Technical Analysis of Stock Trends

Achtung! Don’t go to sleep here!

Posted on Jan 28, 2012 by WHC Bassetti.

There is never any lack of disagreement amongst the punditry.  This is also true for technical analysts.  And for fundamental analysts.  And for analysts of all other stripes (and spots).  That’s why we have horse races and super bowls and the stock markets.  In the chart above we see one of the objects of disagreement — or ammunition for the bear side.  Converging trend lines are the sign of the wedge, which is thought to have bearish implications.  Some pundits are looking at this and calling for a “correction”.  10% is what they are looking for.  Readers will remember our market dictum, that all waves generate their antithesis.  The upwave generates the downwave (or sidewave), and vice versa. So it is good to be alert here for the inevitable reply to this upwave which now counts 27 days.  Be a Boy Scout.  Be Prepared.

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Mind your Es and Qs….

Posted on Jan 05, 2012 by WHC Bassetti.

Impossible to ignore the Qs. Burst out of a big triangle.  Big sideways base. We are buying some.

Also impossible to ignore the downtrend in the euro, which we have remarked on numerous times.  Now another downgap. We are shorting some, using the EUO ETF.  Stops shortly.  Have to rush down to the pit.

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Curse of the vampire trendline — and living dead politics

Posted on Dec 17, 2011 by WHC Bassetti.

Some may say that it is zombie politics cursing the markets, and they would be right.  Not just the living dead politics of Washington, but of Berlin and Paris also in this case.  But the real curse of the markets is the March 09 trendline which, with the cooperation of the brain dead politicians, holds sway over the market.  For all practical purposes most  issues are in sideways trends.  Only idiot savants, traders and cheaters make money in these markets.  Some savants — idiots or not — have been touting the Russell 2000 — and it’s not totally a bad idea to have a piece of it.

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Fool’s gold. Fool’s euro.

Posted on Dec 12, 2011 by WHC Bassetti.

Today the gold market gave a trading short signal, as illustrated by the gap across the short term trendline.  It is always traumatic for those who have adopted (or married) the gold idea.  This is a trading signal.  We have marked long term stops for long term traders.  Remember.  It’s long term traders who win in the end.  Though sometimes the short term can be painful.  We have marked two stop points, one at 153.95 and a truly long term wave stop at 144.93.  If you contemplate the waves here you can see that the true long term stop is the lower one.  Then of course it is always possible to hedge or scale out of some of a position at the higher stop.  We will probably be shorting ourselves.  Has gold made a fool of us in the past?  Please don’t ask.

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Afghan markets…

Posted on Nov 05, 2011 by WHC Bassetti.

We have been reading “The Great Game” (and also “Flashman” comic masterpiece about Afghanistan). These recount the struggle for empire between the Russians and the British in the 19th century. Tales of deceit, treachery, betrayal and brutality.  An apt metaphor for our current markets. We read one account (of the market, not the Great Game) in which the analyst said in sum that everybody with any sense was on the sidelines and it was the flash traders and the hedge funds who were banging each other.  Could be.  Jibes with our observation anyway.

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