April 6, 2012
Apr 6, 2012: Market Recap 12

Another week of wondering if the market signals are going in favor to turn south. This time I think it’s more leaning towards a retracement, but there still isn’t confirmation. The dow and S&P look like they’re moving together, but the Nasdaq isn’t quite there:

Dow: Back in November, through the course of about a month, the Dow showed signs of a retracement that started with 3 moves of lower highs. In other words, what looked like a downtrend. The moving average was eventually broken through, and the index met some resistance, which was soon reversed back into the uptrend that I’ve been seeing.

This sort of thing is happening again now, although the top and trend does not look as defined, but a form of resistance looks pretty clear.

As of recently, the dow has been on a crazy uptrend. The question is, when was the last time the Dow was this high? Is it at an all time high? So I pulled up a weekly chart, and pulled it back as far as possible.

Nice to see that resistances and supports from 3 years ago are still in place.

Nasdaq: Shows something similar to the Dow, but the retracement that occurred in the Dow in November are not as defined here. The triple top as of the past few weeks that has happened in the dow is also not very present here.

S&P: This one is much more in agreement with the Dow.

Word on the street is that the market is going down when Monday rolls around

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Filed under: stocks trading apr 6 2012 market recap dow nasdaq s&p dji compx spx technical analysis 
March 9, 2012
March 9, 2012: Market recap #8

More signals, no confirmations as far as I can tell. Quick peak at what the week charts look at, with the important parts highlighted

Weekly Dow: Hanging man under trend? I think it’d be better if it was a little higher

Weekly Nasdaq: Like this one

Weekly S&P: More of a doji here

Daily Dow: I was tempted to say that a Falling Three Methods pattern may be forming, but it’s not in a down trend. I should be expecting reversal signals instead. So far Not really seeing anything, although there’s a new resistance point that hasn’t been broken. Notice the lull that’s been happening for the past month almost of no real move.

Daily Nasdaq: New resistance on this one too. This index seems to gap a lot more than the dow does. It dropped under MA and bounced back up. The support seems to be holding well.

Daily S&P:This is also contained pretty tight. Not as much by MAs or trend lines, but by resistance and supports.

More waiting in my opinion.

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Filed under: stocks trading march 9 2012 Market recap 8 dji dow nasdaq compx S&P spx 
March 2, 2012
March 2, 2012: Market Recap #7

10 day charts, 60 minute intervals

Dow: Interesting per usual. This week all the indexes had 1 candle that stuck out to me: a green candle that pushed at a higher high, and didn’t make it. It should be obvious that the big 13k mark should be a point of strong resistance, and that’s what happened. It shot up, and managed to even close at the high, but was brought back down immediately after. Even so, I noticed that this week, specifically with the dow, that the trading range was pretty tight. The past 2 weeks have been all contained in the box I randomly drew. I’d consider this to be a consolidation block for sure. The only point out of the box was the push for the high.

Nasdaq: The green candle for this one for the higher high didn’t mange to close above, and in fact is more of a doji. The difference is the nasdaq trended higher this week, as opposed to sitting around like the dow. I’d take this to be news that even though there may be some early reversal signals, I still don’t think it’s there yet. It’s kind of cool to see how the box shows the points of contention with the index. Monday was the 27th, which started with the strong green candle to push the index higher. the red boxes who places where the index was below the MA, and the 2 red boxes at the end are both testing the box boundaries (as in the week’s progress) as well as the MA.

S&P: the S&P also trended higher, and also had the green candle that couldn’t make it. The price at the end of the week was below the trend line I drew, as well as under the MA. Things could start looking bearish if it starts testing below this weeks progress I suppose, though without the confirmation of the other indexes, I wouldn’t be confident in any major move.

Overall verdict is still slight bull/consolidation. I didn’t mention them in each index, but there were several attempts throughout the indexes to push below the MA or trend, and they were all pushed back up. So there’s still quite a bit of support from below.

