Technical Analysis of Stock Trends

A new chart technology…

Posted on Jul 20, 2010 by WHC Bassetti.

Bear with us (did we say b***?!)  just a minute while we try to improve the charts.

This week may tell us whether we have a containable downwave, or the beginnings of a serious downtrend.  We now have 5 days on the latest downwavelet and we are waiting to see if the July low will be taken out.  The short Basing Points are marked for anyone who is short.  Generally we use a 3% filter to set the stop above short Basing Points.

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More violence than The Girl Who Played with Fire…

Posted on Jul 17, 2010 by WHC Bassetti.

Yesterday we pointed out that the upwave had ended and today the market wreaked vengeance on any traders who ignored that trendline.    It is entirely possible that we will see a violent downwave here, and if you are trading you should have used yesterday’s power bar to get short, and the hourly chart to protect yourself.  As they say, never a dull moment.  The market mischief makers move the market so fast on the opening that you’ve been had before your get your eyes open or your first cup of coffee.  They make up for it blowing it away on the close.  What we ought to have is a 24 hour market so they couldn’t mess with it like this.  In case you haven’t heard they are planning that.  They are going to implement it right after they install the Congress that hasn’t been bought and paid for.

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This upwave broken at 7 days.

Posted on Jul 15, 2010 by WHC Bassetti.

In this thirty minute chart the upwave is shown either pausing or ending.  Our last letter pointed out the violent cross currents and changes of direction — eight in 53 days — now, probably nine.  If you are trading you must be on this rhythm (as analyzed in detail in the last letter).   It is expected that this wave would be sputtering here — either to give a trendline anchor, or to reverse and test the previous low.  Notice that the wave is at the downtrend line which must be broken to create a positive bullish tone.

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Double crossed and death crossed. And Dow Theory crossed.

Posted on Jul 09, 2010 by WHC Bassetti.

Considering the number of short term trend changes we have seen lately, including the close below our stop investors could be excused for feeling double crossed.  Then, on top of that the fabled and feared death cross has occurred.  The “death cross” is illustrated above and occurs when the 50 day moving average crosses under the 200 day moving average.  Many analysts interpret this as a death sign for the bull market.

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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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