO has a maximum value of +100, but no minimum value. The absolute value is not as important as the direction or the crosses above and below the zero line.

The PVO can be used to identify periods of expanding or contracting volume in three different ways:

· Centerline Crossovers:

· Directional Movement:

· Moving average crossovers:

Movements in the PVO are completely separate from price movements. As such, movements in PVO can correlated with price movements to assess the degree of buying or selling pressure. Advances combined with strength in the PVO would be considered strong. Should the PVO decline while a security's price fell, it would indicate decreasing volume on the decline.

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Trading Education Tutorial
Courtesy of Nirvana Systems

Island Reversals





Stand Alone Formation Speaks Volumes

Reversals tend to occur slowly, with securities forming double bottoms, higher lows, head and shoulders patterns, etc. before starting a new trend. However, sometimes we see a dramatic reversal immediately, and one of the best indications of these types of reversals is Island Tops and Bottoms.

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NASDAQ Chart of the Day
Courtesy of Nirvana Systems




NBIX has pulled back nicely from lows after dropping sharply from April highs. The stock has now pulled back to 62% of the prior move and could be ready to head back down soon. Watch the 13.20 zone as a level for reaction.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




AOI has trended steadily higher since last Fall, but is now encountering triple-top resistance at 10.50, which could offer a sizeable retracement. Watch this zone for a breakout or reversal for the next key move.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

Updated Tuesday, 6/12 for Wednesday's market.

Key DOW Levels for 6/13

UP

Above 13,500

DN

Below 13,250


Another Late-Day Sell-Off...

- Dow reverses from mid-day highs, drops hard to the Close. After topping out at 13,450, the index proceeded to drop 155 points to the Close, clocking a 130 point loss for the day.

- The NASDAQ and S&Peach sold off late in the day and are now challenging the bottom of bearish consolidations.

Summary

The Dow ended the day at the session's lows after tumbling over 150 points to the Close. The index remains above critical support at 13,200, but this level could soon be tested.

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Tuesday, June 12, 2007

 
Technical Indicators

Volume Accumulation

Created by Mark Chaikin, the Volume Accumulation Oscillator shows the cumulative volume adjusted by the difference between the close and the midpoint of the day's range.

Compared to the On Balance Volume (OBV) indicator which assigns all the day's volume to the buyers if a security closes up or to the sellers if it closes down, Volume Accumulation uses the relationship of the closing price to the mean price to assign a proportion to the volume.

Use the Volume Accumulation Oscillator as you would the OBV and let volume confirm a trend. A rising price trend will be confirmed by a rising VA line. An uptrend paired with a rising Volume Accumulation line is considered bullish while a Volume Accumulation line that diverges from the price direction of movement should warn of a near-term price correction...

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Trading Ideas & Picks

Trading Ideas for today and tomorrow...

Swing Plays - A word of caution is in order here. Even though monthly momentum tweaked up because of Friday’s large rally, June is not even halfway in the books yet. We are going to be receiving critical information this week on PPI and CPI, and bond and stock traders are going to be locked and loaded to make position changes at a moments notice...

Trading Ideas - Read More

 
Trading Ideas & Picks

The Weekly Report for une 11th - June 15th - The Market Shows Weakness

The bears took control of the momentum last week and, as a result, they sent the major indexes down toward the support of their respective 50-day moving average. It is not uncommon to see a sharp correction of approximately 2-5% after an extensive rally because there is not enough demand to offset the amount of selling pressure created from those looking to lock in a profit...

Trading Picks - Read More

 
Trading Education Tutorial
Courtesy of Nirvana Systems

Support and Resistance Levels




History Tells Us When Securites are Overbought or Oversold

Support indicates a level on the chart where we can expect an increase in the demand for a security (buyers take over). How do we know this? By identifying this reaction to this price level in the chart's history.

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NASDAQ Chart of the Day
Courtesy of Nirvana Systems




BIIB is holding firmly beneath key resistance at 52.50, which has held since last December. Look for weakness from this level, unless a breakout occurs.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




CIT is consolidating at highs beneath a clear resistance level that has formed at 61.50. This level has held since February and is clearly the level to watch for the next big move. Watch for a breakout from the tight consolidation early direction. Watch 58.40 down, and 61.50 up for key directional movement.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

Updated Monday, 6/11 for Tuesday's market.

