AI
Re: TZA - BreakOut: A Case of Devil's Advocate
Clearly, TZA has been doing some serious climbing recently. Combined with $SPX's $SML chart (which I posted earlier today), there is definitely a sense that Small Caps are getting ready to roll down.
However, technically, I am always looking for the false signals in any break-out pattern. And, sure enough, I have found a few technical events (bearish channel validation, Moving Average resistance, concerted indicators signaling overbought conditions) that may speak against a true break-out, at least so far.
Following is the technical annotation I provided within the chart:
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25 MAR 2010 - TECH-NOTE: Watch for dominant DTC and reproducible patterns of "fake rallies", that just further validated that bearish channel. Breakout should occur once upper border of that channel has been violated, IMHO.
More specifically, consider:
1 - "Pre-Decline Pattern" formation
2 - 233-EMA remains "true" historical moving resistance still
- Dalcindo
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TZA - 9-Day, 15-Minute Chart:
Tell me what you think.
- Dalcindo
Clearly, TZA has been doing some serious climbing recently. Combined with $SPX's $SML chart (which I posted earlier today), there is definitely a sense that Small Caps are getting ready to roll down.
However, technically, I am always looking for the false signals in any break-out pattern. And, sure enough, I have found a few technical events (bearish channel validation, Moving Average resistance, concerted indicators signaling overbought conditions) that may speak against a true break-out, at least so far.
Following is the technical annotation I provided within the chart:
---------------
25 MAR 2010 - TECH-NOTE: Watch for dominant DTC and reproducible patterns of "fake rallies", that just further validated that bearish channel. Breakout should occur once upper border of that channel has been violated, IMHO.
More specifically, consider:
1 - "Pre-Decline Pattern" formation
2 - 233-EMA remains "true" historical moving resistance still
- Dalcindo
---------------
TZA - 9-Day, 15-Minute Chart:
Tell me what you think.
- Dalcindo
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