Technical Analysis of Stock Trends

Whatever sticks to the wall. logi, flex, sndk, brcd, ca, etcetc

Posted on Apr 14, 2009 by WHC Bassetti.

There is a group of beaten down tech stocks which might be worth a look.  What you do is buy some of all of them, set a carefully considered stop, increase commitments in the ones which work and let the stop kill those which don’t.  Above some we just looked at.  More to come.  FLEX looks like it generated a power bar here.

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Mind your p’s and QQQQs (and a lot of other stuff)

Posted on Apr 10, 2009 by WHC Bassetti.

The QQQQs appear to have broken out of a rather long double bottom.  There are a lot of considerations and opinions and emotions flying around about the market — but it’s the chart that rules.  And this is a buy signal.  Everybody knows we think this business (the rally) is a bull trap.  But what if it’s not?  Besides if it is we have a way of dealing with it.  It’s called stops and getting off failed experiments.Beautiful neckline.  Gap up on approach.  Pull back.  Gap up.  Simple.

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Seeing bunnies (Easter) in the clouds…

Posted on Apr 09, 2009 by WHC Bassetti.

We often admonish our graduate students not to over interpret or pre-interpret patterns in the market.  We tell them to beware of seeing bunnies (or other phantasma) in the clouds.  Keep it simple and allow the patterns to manifest themselves.  They will.  But it’s so much fun trying to guess what’s in the Easter Bunny’s basket!  Remember –as Nils Bohr said prediction is all right if you don’t take it seriously.   Eager bulls have been trying to find a bottom in these markets for months.  Back in December we posted the SPX chart on a chat group we belong to.  The members had been muttering restlessly that a head and shoulders (Kilroy) bottom was present or would be shortly.  We pointed out that the right side recovery had not reached significance (marked on chart).  We find ourselves at somewhat the same position at present.  Some of our readers are seeing a KB H&S setting up here from January to present.  This is possible but still unresolved.  It is also possible that the recent low is the nose (head) and that a massive bottom is being formed.  The left hand and nose are already present.  It seems to us that this is the more likely scenario because this would put a recovery months down the road.  That seems more in line with economic fundamentals and the lamentable state of the economy.  

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Golden thoughts

Posted on Apr 07, 2009 by WHC Bassetti.

Yesterday we bailed on our gold and silver positions (personally).  A little more exposition on our reasoning is in order.  There was a stop generated from a new high which was already violated.  The nearby low was taken out.  The volume on the two downgap days was relatively larger.  The news that the IMF was going to seel 400 tons of gold was hanging over the market.  On the other hand the downwave from the top set a Basing Point from which we could calculate a trend following stop –which incidentally has not been hit yet.  We see a pattern of surges in the gold prices followed by extreme sell offs.  This would incline one to use a buy strength, sell strength tactic.  Readers must make their own decisions as to whether adapt the relaxed trading rhythm (almost always a good strategy in the long run) or try to  avoid some of the equity downside brought by this waterfall retracements.  Basing Point and stop shown on chart below.

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Abandon gold all ye who enter here.

Posted on Apr 06, 2009 by WHC Bassetti.

We are tossing our gold and silver positions.  We don’t think the party is over, but the momentum is down for right now, and why take paper losses?  Today has sent definite sell signals, so we’re not waiting for stops generated from Basing Points.

We don’t have any doubt about this trade.  We’ll lay back and wait for the downtrend to end.

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