Key DOW Levels for 6/12

UP

Above 13,500

DN

Below 13,250


Late-Day Decline...

- Dow bounces back toward 13,500, but closes with a late-day decline. The index pushed just short of 13,500, but turned down late in the day and sold off back toward the breakeven point, ending the day with a 1 point gain.

- The NASDAQ and S&P each sold off from the day's highs, with the tech-heavy index leading the way down into the Close. Each index remains within the boundaries of a large trading range, which we will continue to watch for medium term direction.

Summary

The Dow closed the day basically flat after rallying from early lows, then dropping late in the session. The index continues to hold above key support and below all-time highs. Look for more range movement within this range until a solid breakout occurs.

Read More...

Monday, June 11, 2007

 
Technical Indicators

Projection Oscillator

The Projection Oscillator is a by-product of Dr. Mel Widner's Projection Bands. In essense a slope-adjusted Stochastic, the Projection Oscillator shows the relationship of the current price to its minimum and maximum prices over time. Unlike the Stochastic Oscillator, here the minimum and maximum prices are adjusted up or down by the slope of the price's regression line. It is this adjustment that makes the Projection Oscillator so responsive to short-term price moves.

Perhaps the best way to understand the relationship between the Projection Oscillator and Projection Bands is the knowledge that the Oscillator shows where the current price rests between the current location of the bands. A value of 0 indicates that prices are touching the bottom band, a value of 50 indicates that the current price is exactly in the middle of the two bands while a value of 100 indicates that prices are touching the top band...

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Trading Education Tutorial

Pattern Cycles: Reversals

No chart pattern better illustrates this slow evolution from bull market to bear decline than the Descending Triangle. Within this simple structure, the trader examines how life drains slowly from a dynamic uptrend. Variations of this destructive formation precede more breakdowns than any other reversal. And they can be found doing their dirty deeds in all time frames and all markets.

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.
..

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Trading Ideas & Picks

Weekly Swing Ideas Report for June 11th - June 15th

Stock Picks - Long and Short Potential Swing Candidates ... SwingTracker Scans: Trading Window, Force Swings (WMT WAL MART STORES INC, JNPR JUNIPER NETWORKS INC, TGT TARGET CORP, MOS Mosaic Co), Triangle, Revival (EMC E M C CORP MASS, HPQ HEWLETT PACKARD CO, NVDA NVIDIA CORP, GLW CORNING INC, SNDK SANDISK CORP), Reversals, Breakouts (EFD EFUNDS CORP, AFSI AMTRUST FINANCIAL SERVICES, JDAS JDA SOFTWARE GROUP INC), and more...

Trading Ideas - Read More

 
Trading Education Tutorial
Courtesy of Nirvana Systems

Triangles




Tightening Price Action Leads to a Breakout

There are various forms of consolidation and they occur anytime there is an equilibrium of buyers and sellers. One of the most predictive consolidation formations is the triangle.

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NASDAQ Chart of the Day
Courtesy of Nirvana Systems




MTRX has built out a solid consolidation pattern at highs from 24.00 to 27.50, which could offer an explosive breakout move soon. Watch this range for key direction soon.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




LZB is holding right at key support at 11.20, which has held since last December. This is the third touch on this support level and, if it holds, could send the stock into a nice uptrend. Watch for strength above this zone, unless support is violated.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

Updated Friday, 6/8 for Monday's market.

Key DOW Levels for 6/11

UP

Above 0

DN

Below 13,225


Big Bounce...

- Dow bounces from early lows, rallies to the Close. The index wound up throughout the day and eventually broke out above 13,320 and rallied 100 points and ending the day with a solid 158 point gain.

- The NASDAQ and S&P each bounced sharply from early lows and closed the day at the session's highs. Look for this pull-back to form the framework for a potential consolidation range next week.

Summary

The Dow ended the day at the session's highs after rallying steadily from the morning lows. The index has bounced back nicely after yesterday's decline, but remains well off the highs set late last week. Look for the index to potentially build out a range at lows ahead of the next key move. Continue to watch 13,200 for more selling pressure.

Read More...

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