Replies to post #23809 on Fannie Mae-No Politics (FNMA)

[JJ8]

I say, the view as being 'unbiased' in T/A should be taken a bit with a grain of salt. What's unbiased in such a game that's most of the time counter intuitive? The market is too complex a dynamic to simplify like that. For instance, if you discover that rallies tend to last 8 days and declines 5 days, that knowledge encourages you to look for a buying opportunity 4 days into a decline. Would you ignore such a pattern seen in the chart and say I have an 'unbiased view' and the market is going down? Things are not as simple as they look in a chart. Psychology is very much part of it.

The 'expert' says the proper way to analyze any market is in at least two timeframes. They should be related by the factor of 5. The factor of 5 links all timeframes.

If you want to analyze daily charts, you must first examine weekly charts, and if you want to day-trade using 10-minute charts, you first need to analyze hourly charts.

[BennySlots]

Yes, you should change to the 60 minute chart to see what we're talking about. Pharaoh already posted it and circled some important indications.

Secondly, even if you just look at the daily chart it gives you clues about a reversal. For example:

1. The candle on Friday showed indecision. When a candle like that forms after a strong trend, it can often mark a reversal.

2. The candle has a longer bottom tail AND bounced off the 25 MA. Another good sign that resistance there may hold and cause a reversal.

3. The Stochastic indicator just curled up and crossed

4. The RSI line also started to curl

5. If you look at the Accumulation/Distribution line, you'll see that it reversed and spiked up on Friday.


Now, having said all of that the full CEO interview is tomorrow morning. If real news is made, that could either strengthen the reversal or stop it from happening. But just based on the chart, it looks like a bounce up is about to occur over the next few days.

GLTY!