Thursday, August 09, 2007

 
Technical Indicators

Relative Momentum Index (RMI)

Introduced by Roger Altman in the February 1993 issue of Technical Analysis of Stocks & Commodities magazine, the Relative Momentum Index is a variation of the Relative Strength Index (RSI). Instead of counting up and down days from close to close like the RSI, the Relative Momentum Index counts up and down days from the close relative to a close n-days ago (where n is not limited to 1 as required by the RSI).

As with all overbought/oversold indicators, the RMI exhibits similiar strengths and weaknesses. In strong trending markets the RMI will remain at overbought or oversold levels for an extended period. In non-trending markets the RMI tends to predictably oscillate between an overbought level of 70 to 90 and an oversold level of 10 to 30. When the RSI diverges from the price, the price will eventually correct to the direction of the index.

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Trading Signals of the Day


Bullish Reversal Triggers





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

 
Trading Education Tutorial
Courtesy of Nirvana Systems

Double Tops and Bottoms





Waiting for the Setup to Complete Results in Profits

There are various chart patterns that help us find good reversal candidates. Of the major reversal patterns, the double top or bottom is not only one of the most recognizable, but also one of the most predictive.

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NASDAQ Chart of the Day
Courtesy of Nirvana Systems




DLLR is getting a big bounce at key support at 23.00, which has held up since the Spring. Look for more strength above this level, unless a break occurs.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




NBR has sold off steadily from the 36.00 range, but has found support once again at 27.45, which has held up nicely since last Fall. If the stock can continue to hold above this zone, we could see another rise back toward prior highs at around 36.00.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

Updated Wednesday, 8/8 for Thursday's market.

Key DOW Levels for 8/9

UP

Above 13,700

DN

Below 13,475


Late-Day Volatility...

- Dow trends higher throughout session, but swings wildly into the Close.

From prior commentary, "...We could see the index push slowly higher back toward 13,700, but we should continue to see weakness beneath anything below 13,800..."

The Dow trended slowly and steadily higher toward the 13,700 zone today, coming within nine points of hitting this level, as seen in the 15 Minute Chart. The index immediately sold off from this zone, dropping about 200 points before rallying into the Close with an eventual 154 point gain.

Read More...

Wednesday, August 08, 2007

 
Technical Indicators

Standard Error Bands

Created by Jon Anderson, Standard Error Bands are two moving averages based on standard error levels above and below the Linear Regression Indicator. As a type of envelope, they are similar in appearance to Bollinger Bands but are calculated and interpreted quite differently. While Bollinger Bands are plotted at standard deviation levels above and below a moving average, Standard Error Bands are plotted at standard error levels above and below the linear regression plot.

Andersen recommends default values of "21" for the number of periods, a 3-day simple moving average for the smoothing, and "2" standard errors. He also notes that very short time frames tend to produce unreliable results.

Because the spacing between Standard Error Bands is based on the Standard Error of the security, when the two bands are close together, it signifies a strong trend. When the two bands are far apart, prices are more volatile and will tend to fluctuate between the two bands. If the bands are close and then begin to widen, it may signify that the trend is weakening and may possibly be due for a reversal...

Read More...

 
Trading Education Tutorial
Courtesy of Nirvana Systems

Moving Averages and the Trend




Moving Averages Help Us Identify Trend Reversals

One of the old axioms of technical analysis is that 'the trend is your friend'. This holds true, as long as you trade in the direction of the trend. However, your 'friend' has two faces, and can turn on you to eliminate profits (and your friendship!). Trend reversals can occur at any time and one of the important skills a trader must possess is the ability to identify a reversal. It is easy to exit a position too early if we over-anticipate a trend reversal, and just as easy to watch our profits evaporate if we are too slow to exit the trade.

Read More...

 
NASDAQ Chart of the Day
Courtesy of Nirvana Systems




PTEN got another nice bounce of the major 21.15 support level, which has held firmly since last Fall. Look for more strength above this level, possibly back toward the 28.00 range.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




MNT got a big breakaway gap through the top of a clear consolidation range on increased volume, which is quite bullish. If the stock can remain above 44.00, we could see much more strength ahead.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

Updated Tuesday, 8/7 for Wednesday's market.

