Archive for July, 2010
Power bar off the bottom.
Posted on Jul 07, 2010 by WHC Bassetti.
In market conditions like we have experienced the last thirty or so trading days you must be prepared to change your trading posture according to the situation right now. Today the market powered up in move that must be respected. The letter we wrote earlier today is still good advice and is worth being followed by prudent investors.
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Dead cat bounces and the true state of the market.
Posted on Jul 07, 2010 by WHC Bassetti.
Tuesday didn’t furnish much of a bounce, but as this is written Wednesday one could think — well, maybe this is over. And maybe this downwave is over, but what is not over is the general state of the market. Which is in a trading mode. And the trading mode is within a downtrend. During times like these investing and trend following can be very frustrating.
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Stops tripped. Time to hedge or exit.
Posted on Jul 03, 2010 by WHC Bassetti.
The most destructive habit — or decision, or characteristic or event or test of character– in the markets is to contemplate a stop long set, and to reconsider it. Actually it’s ok to reconsider it, but it’s not ok to decline it. Only if it were set in error should it be negated. Error means a glaring error in procedure, or in computation. The present stop is a valid stop. Those who ignore it will end up like the owners of Enron. The stop at 9729 is violated.
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Stops. And esoteric technical arcana…
Posted on Jul 02, 2010 by WHC Bassetti.
Email pours in from friends, students, readers, colleagues. How did the market know where your stop was (9729) and know to stop just above the stop. (Stop us if you’ve heard this one.) Do we like this stop? No. We set it back in December from a congestion pattern. We actually think it should be set using a Basing Point from February, which we have illustrated here with the lower horizontal line of 9408.88. In fact that is the stop that is generated by the weekly Basing Point system.
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Noted technical analyst WHC Bassetti has over 40 years' experience in the financial markets and is Malcom S.M. Watts III Adjunct Professor of Finance and Economics at Golden Gate University. He is editor of the Ninth Edition of Technical Analysis of Stock Trends, widely considered to be one of the true classics of market analysis.
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