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Sunday, April 22, 2012

LOOKS LIKE SOMETHING MIGHT BE BREWING HERE




First of all for any readers who have their own blogs and use Blogger, I would assume you dislike this new platform as much as I do? It is impossible to find anything.

We have a classic triangle pattern here on the above chart of the Russell. I think we are going to break down out of this due to the heavy selling showing on this bounce here by the Commercial Proxy Index. You can see I marked the last two times this happened, so this should be the same outcome. The short term trend is down now, so the path of least resistance should be lower. The longer term trend is still well intact upwards, so I am not overly enthusiastic about trading against the FED. However, it is what it is. There is a legitimate setup here, and it could also be easily stopped and reversed to the long side, if we get a false break down first.

You can also see the new highs to new lows index I have at the bottom. This is something I referenced a few weeks ago as a reason to tighten stops and look for a decline to be coming.

I am kind of in a lousy mood due to a weekend long project from the wife down at the barn, that was brutal. One funny thing to mention was I was using cable ties to secure some material to a chain link fence as a smart part of this big project. While I was doing this I had the world's worst pick pocket, Vinny, constantly bashing into me and trying to muscle the cable ties out of my pocket. I could hardly get mad at him because it was kind of funny, but he has no future as a pick pocket. He almost knocked me over once and came close a few other times, he is pretty big now at 8 months, about 150 lbs already. He kept sneaking up on me that banging into me when I was not expecting him to.

I do have a new stock trading method I have developed that hopefully addresses some of the flaws of the one I had before. Here is what it has for tomorrow just to call a few out live to watch.

BTU - short any up close MOC
HAL - short MOC any close >= 33.29
NSC - short on a limit at 69.05 or better

There are others, but let's just watch these. No stops will be in place with these and they are very short term trades. The method only trades in the direction of the short term trend of the overall market which is down, so that is why they are all shorts and no buys.

The Bond trade still has the same stop and exit parameters. I also am looking at the long side in Cattle and Feeder Cattle for Monday if we start rallying.

Good Trading

2 comments:

Squire said...

I have found plastic cable ties to not last long in the sun.

My index longs are close to being stopped out this Monday morning.

Michael Tredr said...

i can most definitely see momentum moving back to the upside as the the longs have an ally in these support areas. it really does feel like I'm trading against something bigger and having to make that gut check for trade discipline several times a day is a sobering experience.