Key DOW Levels for 8/8

UP

Above 13,800

DN

Below 13,300


Volatile Afternoon...

- Dow breaks above 13,500, swings wildly into the Close. The index gained 36 points on the session, but continues to look weak in the longer term picture.

- The NASDAQ and S&P each trended mostly higher today, but each ran into resistance late in the day. Watch resistance closely for signs of more near-term strength or more overall selling.

Summary

The Dow closed the day with a modest gain after experiencing high volatility late in the day. The index continues to hover around the 13,500 level and could continue to push modestly higher. However, the index continues to look weak and a strong break below 13,300 could make for another big wave of selling.

Read More...

Tuesday, August 07, 2007

 

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Trading Education Tutorial

The Big W

Double Bottoms provide visual reference points that map the entire reversal process. Once located, these signposts identify most key price pivots and flash early warning signals when violated. The most common of these, The Big W, begins at the last major high printed by a downtrending stock, just prior to the first bottom. The first bounce after this low creates the center of the W as it retraces between 38% and 62% of that last downward move.

This rally fades and price descends back toward a test of the last bottom low. At this moment the trader listens closely for the first bell to ring. A wide range reversal bar (doji or hammer) may appear close to the low price of the last bottom. Or volume spikes sharply but price does not fail. Better yet, a Turtle Reversal develops where price violates the last low by a few ticks and then prints a sharp move back above support. Should any or all of these events occur, we mark the potential second leg on our Big W. 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.

Read More...

 
NASDAQ Chart of the Day
Courtesy of Nirvana Systems




JCOM got a lot of buying interest back at prior support at 32.00 once again. If this bounce turns out to be a higher low within the highly bullish uptrend, we could see new highs soon.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




LNT has found buyers once again at key support at 35.20, which has held firmly since last Fall. If the stock can remain above this support level, we could see another rise back toward the 45.00 range.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

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

Key DOW Levels for 8/7

UP

Above 13,525

DN

Below 13,150


Steady Reversal...

- Dowreverses from 13,200 support, rallies back toward key resistance with 287 point gain. The index rallied back to within 22 points of the key 13,500 resistance level, which has been quite a 'line in the sand' lately. Watch this zone tomorrow.

- The NASDAQ and S&P each rallied steadily alongside the Dow today, but now have to battle the major upper trend lines that have paced the overall declines. Watch these lines closely for signs of another reversal or a potential new trend.

Summary

The Dow closed the day at the highs of the session and is now holding at the top of the large consolidation range. Watch this range for an eventual breakout, as this pattern could easily spark heavy market participation.

Read More...

Monday, August 06, 2007

 
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.
..

Read More...

 
Trading Ideas & Picks

Weekly Swing Ideas Report for JAugust 6th - August 10th

Stock Picks - Long and Short Potential Swing Candidates ... SwingTracker Scans: Trading Window (BOBJ BUSINESS OBJECTS, KCI KINETIC CONCEPTS INC, NFS NATIONWIDE FINL SVCS INC, BMS BEMIS INC, FOXH FOXHOLLOW TECHNOLOGIES INC), Force Swings, Triangle, Revival, Reversals, Breakouts (ALKS ALKERMES INC, MZZ PROSHARES TR, IEF ISHARES TR), and more...

Trading Ideas - Read More

 
Trading Ideas & Picks

The Weekly Report for August 6th - August 10th - Subprime Problems Continue

The upward diverging moving averages are still suggesting that the longer-term momentum may still be on the side of the bulls. The Rusell's relatively low RSI value is currently suggesting that the index may start to experience some buying pressure as the bulls look to enter at a spot that gives them a favorable risk/reward ratio...

