Technical Analysis of Stock Trends

Bonds go North. Stocks go South. We go to the Giants game.

Posted on May 17, 2011 by WHC Bassetti.

To start with we don’t like the way things are shaping up here.  A minor trendline just broken in the INDU — in fact two broken, the horizontal and the sloped.  From a trading point of view we are exiting our positions in the indices.  We think investors should begin thinking of hedging.  You can hedge in units, or partially — for example, 1/3, 1/3, 1/3 — or similar.

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Confusion rains. River floods.

Posted on May 15, 2011 by WHC Bassetti.

The Mississippi floods and the punditry leaks just as much wisdom confusion and nonsense — and the markets seem to be listening.  Everybody’s got an opinion — unfortunately.  Big names saying to cut and run now.

What is the market saying?  A down wavelet in an unusual place and an apparent stall in momentum.  What do you do?  Wait for the chart to sort it out.  We have marked the new stop for the SPX –1217.08.

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Cross winds and clear air turbulence continue –

Posted on May 11, 2011 by WHC Bassetti.

We got tired of writing dump-bump-dump… and so we have renamed our little pattern the alpha-beta-gamma–zeta pattern, or abg-z.

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Shorts taking it in the shorts. Pundits too.

Posted on Apr 30, 2011 by WHC Bassetti.

Here is a good picture of where things are really at.  Pundits, talking heads and shorts rejoice each time we get a downwave thinking that THIS IS IT, THE BEGINNING OF THE END!  Not realizing that it’s just a downwave.  This little downwave was about 2.87% in 9 days.  If you’re short and you’re taking comfort in these little waves you will soon be broke, because the bull response to this was a 9 day upwave of 6.11%.

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Spanking shorts–as we were saying…

Posted on Apr 23, 2011 by WHC Bassetti.

If a 190 point day doesn’t make short queasy nothing will.  Let us specify how we feel about shorting.  We love it.  But, dear readers and students, shorting a roaring bull market is foolish in the extreme.  Fighting the trend is for gamblers, not traders.  Sometimes you make a quick hit.  Most of the time you get hit.  Don’t do it.  Wednesday and Thursday were buy signals in the Dow, and stocks in general.  In the Dow the old high was penetrated.  Balance that against the SPX not yet having penetrated.  But after the baying of the pundits (market overbought, market going to tank, market to market to market a fat pig…) seeing the market administer a lesson in black and white, confirming what we have been saying, was refreshing.

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