Donut Shop

[xe2dy]

All about 'Monoline'...

http://www.tickerforum.org/cgi-ticker/akcs-www?post=24778

[xe2dy]

A few monthly charts with borrowed format from 'Teaparty'. Of note is the MACDH lower column. I remember reading a note a long time ago by 'Mystifier' that the column size represents strength of either bulls or bears.

The China market's parabolic curve is enticing to say the least. Watching for an opportunity to go long FXP.

I added Oil, Gold and Dollar charts as there is chance that a Global recession could put pressure on commodities. Watching for an opportunity to go long DUG.

[xe2dy]

A few TA notes by 'selecto' at TT

1. The BB centerline (20 ma) has turned for down. These turns tend to run.
2. The upper band is flaring away opposite the direction of price whilst the lower band is yielding. This is a continuation signal until we loose the upper flare.
3. The Mac cross for down shows no histogram warning of a pause.
4. There is a scholastic “sell” signal. There is an OBV “sell” signal.
5. Volatility has not reached the level of previous lows, and shows no warnings of leg reversal. In fact the VIX chart itself is somewhat bullish. Mac, for instance, has crossed for up below the 0 line.



http://www.traders-talk.com/mb2/index.php?showtopic=81964

[xe2dy]

Several Great Charts by Teaparty...

http://www.traders-talk.com/mb2/index.php?automodule=blog&req=showblog&blogid=30&st

[xe2dy]

Chart style th'ks to RD

This RSI 2 system says to short when RSI tops 90 AND the index is below the 200.

[xe2dy]

A great thread on TT ...

http://www.traders-talk.com/mb2/index.php?showtopic=81080&st=0

[xe2dy]

A few monthly charts...

[xe2dy]

Brought Tea's excellent dollar + chart closer to the top.

[xe2dy]

Now and then...




where the 55 sma turned down.



Thanks to IYB for keeping the above chart alive.

[xe2dy]

$SSEC Th'ks to Ms Trend Signals...



Thought I'd add a little too...note the dates.

[xe2dy]

IYB's SPX cycle


>

[xe2dy]

Futures (2) + World Indices + Commodity Futures

Futures

http://www.cme.com/dta/del/globex.html

http://money.cnn.com/markets/afterhours/

--------------------------------------------------------------

World Indices ~ updates every 60sec.
Watch the dates! top click for US Market just above Japan

http://www.wwfn.com/commentary/oscharts.html

http://www.allstocks.com/markets/World_Charts/Asian_Stock_Markets/asian_stock_markets.html

World heat map

http://www.financemaps.com/map/day

--------------------------------------------------------------

Commodity Futures

http://sites.barchart.com/pl/pearce/default.asp?code=XPEARCE§ion=energies

[xe2dy]

Econ #'s

http://www.briefing.com/Silver/Calendars/EconomicCalendar.htm

http://cbs.marketwatch.com/tools/marketsummary/calendars/economic.asp?x=0&siteid=mktw

http://cbs.marketwatch.com/news/economy/economic_calendar.asp?siteid=mktw

http://www.nasdaq.com/asp/econodayframe.asp?page=http://www.nasdaq.com/econoday/index.html

http://biz.yahoo.com/c/e.html

[xe2dy]

ARM reset chart, need to click chart button at Colorado_trader's post (3rd post down).

http://www.tickerforum.org/cgi-ticker/akcs-www?post=12404

[xe2dy]

Great long term chart of the DOW

[xe2dy]

Earnings Calendars

You can change the date or pick a ticker on most of these

Thanks to chichi2,

QUIK summary of Biggies EPS Forecast for this Wk.
http://www.theonlineinvestor.com/earnings_calendar.phtml

QUIK summary of TODAY WHEN (Before or After close)
also can pick a day, or pick a ticker
or Hear info
http://moneycentral.msn.com/investor/market/earncalendar/

QUIK summary of TODAY WHEN (Before or After close)
includes EPS Forecast
also can pick a day, or pick a ticker
or Hear info
http://biz.yahoo.com/research/earncal/today.html

