Technical Analysis of Stock Trends

Dow Up? Dow Down? Dow Turn Around? Also, two way street…

Posted on Sep 24, 2009 by WHC Bassetti.

Readers should be aware that it is a good idea to subscribe to the edwards-magee google group at http://groups.google.com/group/edwards-magee

We frequently post material there and there is an intelligent and alert group of subscribers.

We just posted a letter there open to the public.  This letter may also be found at:

http://www.edwards-magee.com/ggu/dowbottomsep09.pdf

A TWO WAY STREET

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Hot stocks. Ford. AMR. LCC. JBL. MISC.

Posted on Sep 23, 2009 by WHC Bassetti.

You can tell we’ve been looking at the hot stocks, which we do sometimes for amusement, just to check the permutations of human folly.

We bought F back around the bottom because the depths of human folly were being explored and it seemed foolish not to take advantage of it.  Profits on that trade, still open, in the hundreds of percents.

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Buy General Mills? Yawn.

Posted on Sep 23, 2009 by WHC Bassetti.

Ordinarily you look at action like this from yesterday’s hot stocks and you see a buy signal.

A clearly defined horizontal line.  A big breakout.  Clear buy signal.

But then you look at the big picture.

Who wants to commit capital for a possible gain of 6 or 7 points?  In the present economic climate we consider it highly unlikely that GIS could take out its old high and make the trade worthwhile.

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Buy Citibank. Doesn’t mean you can’t hate banks. Just a trade…

Posted on Sep 22, 2009 by WHC Bassetti.

According to our virtual poll (two participants — ourselves and our evil twin Karnak) Banks rate right up there with politicians and cancer on the hate list.  On the rape pillage and plunder index they compete with Attila the Hun.  We think they should be muzzled like dogs with rabies. And their pay packages should be rigorously controlled.  Their bonuses are an insult and an injury to stockholders and the public.

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Putting our money where our mouth is….

Posted on Sep 21, 2009 by WHC Bassetti.

This may appear suicidal, but we took very light positions in the Qs and the DIA.  We teach our students that the least risky time to join a trend is when it has some momentum.  Now we will see how our own medicine tastes.

The trade would have been better made when the high of August was taken out.  We’ll use a money management stop here — 5%.

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