Monday, July 07, 2008


Level the Forex "playing field": Special Time Limited Edition
4-part Forex training begins NOW (and it's 'on the house')
To get your copy, just visit THIS WEB PAGE right now

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.


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.


NASDAQ Chart of the Day
Courtesy of Nirvana Systems

SCHN got a big downside break through a clearly defined lower trend line at 102.00 today, which sparked heavy selling from prior highs at around 115.00. This break through the lower trend line could easily spark much more selling pressure ahead.

Daily Trading Signals

NYSE Chart of the Day
Courtesy of Nirvana Systems

COP has been consolidating at highs after its bullish advance from the March lows. However, the stock looks to be forming a bearish saucer top pattern, which indicates a likely downside break. Watch for weakness through 90.00 for signs of key selling pressure.

Daily Trading Signals

Daily Market Commentary
Courtesy of Nirvana Systems

Updated Thursday, 7/3 for Monday's market.

Key DOW Levels for7/7


Above 11,450


Below 11,150

Still Consolidating....

- The Dow reverses from early lows, builds out within clear consolidation. The index remains within the clear consolidation, which we will continue to watch closely next week.

- The NASDAQ and S&P each remain within their respective consolidation patterns, which we will continue to follow next week.


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.


This page is powered by Blogger. Isn't yours?