QUIK summary of TODAY WHEN (Before or After close)
includes EPS Forecast
also can pick a day, or pick a ticker
or Hear info
http://thestreet.ccbn.com/earning.asp?client=thestreet

[frenchee]

Eddy,

Your helped worked great...thanks

[xe2dy]

I got those charts here http://www.tickerforum.org/cgi-ticker/akcs-www

Try registering for free and then click the charts in my last post, maybe that will work. I couldn't find the post where I got the charts. Basically, they show that auto sales peaked along with the housing market in 2005.

Also there is some interesting TA videos that are presented once or twice a day. Click the 'Ticks' button and/or read the detailed market commentary at 'The Market Ticker'. I'm just taking them with a grain of salt and not trading to them. But the guy that puts them on is rather entertaining to say the least.

I'm now holding a new 50% position in QID taken Tuesday and today.

Hope this helps,

ED

[frenchee]

Ed,

I'm seeing red X for your graphics.

[xe2dy]

New home sales and recessions chart
Auto sales chart, note both peaked in '05.

[xe2dy]

Monitor These Charts Weekly if You Want to Get an Early Warning of Problems Ahead.
Gary North (Click chart buttons near bottom of page)

http://www.garynorth.com/public/department29.cfm

The Yield Curve: The Best Recession Forecasting Tool
Gary North

http://www.garynorth.com/public/department81.cfm

Monitor This Price Index Every Month to See Where the Economy Is Headed.
Gary North

http://www.garynorth.com/public/department83.cfm

Reference

http://www.lewrockwell.com/north/north568.html

[xe2dy]

TICK & TRIN with Bull/Bear Criteria

URL gives NAS,SPX,Trins,Ticks

http://www.marketswing.com/realtime.htm





Th'ks to chichi2

================================
TRIN readings, Bull or Bear?
Save this someplace,
These are Chi2's best criteria for TRIN's, for-Free.

DEFINITIONS AND EXAMPLES
------------------------
E is NYSE
TRINQ is NASDAQ
TRINE< 0.70 means if NYSE TRIN is less than 0.70
0.80<Q<1.00 means if NASDAQ TRIN is greater than 0.80 and less than 1.00
============================================================


Arms Index=TRIN NYSE NASDAQ
--------------- ---- ------
Bull E<0.70 Q<0.80
Neutral 0.70<E<0.90 0.80<Q<1.00
Near Bear 0.90<E<1.00 1.00<Q<1.10
Bear 1.00<E 1.10<Q
Very Bearish 2.00<E 2.00<Q


===================================================
Wait until 30 min into Mrkts before using.
Review 5min interval chart & slope of their trends.
===================================================
http://www.marketswing.com/realtime.htm

"target="_blank"http://investorshub.advfn.com/boards/read_msg.asp?message_id=22104475

[xe2dy]

Chart Patterns

http://www.breakpointtrades.net/Education/HomeEd.html

Candles

http://www.marketswing.com/candles.htm

[xe2dy]

Link to a web site addressing the housing issues.

California Housing Forecast

http://www.californiahousingforecast.com/

[xe2dy]

No bro, I'm day trading QLD or QID to a 10 minute candle chart with standard 20, 2 bolinger bands. Set the chart up for a one month period and look for support / resistance horizontal lines, draw tangents on tops and bottoms. As long as I see higher lows I'll keep the position.

I have a current position on QID bought at 42.60 The market is too indecisive at the moment to take a long position either way. JMHO

Got to go, back on swing shift. Can't quit the night job...yet.

[euterpe1]

XE, why don't you see them cutting. I assume you are long until mid month then and short at mid month. Thanks for the great NASI chart.

[xe2dy]

I have found another interesting message board. If you register for free and click 'Ticks' there are daily videos that describe TA for the S&P 500 along with comments.

http://www.tickerforum.org/cgi-ticker/akcs-www

Check out the 'Breaking News' board.

