Technical Analysis of Stock Trends

Flagging the Dow and dead cats?

Posted on Jan 27, 2010 by WHC Bassetti.

Here are the present considerations in analyzing the Dow:  The Dow is supported by two trendlines, both of which are penetrated, but not decisively.  Momentum is decisively down, but as we know momentum can be reversed at any time (see March 6, 2009).

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Big doings in the Dow (and the market)

Posted on Jan 24, 2010 by WHC Bassetti.

3 — 572.25 — 5.33 — 50

Three days.  572.25 points.  5.33%.  Closed below the 50 day low.  50 day.

Technicians who know about systems know about the famous Turtle System, which is a variant of the Donchian high/low breakout system.  In this system, to radically over simplify,  the trader buys on a break of the 20 day high and sells on a break of the 20 day low.

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Banksters are gangsters.

Posted on Jan 23, 2010 by WHC Bassetti.

http://www.marketwatch.com/story/fund-manager-sees-another-crash-in-home-prices-2010-01-19

I wanted to call attention to this article because I thought it had some fundamental facts which I think will affect the market at some point in the future.  But as Forester remarked the timing is difficult.

I think that what we have seen in foreclosures is the tip of the iceberg.  Over the next couple of years we are going to see 3,000,000 houses in trouble, if not on the market and foreclosed.

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F driving off cliff.

Posted on Jan 22, 2010 by WHC Bassetti.

Given the market context we don’t like F breaking the trendline like this so we are taking some profits and lightening our positions in F.  Profits are in the 275 to 300% range.  This does not alter our fundamental view that F will be worth inestimably more in the long run.  It’s just a trading tactic.

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Sell CRIS. EEB not looking good. Stay tuned. Stormy weather today.

Posted on Jan 22, 2010 by WHC Bassetti.

We will be taking some handsome profits in CRIS today.  Some of our students have called this kind of gap “the gap of death”.  And while today’s candlestick might hint at a one day reversal that’s not the way to bet on these extreme gaps.

It is difficult to imagine a long downtrend in EEB, but it is not difficult to imagine being out of it on this chart pattern.

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