Technical Analysis of Stock Trends

Mohammed goes to mountain, or manager goes to Buffet

Posted on Feb 26, 2010 by WHC Bassetti.

An amusing story on seekingalpha.com has it that a young lady fund manager named Goldenberg wrote a letter to Warren Buffet about her stocks.  The letter so impressed him that he asked her to lunch — in Omaha.  She duly went and among other things showed him VRX.  Ever curious we looked at the chart. Two years.

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Gold.

Posted on Feb 25, 2010 by WHC Bassetti.

This is not a positive picture, but perhaps not all is lost.  Two lower highs have been made and lower lows.  The Basing Point stop is illustrated, and we would  definitely honor it.  While gold may regain its glory, sitting through extended downwaves is not necessary.  The proper Basing Point is shown with the stop of 100.04.

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4 days up…downwave in INDU

Posted on Feb 25, 2010 by WHC Bassetti.

Most readers are unaware (blessedly) that a species of technical gnome sits in his garret and computes what happens when the market is up 4 (or down 4) days — how much it gains or loses in the next 5 days, the next 10 days, etc, etc.  We don’t have to do that.  We know that after an upwave there will be a downwave.  Market mischief makers will attempt to exacerbate the volatility resulting from these natural market waves.  We will largely ignore them.

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FXE. How to really trade the euro…

Posted on Feb 23, 2010 by WHC Bassetti.

In reality no one could quarrel with our management of the euro trade.  Except ourselves.  We have been spooked three times during this trend and tried to outguess the Basing Point system.  This comes from our dark past of being an FX gambler.

So we thought we should at least show readers how it should have been done, and how it should be done.

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Betwixt and between…INDU wave analysis

Posted on Feb 23, 2010 by WHC Bassetti.

We pointed out (the 11th or 12th Feb) that price was between the bump high and the low.  The bump high has now been taken out which is of course a bull positive.  Now price is again betwixt and between — between the July trendline as support and the August trendline as resistance. Also under the Nov 2007 trendline as resistance.  Nonetheless investors should still be long the indices as the Basing Point stop was not taken out.

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