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Filed under: stocks trading market recap 7 technical analysis candlesticks dji dow nasdaq compx spx s&p 
February 4, 2012
Feb 4, 2012: Engulfing pattern

I think next week we’ll get to the heavier more complex patterns. Today’s is a deceivingly simple pattern, the engulfing pattern, comprised of only 2 candles. For the bullish pattern, the body of the green candle for x period should fully “engulf” or be bigger, than the red candle before it. I don’t believe the tails are very important, but the main point is that in comparison to the day before, it should have a higher high and a lower low. Follow through for the pattern should be of that candle, or in the bullish example, it should go up. The reverse is true for bearish, except replace the red with the green, and the predicted trend should be down. Seems REALLY simple, so lets look at some charts:

First, daily charts of..

The dow:

Lookin good…

That last one doesn’t look so bullish to me..

Ok now we may have some problems. Say what you might about some of the past red candles not fully engulfing the one previous (you know since many opens are the same as the close the day before, it may not count as fully engulfing) but that 3rd red circle is DEFINITELY engulfing the green candle and the stock makes a big uptrend! Perhaps the candle is only good for predicting the candle right after? Seems pretty consistent…. An alternative hypothesis would be that the candle isn’t “strong” enough. Here I’m only looking at daily charts, maybe they would be clearer indicators for longer periods, such as weekly candles:

Okay that seems not to be the case, by either hypothesis.

What now? （╯°□°）╯︵ ┻━┻

If the candles can’t predict for weekly charts, I’d be afraid to use them. Well it sounds unintuitive, but what about SHORTER periods?

agggg, still nope. But to be honest, in 5 minute charts it was much harder to find one that didn’t work (could also be because gapping is much harder to find in short chart periods). Many of them DID work. However, while 5 minute charts MAY be able to predict the next candle, what good does that do realistically, when I probably can’t even capitalize and make profit on it right?

In conclusion, I think the engulfing pattern seems to work in most scenarios, but it should definitely be backed up with other things. I’ll see if I can incorporate them into next weeks predictions!

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Filed under: 2012 Trading candle stick candle stick patterns dji dow engulfing pattern stocks Feb 4 2-4-2012 
January 13, 2012
Jan 13, 2012: Recap and thoughts #1

Officially the end of week 2 of trading in 2012. The dow closed at 12422, up about 200 from the start of the year, the 3rd. That’s something around 1.5%, not very much. They say this is sort of “testing” the “level” that the dow is at right now. By this they mean that traders are trying to figure out how stable the 12400~ price area is. If the markets are strong, negative news and selling won’t drag down the market, and like wise, positive news and buying will edge the dow up.

If you take a look at a line graph of the dow for the past 2 weeks or so, this week they’ve been testing the dow “from the top” as opposed to 2 weeks ago when it was being tested “from below”:

Previous to the 9th (the start of this week) the market was on the way up to the point and moving a bit around that area. This past week prices have been above the line, and people have been waiting to see if it would dip back down. Kinda neat.

Anyhow, I also wanted to take a look back at some of the stocks I picked out for the patterns as “x formation” examples.

First, from the Resistance/Support and Trend posts, I decided to take a look back on Bank of America(BAC) and Apple(AAPL).

-What was it that I said about Bank of America? There was a trend line downward, and I believed that if it moved past the red line, it would break the downtrend and have a chance to rally up. Additionally I thought that if it’s pullback didn’t dip below the line, that would also be a good sign.

Heyo, not bad. BAC seems to be on it’s drawback right now, so maybe I’m a bit early on the whole follow up thing. Other than that, Assumption 3 was to not buy below the Moving Average, or the orange line, and BAC seems to pass the test here. I deem this still to early, I’ll check back later.

-What about Apple? I suggested that there might be a resistance forming where the peak was at when I made the post. I drew it in now:

You know when you make a cool play in a sport and they do a zoom in or slow motion? I feel entitled to do that:

That’s cool. If you look at the candlesticks you’ll see that, yes, there are a few points above the line, but they’re both red and close below (hence on the line graph they don’t appear to be above the line. Looks like it worked! Now as for any shorting, I’d venture that it’s not safe to short until it either breaks the support line at 406 and/or when the orange line turns downward.

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(Notes: 2)
  
Filed under: Follow up 1 recap thoughts jan 13 2012 1-13-2012 stocks trading resistance support BAC bank of america AAPL apple dow dji 
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