Technical Analysis of Stock Trends

Head faked in the euro…

Posted on Feb 18, 2010 by WHC Bassetti.

Six days ago we thought we saw the euro (FXE) turn.  Now we’re selling our position.  Why Prof, Why?  Oh, we don’t know.  Just don’t like it — just kidding.  There is an analysis.  The gap day six days ago turned into a spinning top (don’t worry about the term, just look at the picture) instead of a power bar.  Then that surge up was canceled by the next three days.  Ah, but a sign of hope the 5th day — what looked like a power bar.  Then that was canceled by yesterday and today.  We were willing to stick with it till it broke the low, but now we think you’re either short or out.  Systems wise short is still the indicated trade. For our personal accounts we’re sideways.

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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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