FWIW, I am currently flat and day trading QLD. I do not see the FED changing the overnight funds rate on Sept 18th and will be ready to re-establish short positions.

[xe2dy]

10 Year Rate th'ks to chichi2

[xe2dy]

The Day Trader's Toolkit th'ks to Rogerdodger

http://www.forexblog.org/2007/08/the-day-traders.html

[xe2dy]

CBOE Options



If the RED MA crosses the BLACK Mid Bolli to the Up Side we Exit any Longs and Enter-Short on Low CPC days... those days that drop the CPC low or below the lower Bolli.

[xe2dy]

USD th'ks to Mr Teaparty

[xe2dy]

Fine BKX charts th'ks to spielchekr

[xe2dy]

H-Map

Click Msg 169 for map.

[xe2dy]

It's hard to be bearish with these TA indicators showing a bottom.

http://www.screencast.com/users/LeavittBrothers/folders/Default/media/9f90634b-cab7-4077-878b-e3fbe6...

[xe2dy]

FPJ,

At this point, the charts look long term bullish and the NASI is at it's lower support where a bounce could happen. I posted the chart to keep an eye on Teaparty's 34 EMA.

China holding 900 bn dollars of US debt along with the Subprime issue have me in a bearish mode at the moment.

[frenchee]

Ed,

What's your intrepretation to Tea's charts?

[xe2dy]

Monthly NDX related th'ks to Mr. Teaparty

[euterpe1]

Frenchee, what is to say that the Force Index doesn't take the shape of last May, June and July. I am hoping for a bounce so I can reopen my SRPIX position, the carnage has finally begun and I am afraid there is going to be lot more bad news out of the financial sector.

[frenchee]

Hello Ed,

Most of the indicators do look bearish. There's one exception. Check out the Force Index as it's oversold and downward "mo" is starting to turn. We are close to a short-term bottom IMO.

[xe2dy]

Indicators look bearish on this one...



Th'ks to Teaparty for sharing the above chart.

[xe2dy]

IYB's SPX cycle

[xe2dy]

Monthly Chart(s) th'ks to Mr Teaparty

[xe2dy]

Pivot Points and Daily Support and Resistance

TraderTalk Technical Tutorial


Markets, no matter in what they deal, exist to facilitate trade, nothing more, nothing less. As such prices will continually fluctuate between supply and demand to enhance the exchange process. The market abhors a stand off, it cannot exist in a state of paralysis. So market traders will constantly adjust bid and ask prices to keep the exchange going - a combination of a traditional auction to seek top prices, then switching to a Dutch auction to explore for a price bottom.

As prices continually rotate to enhance trading, prices of perceived value (support) and perceived over valuation (resistance) can be recognized by the volume of activity at different price levels. This is the basis of Market ProfileTM (MP) analysis. Distinct patterns of volume and price behaviour can be recognized using MP profiles.

MP illustrates that the majority of trading in a day is by floor traders or "locals" as they are called. These locals constantly take prices up and down to very short term levels of support and resistance, exploring the narrow limits of price/valuation tolerance. Trading for the day will persist between this narrow range unless "outside" buyers and sellers are attracted to the price changes that occur. If the narrow range of support or resistance established by the floor traders can be wrestled from them, then off floor short term traders will be attracted and enter the market, as buyers if short term resistance is overcome or as sellers if short term support is violated. These breakout points then usually reverse their function and serve as test points, i.e. previous resistance becomes support and previous support becomes resistance.

Now the active range of trading expands as the off floor traders enter the fray. If more longer established support and resistance can be successfully breached during the new short term trend that emerges, with the activity of the off floor traders, then longer term traders, position traders, with an intermediate or long term intention of their market commitment will be attracted to join the market.

If one knew the range parameters of support and resistance used by floor traders one would have a handle on the significant areas where off floor and possibly position traders may take over the market direction from the rotating locals. Well the locals calculate from the previous day's range the pivotal or inflexion price and the areas of support and resistance. The calculations are very simple and the results invariably have an influence on the market activity of the day. In fact, if no other information that relates to the market becomes available then the locals' parameters may dominate the day.

