Technical Analysis of Stock Trends

Analyzing IEDs.

Posted on Jun 30, 2010 by WHC Bassetti.

The market is certainly spooked.  Could have something to do with the full moon.  Or fear of Greeks selling bearer bonds.  Whatever it is it’s like a roadside bomb.  In looking for bottoms on a short term basis we can go to hourly data to look for hints of the possible future direction.  What we see in the hourly chart of the Dow looks like a bottom forming, and even has a breakout across significant trendlines.  But then it turns and returns to the congestion pattern.

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Chart hints in the Dow and the S&P

Posted on Jun 27, 2010 by WHC Bassetti.

Here is a chart posted by one of our bright graduate students at Golden Gate University.  It is a weekly chart of the S&P.  Readers will remember that weekly bars are used for very long term trading systems, and we used a weekly system in our study of the Dow (Sacred Chckens, the Holy Grail and Dow Theory).  The student is speculating and is aware of it.  He has correctly identified a candidate Basing Point  (short) in the SPX.  While it is not impossible that the formation is a bear flag (and time will tell) we still prefer to look at it as a bottom of the down wave.  It may also be a rally or upwave against the downwave started April 26.  The next chart down may give us a hint as to the next development.

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Dumpity, bumpity, dumptity…

Posted on Jun 22, 2010 by WHC Bassetti.

These are times of high anxiety for investors who lack a compass and a barometer.  If you have no instruments how do you know what to do in a storm — which is what we are in at the moment.

On the other hand if you have a method for analyzing the market which sets out clear signposts you can watch the snakes bite each other to death with some (if not a lot) equanimity.

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Fool’s gold. Chinese stocks.

Posted on Jun 21, 2010 by WHC Bassetti.

Charts like this inflict us with incredible ennui.  It looks like a breakout, with a gap and volume and the breakout bar is a black candle that might be interpreted as a reversal day.  Spare us the grief.  But, like Charlies Brown and the football we say, OK do it to us and we buy it.  We do this because we can always sell it if it turns out to be fool’s gold.  Which it may.  We really don’t think that a major breakout is occurring, but you have to have some consistency in your trading, and that requires us to take the signal.

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Taking gas.

Posted on Jun 17, 2010 by WHC Bassetti.

Talk about Lucy and Charlie Brown and the football.  We have been burned several times in UNG gas.  Once more up to the breech good friends.

Looks like it finally broke out of a base and is a buy.

The stop is 2% under the low of last week.

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