Silver Falcon Mining Inc. (fka SFMI)

[Hurricane_Rick]

Boca Bobby,

Thank you for your awesome response and I don't mind being corrected especially when you present it deferentially rather than adversarially...it makes for a better learning experience for everyone reading. I also enjoy breaking down and discussing the TA for various charts. Let me address a few of your points...

Between July and November of last year we see where .112 - .121 held as support 4 times. So a safer way to enter for those not in would be to watch for those levels and see when the reversal candle appears. Then wait an additional day for confirmation of a true reversal. Then jumping in is a lower risk than trying to just call out a bottom.

You are absolutely correct here. RBKissMyAs pointed out in another post that I neglected to consider the .12 support line in my chart and although I had considered it in my personal analysis, when I annotated my chart I neglected to include it...and it should be discussed in that context as well since it is a very important part of trying to determine the bottom. If the .12 support line holds, that will be an additional factor in considering the reversal. If we break .12, the STO crossover won't occur anyway and we'll continue our downtrend until the signals align themselves for the next "opportunity".

I would like to know how many times you have seen this very exact set up to give you a 75% success rate at calling a reversal, but I digress.

Let me qualify my 75% success rate. I observed this primarily trading the FAS/FAZ 1-minute and 5-minute charts where, in theory, fundamentals are almost non-existent when analyzing the trade. When I first started trading FAS/FAZ using the lower "bollie bounce" strategy as one of my trading strategies, I found I was getting headfaked many times. If you pull up any chart of any security, you will see in a downtrend a candle might breach the lower bollie several times before the share price reverses. So I began incorporating the "Sub-20 STO crossover" as a confirmation to the bollie bounce signal. You will still get headfakes even if there is a sub-20 red-over-green STO crossover; however, if you wait for the STO to rise above 20, then that is further confirmation of the reversal. This particular scenario is where I experienced the greatest success...what I'm estimating as a 75% successful occurrence. In addition, I should clarify that the 75% successful occurrence for telegraphing a reversal does not necessarily mean a full blown reversal where a stock marches onward to new highs. If I could do that, I'd be a billionaire! A successful reversal occurrence for me is one that results in a profitable trade resulting after confirmation as opposed to a headfake resulting in a losing trade. Many times the reversal gets to at least the middle bollie (20MA) and ideally, if it is a true reversal rather than a technical bounce, it will touch (or breach) the upper bollie). If/when the confirmation on the sub-20 STO crossover occurs, I will post it in this forum and we'll see what happens. Who knows, I may just buy the crap out of SFMI at that point to make it happen!

Today's candle was a "bearish engulfing" type. This is bad news in the short term. I see just a little more pain before this can hit a true support level.

Yes, and this is where candlestick charting...as great as it can be for predicting price movement, it is also an inexact science because it doesn't always reflect the intra-candle activity that formed the candle. And as such, it can be manipulated so that a candle doesn't necessarily reflect the situation at hand.

Recall this morning that we opened up with a 200 share trade at .14, a 300 share trade at .123 and then a 400 share trade at .143 almost immediately. I don't even think the bid and ask were even at these levels, but I missed it on LII. After those trades, there wasn't a single trade above .13 for the rest of the day. So with the candle opening up immediately at .14 and then down to .123, those two piddly trades amounting in ~$65, painted a bearish engulfing candle before 10 seconds of trading had occurred. I know from experience this is a MM trick to make the chart look gloomier than it perhaps is. Note: They don't have to make the current chart look gloomy...we can see it plainly enough. I don't know how many chartists saw that candle and opted to sell for the reasons you stated in your post...maybe nobody did, but I still think it was painted because it in no way accurately reflected the supply and demand at the time. So, a more accurate portrayal of the red candle today should've "only" been as high as .13 and as low as .122. Obviously we're still in a downtrend, but not quite as gloomy as the bullish engulfing candle unfortunately illustrates due to the "fake" (IMO) .14 and .143 trades out of the gate.

In summary, as I'm sure you're aware, there are many different ways traders can dissect TA indicators and studies to attempt to predict price movement and buy/sell points. Some people solely use fibonacci retracements, some use candlesticks, some use support/resistance lines, some use flags/pennants/triangles, etc. All have their inherent strengths and weaknesses, so sometimes it is best to consider multiple indicators as long as they don't overlap too much and negate or confuse each other. With SFMI specifically, I think at .12 we're approaching a particular line in the sand from a T/A standpoint. It will be interesting to see if that line holds and the reversal occurs, or if we're in for further weakness.