The calculation for the new day are calculated from the High (H), low (L) and close (C) of the previous day.

* Pivot point = P = (H + L + C)/3

* First area of resistance = R1 = 2P - L
* First area of support = S1 = 2P - H
* Second area of resistance = R2 = (P -S1) + R1
* Second area of support = S2 = P - (R2 - S1)

Pivot Trading Level Formulas:



GPP = (Previous High + Previous Low +Open) / 3
GR1 = 2*GPP - Previous Low
GR2 = GPP + (Previous High - Previous Low)
GR3 = 2*GPP + (Previous High - 2*(Previous Low))
GS1 = 2*GPP - Previous High
GS2 = PP - (Previous High - Previous Low)
GS3 = 2*GPP - (2*Previous High - Previous Low)
GS0.5 = (GPP + GS1) / 2 GR0.5 = (GPP + GR1) / 2
GS1.5 = (GS1 + GS2) / 2 GR1.5 = (GR1 + GR2) / 2
GS2.5 = (GS2 + GS3) / 2 GR2.5 = (GR2 + GR3) / 2


So unless significant market news has been made available between yesterday's close and today's opening you can expect locals to take prices to test the near term support and resistance and the pivot price. Should, for any reason, these near term support and resistance areas fail then the second such area will likely be tested. If these support or resistance areas fail, because of market influencing news or observations, the off floor or, more particularly, intermediate term positional players will likely enter the market and make the market trend.

So these floor trader pivot points are areas to be aware of and respect. They are both dangerous and areas of opportunity. Stop orders to enter at these points are readily whipsawed by 'floor sweeping' by the locals as they rotate up and down the perceived range. On the other hand, if you find support or resistance was forthcoming as appropriate it offers a low risk entry point with a close Stop loss point identified. On the other hand, failure of anticipated support and resistance, as appropriate, offers a low risk entry point with a close Stop loss point identified in what is likely to be a trend emerging from the 'local' noise of the market.

Even if you are not a day trader, knowing the key pivot, support and resistance points can help the short term off floor and intermediate positional trader to identify potential entry points and stop loss levels for your trade if your other criteria have determined the direction in which you should be trading.

Make it a daily ritual, calculate the pivot point and the areas of support and resistance after the close each day for the markets you are interested in. Study the next day's price action in the context of those pivot points so that you get familiar with the dynamics of the market.

Remember above all markets exist to facilitate trade!

[xe2dy]

Words of Wisdom by Mr. Ted Burge

"It is important to recognize that buying at resistance is often a poor strategy. It is equally a poor strategy to sell at support."
"There is an old addage that says buyers run out of cash, but sellers come back to buy."
"I have emphasized Bullish Percents as an indication of strength because when well in excess of 70% of the stocks trading in any major index are on buy signals, it is premature to anticipate a preciptious fall."
"Bullish Percents are an important component of support and resistance, and when they are breached, we apply the same principles."
"We have emphasized and I trust demonstrated that establishing targets of support and resistance using candles and PnF charts and Bullish Percents have provided a disciplined, objective and accurate guide with respect to market activity."
"If the markets move up we will buy at support, if not we will sell or place a stop at a comfort level for risk. We do not have to be bullish or bearish, we must be informed."
"Avoid predictions and opinion. They are dangerous. If you don't listen to charts, you don't need them."
"For newer readers please understand. We buy at support and not at resistance. Wait for a pullback it happens all the time."
"For newer readers please understand. We buy at support and not at resistance and make sure there is room for the price to move. Wait for a pullback it happens all the time, just look at the charts. When there is a profit protect it with a stop. Do not confuse buying at support to mean the next highest target. We buy at the next level of support that is lower. There is an assumption that selling (stop) at resistance means you have a profit, and buying at support means a lower level than you sold."
"THE MONTHLY CHART TO FIND IT, THE DAILY CHART TO SEE IT AND THE 10 MINUTE CHART TO TRADE IT. If you learn to do this, my time will have been worthwhile. "

[xe2dy]

40 BITS OF TRADING WISDOM
Thanks to one 'capitulation' a fine poster on the 'Fearless Forecasters' board.

One of the common themes thoughout the "40 Bits" series of posts is keeping your emotions in check. If your
goal is to become a successful trader then you must learn how to stay calm and make rational decisions
about your trades to protect your account at all costs.

