Technical Analysis of Stock Trends

True, or not true? Trend, or contrarian rally?

Posted on Oct 14, 2010 by WHC Bassetti.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=0&dy=0&id=p62881197949&a=207879904

Two things are noteworthy about this chart (and the market).  The first is that  May’s high has been taken out.  (A note about that noteworthy occurrence:  Magee thought that important trendlines should be pierced by 3% to be definitive. That’s why we have Basing Points.  And, we don’t  wait for that to increase our positions.  In this case we would hang back and not add on, due to the length of the run without a downwave — 34 days — not to mention inchoate suspicion.  Or maybe paranoia.  GLD is 54 days and SLV is 38.  When they give us money like this we get suspicious.)

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Fat profits goeth before a fall…SPX, FXE, GLD…ETC

Posted on Oct 09, 2010 by WHC Bassetti.

http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=1&mn=0&dy=0&id=p62881197949&a=207879904

The sideways drift in the SPX in late September — and other indices — resulted in the construction of a more reasonable trendline, the last on the chart.  The previous line has been left to illustrate the change.  The Dow, though not illustrated here, is actually more significant, as not only did it take out the psychological 11000 level it took out the important May high.  When the SPX does the same we will have a bullish confirmation.

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Too clever by half…buy signals in the indices and metals

Posted on Oct 06, 2010 by WHC Bassetti.

http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=0&mn=6&dy=0&id=p23550335056&a=203282120

This is a buy signal in gold.  (And the other metals.)  This may be the beginning of a blow-off.  We would move our stops to 3% under yesterday’s low.  Depending on your appetite for risk (or desire for profits) this would be an add on place.

http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=0&mn=6&dy=0&id=p23550335056&a=203282120

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Sold Qs, TBT, pared back $SPX

Posted on Oct 04, 2010 by WHC Bassetti.

http://stockcharts.com/h-sc/ui?s=QQQQ&p=D&yr=0&mn=6&dy=0&id=p39697041562&a=203282119

Today we sold our Qs position as well as our TBT position and scaled out of some of our SPX position.

TBT we didn’t like as the downdraft in bonds (TLT) doesn’t appear to be happening.

The Q move is a trading tactic.  It means we think that a downwave is about to develop.  Same with the SPX.

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Market on tenterhooks. Whatever those are…

Posted on Oct 02, 2010 by WHC Bassetti.

http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=1&mn=0&dy=0&id=p40849239716&a=209481263

Notice how beautifully the top of this range is defined by the top horizontal line.  The bottom is also well defined, but not so beautiful.  Also the tenuous nature of the September trendline is obvious.  In July we had a downwave which gave us an excellent anchor for the uptrendline.  It is absolutely inevitable that this uptrend will retract, and probably soon.  It is now 25 days long.  The longer it lasts the more violent will be the downwave.  The downwave which began in April was a reation to the 56 day upwave.

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