Trading Picks - Read More

 
Daily Stock Picks

Bottoming -

August 3 for August 6:
AGII CBHI CNIC DDDC DUSA GSIT IFUL KONG LDIS PABK PEET PGTI RTSX RUTH


(
Stocks making a 52 WK low but closing higher than they opened)


Oversold Stocks
-

August 3 for August 6:
ACOR CLUB UTEK

(Stocks closing higher than they opened, crossing up through their 25 Stochastic level, and on 150% + greater than average 6 month volume)


Volume Pop
-

August 3 for August 6:
ALVR CLUB EXPE HTCH OIIM


(Volume Pop With High ADX & RSI)


More... Stock Picks Page #1

 
Technical Indicators

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...

 

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Trading Education Tutorial
Courtesy of Nirvana Systems

Fibonacci Retracement Levels





Using Retracement Levels in Your Trading

Fibonacci Retracement Levels are one of the most powerful (and underused) tools available to traders. These measurements are of great use with any market that is reasonably liquid. Many technicians have noted that markets tend to reverse or consolidate once they reach one of these ratio levels (measured from the distance of the previous trends reversal). They can used as entry levels, exit levels and even as a money management tool.

Read More...

 
NASDAQ Chart of the Day
Courtesy of Nirvana Systems




OIIM may have topped out with a volume climax and could fill the potential exhaustion gap soon. These patterns indicate a likely decline from these levels, especially if 13.20 is crossed.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




SYX has formed a potentially bearish pennant consolidation that could offer a big move to the downside. A break through 18.75 could spark heavy selling pressure.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

Updated Friday, 8/3 for Monday's market.

Key DOW Levels for 8/6

UP

Above 13,525

DN

Below 13,150


Heavy Selling...

- Dow sells off heavily from 13,500, drops over 300 points from highs. The index closed the session with a 200 point freefall and is now holding above prior support at 13,150, which is a key level to watch Monday.

- The NASDAQ and S&P each sold off heavily into the afternoon with the S&P actually hitting new lows within the bearish downtrend. Look for more overall selling ahead, especially if the upper trend lines remain intact.

Summary

The Dow ended the day with a heavy decline and continues to honor the 13,500 resistance level, which is quite bearish. Look for continued overall weakness beneath this zone, especially if 13,150 is crossed.

Read More...

 
Technical Indicators

Keltner Channels

Keltner Channels are a volatility-based indicator that uses a pair of values placed as an "envelope" around a data field. The values are calculated by taking the Exponential Moving Average of the data for a given period and adding or subtracting twice the average true range from the moving average.

Envelope theory states that prices will most likely fall within the boundaries of the envelope. If prices drift outside their envelope this may signify a trading opportunity.

Keltner Channels are similar to Bollinger Bands and share many of their characteristics but represent volatility using high and low, rather than the standard deviation of the one field.

Read More...

 
Trading Education Tutorial
Courtesy of Nirvana Systems

Trendlines




Determining Market Reversals and Continuations

Trendlines are perhaps the oldest tools known to chartists. Trendlines form across peaks and valleys called pivot points - relative highs and lows in a chart. As more points form along a line, it becomes more "established". This means that, when the line is broken, it will likely follow through with a strong move in the new direction.

Read More...

 
NASDAQ Chart of the Day
Courtesy of Nirvana Systems




THQI has filled a clear exhaustion gap to the upside via large volume, which could send the stock even higher. Look for more strength from this stock, especially if the clear upper trend line is crossed at 30.25.

Daily Trading Signals

 
NYSE Chart of the Day
Courtesy of Nirvana Systems




TOL has gotten a big upside reversal on increased volume, which could lead to a big volume climax rally. Watch 23.50 for signs that more strength is ahead.

Daily Trading Signals

 
Daily Market Commentary
Courtesy of Nirvana Systems

Updated Thursday, 8/2 for Friday's market.

Key DOW Levels for 8/3

UP

Above 13,525

DN

Below 13,350


Steady Gains...

- Dow trades mostly sideways, rallies into the Close for another solid session. The Dow traded mostly sideways throughout the session today, but was able to hold gains after yesterday's late-day rally, which is moderately bullish. The index actually rallied late in the session yet again today, but ran smack into the heavy 13,500 resistance level, which we will watch closely tomorrow. .

Read More...

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