BIT #01 If you want to stay in this business, leave "hope" at the door and stick to your stops."

BIT #02 When you get into a trade, start looking for signs right away that you are wrong. If you see them, then
get out before your stop is hit.

BIT #03 Trading should be boring, like factory work. If there is one guarantee in trading, it is that "thrill seekers"
get their accounts grinded into nothing.

BIT #04 It helps to just follow a handful of stocks on any given day. Don’t jump on the “next hot thing.” Develop
your plan and stick to your plan.

BIT #05 "You are trading other traders, not the actual stock. You have to be aware of the psychology and
emotions behind trading."

BIT #06 Be very aware of your own emotions. Irrational behavior is every trader's downfall. If you are yelling at
your computer screen, imploring your stocks to move in your direction, you have to ask yourself, "Is
this rational?" Ease in. Ease out. Keep your stops. No yelling.

BIT #07 "Watch yourself if you get too excited—excitement increases risk because it clouds judgment."

BIT #08 "Don’t overtrade—be patient and wait for 3-5 good trades."

BIT #09 If you come into trading with the idea of making “big money,” you are doomed. This mindset is
responsible for most accounts being blown out.

Bit #10 Don’t focus on the money. Focus on executing trades well. If you are getting in and out of trades
rationally, the money will take care of itself.

BIT #11 If you focus on the money, you will start to impose your will upon the market in order to meet your
financial needs. There is only one outcome to this scenario: you will hand over all of your money to
traders who are focused on protecting their risk and letting their winners run.

BIT #12 The best way to minimize risk is to not trade. This is especially true during the low-volume “chop
and slop” found during the afternoon trading session. If your stocks are not acting right, then don't
trade them. Just sit and watch them and try to learn something. By doing this you are being pro-
active in reducing your risk and protecting your capital.

Bit #13 There is no need to trade 5 days per week. Trade 4 days per week and you will be sharper during
the actual time you are trading.

Bit #14 Refuse to damage your capital. This means sticking to your stops and sometimes staying out
of the market.

Bit #15 Stay relaxed. Place a trade and set a stop. If you get stopped out, who really cares? You are doing
your job. You are actively protecting your capital. Professional traders actively take small losses.
Amateurs resort to hope and sometimes prayer to save their trade. In life, hope is a powerful and
positive thing. In executing a trade, hope is a virus that can infect and destroy.

Bit #16 Be right on day one or get out. Don’t take a “red” position home overnight.

Bit #17 Keep winners as long as they are moving your way. Let the market take you out on a trailed stop.

Bit #18 Money management is the secret to success. Don’t overweight your trades. The more you overweight
a trade, the more “hope” comes into play when it goes against you. Hope is to trading as acid is to
skin. The longer you leave it in place, the more painful the outcome will be.


Bit #19 There is no logical reason to hesitate in taking a stop. Re-entry is only a commission away.

Bit #20 Professional traders take losses. Being wrong and not taking a loss does damage to your
equity and your mind.

Bit #21 Once you take a loss you forget about the trade and move on anyway. Especially if it is a small one.
Do yourself a favor and take advantage of any opportunity to clear your head by taking a small loss.

Bit #22 Never let one position go against you by more than 2% of your account equity. The larger the position,
the tighter the stop.

Bit #23 Use daily charts to get an idea of the 30-day trend, hourly charts to get an idea of the 1-day
trend, and 5 minute charts to establish your entry points.

