Technical Analysis of Stock Trends

Putting the Dow in perspective… (Dubai notwithstanding)

Posted on Nov 27, 2009 by WHC Bassetti.

One never knows what falling pebble or snowball will start the avalanche.  The jungle drums say that many big traders are short — and feeling the heat.  And praying fervently for a severe downwave to get them off the hook.  Whether this is the snowball (Snowballs in Dubai?  Christmas presents from Muslims?  Well isn’t there an indoor ski mountain in Dubai?  Could this be a negative indicator?  When tropical hotels start building indoor ski slopes sell them short?  But we digress, enough of cultural and economic analysis…)

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Gold. Gaps. Golly–gee–whiz.

Posted on Nov 24, 2009 by WHC Bassetti.

Stock investors are now looking at something in GLD that futures traders are long familiar with — repeated gaps.  These rarely occur in stocks, but are common in commodity blow-off situations. (See SLV and PGM also.)

Here we have a breakaway gap followed by a power bar (!) followed by two runaway gaps.  Well, obviously there must be some cook book which tells you what to do when this occurs.  Not.

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Surge, drift, flush pattern persists — so far. Don’t snooze off.

Posted on Nov 22, 2009 by WHC Bassetti.

We are now in the drift part of the pattern after a surprising one day surge at the top.  This is better illustrated in the chart below.  At the moment there is no sign of the bear wave traders have been hoping for and fearing ever since March 9.  Illustrating once more that it is better to read the chart than it is to read the news.

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Platinum. Sigh. A mismanaged position.

Posted on Nov 20, 2009 by WHC Bassetti.

Here is an example of a mismanaged position.  We bought platinum in January.  Obvious isn’t it?  Broken downtrend line, clear neckline over a clear bottom.  As can be seen we have handsome profits in the position, made even more handsome by metals going parabolic (sigh, soon to be corrected).

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Short the Euro. Party’s over.

Posted on Nov 20, 2009 by WHC Bassetti.

We just said that to get you riled up.  But…  We think there is a low risk trade in shorting the euro.  The stop is just over the nearest high by 1% or so, or by watching the hourly bars for a breakout and power bars.  This is for aggressive traders only.

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