Chart of The Day

One of my goals with my clients, subscribers and you guys is to have you prepared for the “What If”.  In other words what would you do if the market went back down and tested the March ’09 lows?  How about if it broke 10,000 to the downside again?  What about 5,000? You just never know and for that reason we always want to use stops to protect profit and or limit loss.  We also want to be able to play the market in both directions.  Interesting how Wall Street has most of Main Street playing it in just one direction.  We’ll discuss that another day.

So the chart below raises the “What If” question.  This a yearly chart of the Dow.  Each candle represents a year.

The pattern is a potential long term  H&S (head and shoulders=bearish) pattern.  The potential for a H&S will exist until the high in the left  shoulder is broken to the upside by the right shoulder.  That number is 11,750. 

Today the trend is long.  But always be prepared for the “What If” down the road.  It’s the only way to sleep.

Enjoy your night.

-Doug

Click image for larger view

Chart of The Day

Here is another example of why the closing price is so important.  Back on 3/30/2010 we showed a bull flag or pennant pattern on WMT.  We were looking for a close above 56.10.  The closing high in that candle was 55.91.  In other words you don’t pull the trigger until you get a close above the line.  The chart shows how WMT broke down.  If you were long WMT you would have placed your stop around 55.25 (support).   As of today, near term support is at 54.

Think closing price, not intraday.

Enjoy your night.

-Doug

Click image for larger view

Quote of the Day

“It is better to conquer yourself than to win a thousand battles. Then the victory is yours. It cannot be taken from you, not by angels or by demons, heaven or hell.”

 -Buddha

Protected: 4 Minute Trader for 4/19/2010

This content is password protected. To view it please enter your password below:

Protected: M48 Bulletin for 4/19/2010

This content is password protected. To view it please enter your password below:

Trend Line on SPX

This chart shows you roughly the channel that the S&P has been trading in recently.  When the lower trend line is pierced in the channel, you should sit up in you seat.  When support is broken you should grab the wheel.  Today you should sit up in your seat but you don’t have to grab the wheel yet.  Near term support is at 1180.  Below that is 1160 and then major support and the 50 day is near 1150.  Let’s see if 1180 holds.  Its got a target on its back.

Three times in the last twelve months the trend line has broke and the dips were bought and the bull move resumed.  This occurred in June ’09, October ’09 and just recently in January.  When the trend changes you have to bail.  If it resumes you get back on board.  The one time you don’t bail is when a top has been put in and you are toast.

Have nice weekend.

-Doug

Click image for larger view

INDU…

Here are some resistance levels on the Dow.  The first major level was 10K and it just went through 11K. 

The Bulls and Bears should fight it out at 11,200 and 11,300 if it gets there.  The trend remains intact but the VIX is dropping.

Enjoy your weekend!

-Doug

Click image for larger view

Quote of the Day

After climbing a great hill, one only finds that there are many more hills to climb.
-Nelson Mandela

Protected: M48 Bulletin for 4/15/2010

This content is password protected. To view it please enter your password below:

Protected: Managed Accounts Weekly Roundup for 4/15/2010

This content is password protected. To view it please enter your password below:

Return top

* * * *

Welcome fellow traders and investors!

As Money Managers and Traders, the mission of our Blog and Radio Show is to go on record and further educate our readers and listeners in technical analysis and proper money management across all asset classes.

Our methods are not the traditional advice you hear repeated and repackaged over and over again, but that’s exactly the point and the reason why we know how to advance and prosper in every kind of market.

To Your Success,

Doug & Gary