Bit #24 If you are hesitating to take a position, that indicates a lack of confidence that is not necessary. Just
get into the position and place a stop. Traders lose money in positions everyday. Keep them small.
The confidence you need is not in whether or not you are right, the confidence you need is in knowing
you will stick to your stop no matter what. Therefore you can actually alleviate this hesitancy to “pull the
trigger” by continually sticking to your stops and reinforcing this behavior.

Bit #25 Averaging down on a position is like a sinking ship deliberately taking on more water.

Bit #26 Build up to a full position as it goes your way.

Bit #27 Adrenaline is a sign that your ego and your emotions have reached a point where they are clouding
your judgment. Realize this and immediately tighten your stop considerably to preserve profits or exit
your position.

Bit #28 Look for opportunities not to trade.

Bit #29 Most of the time, you want to own the stock before it breaks out, then sell it to the momentum players
after it breaks out. If you buy breakouts, realize that professional traders are handing off their positions to
you in order to test the strength of the trend. They will typically buy it back below the breakout point—
which is typically where you will set your stop when you buy a breakout. Greed comes into play when the
stock breaks out again, and the momentum players are forced to chase it and “pay up” for the stock. Be
aware of how trends are established and use that to your advantage to enter and exit positions.

Bit #30 Embracing your opinion leads to financial ruin. When you find yourself rationalizing or justifying a
decline by saying things like, “They are just shaking out weak hands here,” or “The market makers are
just dropping the bid here,” then you are embracing your opinion. Don’t hang onto a loser. Cut your
losses. You can always get back in.

Bit #31 Unfortunately, discipline is typically not learned until you have wiped out a trading account. Until you
have wiped out an account, you typically think it cannot happen to you. It is precisely that attitude
that makes you hold onto losers and rationalize them all the way into the ground.

Bit #32 Siphoning out your trading profits each month and sticking them in a money market account is a good
practice. This action helps to focus your attitude that this is a business, and your business should
generate profits on a monthly basis.

Bit #33 "Professional traders only place a small portion of their assets into 1 position. Or if they take on a large
position, then they strictly limit their risk to 1-2% of their current equity. Amateurs typically place a large
portion of their assets into 1 position, and they give it "room to move" in case they are actually right.
This type of situation creates emotions that ruin accounts, while professionals are able to make
decisions and cut losses because they strictly define their risk."

Bit #34 "Professional traders focus on limiting risk and protecting capital. Amateur traders focus on how much
money they can make on each trade. Professionals always take money away from amateurs."

Bit #35 In the stock market, heroes get crushed. Averaging down on a losing position is a “heroic move.” The
stock market is not about blind courage. It is about finesse. Don't be a hero.

Bit #36 Sadly, traders never learn the importance of “the rules” until they have blown their account out of the
water. Until you “lose it all” it never seems that important to have to follow the basics of professional
trading. (Cut your losses, let your profits run, etc).

Bit #37 The market reinforces bad habits. If early on you held onto a loser that went against you by 20%, and
you were able to get out for breakeven, you are doomed. The market has reinforced a bad habit. The
next time you let a stock go against you by 20%, you will hang on because you have been taught that
you can get out for breakeven if you are just patient and hang on long enough. It doesn’t matter if the
stock has just been upgraded or had a favorable write up in Forbes. You still need to protect your capital.
In reality, today’s price is the true indication of the value of the stock, as it is the price people are willing
to pay. Instead of rationalizing, control your risk by sticking to your stops.

Bit #38 The true mark of an amateur trader who is never going to make it in this business is one who continually
blames everything but his or herself for the outcome of a bad trade. This includes, but is not limited to,
saying things like:

• The analysts are crooks,
• The market makers were fishing for stops.
• I was on the phone and it collapsed on me.
• My neighbor gave me a bad tip.
• The message boards caused this one to pump and dump.
• The specialists are playing games.

The mark of a professional, however, sounds like this:

• It is my fault because I traded this position too large for my account size.
• It is my fault because I didn’t stick to my own risk parameters.
• It is my fault because I really don’t know how to trade.
• It is my fault because I know the market makers can legally take some of my money, and I knew that
going into this.
• It is my fault because I know there are risks in trading, and I didn’t fully comprehend them when I took
this trade.

The obvious difference here is accountability. For amateurs, everything having to do with the market is
“outside their control.” That is not reasonable thinking, and really just points to an individual who has,
probably for the first time, had to confront their “real self” as opposed to the perfect self or the idealized
self they have constructed in their mind. This is also known as “living in a fog.” A person can drift around
through life in their own private world, where they are pretty special and can do no wrong. Unfortunately,
trading rips off this mask, because you cannot dispute what has happened to your account. This is also
known as “confronting reality.” For many people, when they start trading they are suddenly confronting
reality for the first time in their lives. Just to see the world as it really is requires a lifetime of training, and
for many people trading the stock market is their first real step in this journey. Some people say that
traders are born, not made. Not so. If you choose to see the world as it is, then you can start trading
successfully tomorrow.

Bit #39 Amateur traders always think, “How much money can I make on this trade!” Professional traders always
think, “How much money can I lose on this trade?” The trader who controls his or her risk takes money
from the trader whose head is in the clouds.

CONTROL YOUR RISK

Bit #40 Focus on controlling risk...

At some point traders realize that no one can tell you exactly what is going to happen next in the market,
and that you can never know how much you are going to make on a trade. Thus the only thing left to do is
to determine how much risk you are willing to take in order to find out if you are right or not. The key to
trading success is to focus on how much money is at risk, not how much you can make.

Book Review - MindTraps

I read a great book on trading psychology, called MindTraps by Roland Barach. MindTraps focuses on how the average person tends to think, compared to how we need to think to make money over time in the markets.

Here's a summary of points that can benefit you as a trader:

1. Before entering any trade, you should consider the other side of the trade and state the reasons you'd take the other side of the trade. This helps you objectively enter a trade with a full understanding of the major risks that involved.

2. Analyze your behavior from the beginning to the end of the trading process (from idea generation to entry and finally to exit) - what are the areas you can improve to help your trading profitability the most?

3. Keep a trading journal of your thoughts on open positions and new ideas - writing things down helps you objectively look back and see where you went right and wrong.

4. Fear blinds us to opportunity; greed blinds us to danger - emotions cause "perceptual distortion" where we only see the part of the picture that our beliefs allow us to see.

5. We are likely to continue doing things for which we are rewarded -this can cause us to get too bullish after the bulk of the uptrend has occurred, or get too bearish near the lows.

6. Fear of regret slants stock market behavior toward inaction and conventional thinking - the person who is afraid of losing is usually defeated by the opponent who concentrates on winning (an analogy for sports fans is the Prevent defense in football - playing "not to lose" only prevents you from winning).

7. Can't have a personal agenda to prove your self-worth in the markets - the focus must be on following your plan to maximize the ability to make money.

8. Don't get overly attached to any one view on a stock or market - don't talk to others about open positions; it just makes it that much harder to exit when your plan says it should.

9. Our predictions are only as good as the information available to us - objectively look at the indicators and data you use, to get the best quality of information and focus available

10. People prefer for gains to be taken in several pieces to maximize their feeling good about their ability, while they prefer to take all their losses in one big lump to minimize the pain they feel.

11. People prefer a sure gain compared to a high probability of a bigger gain, so they can say they made a profit; in contrast, people will speculate on a high probability of a bigger loss over a sure smaller loss, because they don't want to feel like a loser. In trading, we must flip around the conventional emotions to allow us to let profits run while cutting losses shorter.

[xe2dy]

Link to Trend Signals' blog

http://www.trend-signals.com/

[xe2dy]

Link to Trend Signals' Q's charts. Today's volume (318507200) was another 'climactic volume' event like Feb 27th (318311808).

Just click the msg# 225 button.

Got this off a google search for 'climactic volume'.

http://www.streetauthority.com/terms/volumedownside.asp

CLIMACTIC DOWNSIDE VOLUME AND SWING TRADING OPPORTUNITY

In the past several StreetAuthority Swing Trader issues we've dedicated this "INSIDE THE BLACK BOX" section to the exploration of several volume principles essential to correct chart interpretation. By taking volume patterns into consideration before making any trading decision, you'll be much more likely to uncover highly profitable swing trades.

Here's a quick look at some of the volume principles we've already discussed:

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Price patterns must always be looked at in conjunction with their associated volume pattern, never alone.
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Careful analysis of the volume of selling that occurred above current resistance will help you estimate how long a stock will stall at that level.
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Well-above-normal volume is essential when separating a true from a false breakout above resistance.
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Well-above-normal volume on the break of a key support level is likely to keep the swing trader from making the mistake of shorting into a deceptive "spring" formation.

This week I want to talk about climactic downside volume and how its retest creates a profitable swing trading set-up. Climactic downside volume will typically occur after one of two circumstances. First, if a stock is in an extended downtrend, then a washout day of very heavy selling may accompany a new low. Second, unexpected news such as a negative earnings pre-announcement or issue of corporate misconduct can create an enormous volume spike. In these cases, institutions are apt to sell first and ask questions later.

Swing traders should be aware that a trend will often reverse, at least temporarily, on a burst of enormous volume. The volume burst signifies that many of the sellers have already gone through the exit door. There is no place for the stock to go, at least in the short term, but up.

The upside reversal off a climactic selling volume spike, while it can be swing traded, requires both patience and a great deal of nimbleness. Residual sellers who have not yet hit the panic button often see this first rally off the bottom as a chance to recoup some of their losses. With this in mind, the first advance off the low is often grudging as the stock runs into selling pressure or resistance.

Eventually, then, a retest of this first low can occur. That second bottom, when you spot it, should be scrutinized very carefully. If volume on the second bottom is far lower than at the selling climax, then the stock has likely found a key support level. If this is the case, then at this point the shares will more often than not reverse off this important support. The nearby support allows traders to set fairly tight stop losses as well.

To confirm this reversal off support you'll want to examine a good combination of indicators. I generally use stochastics and MACD. Stochastics is typically the more rapid indicator and will give the first signal of trend change. If MACD then confirms this signal with a buy signal of its own, then the probability of a tradeable rally is high.

Below is a chart of mortgage lending giant Freddie Mac (FRE). In early June the stock gapped sharply lower, trading almost 60 million shares in a single day (approximately 12X the normal daily volume). Three trading days later, FRE was still trading 40 million shares, as the stock hit bottom just below $47.50. It then commenced a rally that took it back to the bottom of the gap at $55 in early July.

FRE then sold off steadily into early August, again testing the $47.50 level on the first trading day of the month. On this retest, however, trading volume was extremely subdued. In fact, it was under the average daily volume for the period. Such a low-volume retest is a valuable clue that an important reversal could be happening. More evidence should be sought, however, that a turning point has been reached. In this case, FRE gave that evidence.

There were four important clues that a rally was about to occur. First, the stock made its second low with bullish divergence between price and both the MACD histogram and MACD. Bullish divergence occurs when price hits an equal or lower low, yet the indicator moves higher. Second, the stock broke a three-week Intermediate downtrend line two trading days later. Third, stochastics then gave a buy signal and MACD confirmed this signal very shortly thereafter. Ultimately, FRE then rallied back to resistance at the top of the gap.

A low-volume retest of climactic volume sets up the distinct possibility of a reversal rally. When running visual scans of stocks, look for this pattern. Put them on your watch list. If indicators such as stochastics and MACD give buy signals, then you have found a low-risk (and potentially highly profitable) swing trading opportunity.

Good trading!

[xe2dy]

Q's with yin and yang








Nice 'W' bottom on QID.

[frenchee]

Short ETFs

#msg-21451671

[frenchee]

$HUI Intermediate-term Indicator