S2 Acted
as support just above the 32.50 level of prior support (for now). The uptrend line has been broken and the Qs are also back below the 5DMA. The intermediate term trend is becoming more neutral and the danger is that it will fail to recapture 33.25 (or so) and we will see a pattern of lower highs and lower lows re-emerge to confirm the longer term downtrend. Be defensive.
http://1.bp.blogspot.com/_r_4bas-lh0U/SRHenidfVjI/AAAAAAAADJA/spyzkueWfnU/s400/3325.png
Posted by Brian at 11/05/2008 12:52:00 PM
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IPO to Grave In Just 94 Days
Has there ever been a worse IPO?
http://2.bp.blogspot.com/_r_4bas-lh0U/SRHNaG4C0HI/AAAAAAAADI4/f6lvtBkGYS8/s400/IPOtogravein94days.png
Posted by Brian at 11/05/2008 11:41:00 AM
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Labels: IPO
Test the 5DMA
The Qs appear headed for a test of the rising 5DMA. That level has added significance as it is also where the recent uptrend line is met. More important support is found near 32.50.
http://4.bp.blogspot.com/_r_4bas-lh0U/SRHC0NlwJNI/AAAAAAAADIo/-NuhuPPSPPw/s400/tlvwap.png
Posted by Brian at 11/05/2008 10:58:00 AM
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If The World Could Vote
This is site has a live Global Vote for US President with some interesting data points.
The market rally continues as fresh money chases prices higher, the Qs are coming up to a 38.2% retracement which has the POTENTIAL to become a place where new buyers slow down and profit taking occurs (the process of forming resistance). Trend is clearly still higher on the shorter term timeframes.
http://2.bp.blogspot.com/_r_4bas-lh0U/SRB_faNq5qI/AAAAAAAADHw/p1xevWMKTPY/s400/fib.png
Posted by Brian at 11/04/2008 11:45:00 AM
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Labels: fibonacci
Stem Sells
As I mentioned last Thursday... buy the rumor, sell the news. The stem cell stocks have had a huge short term rally over the last four days (green arrow shows where they were when I mentioned the possibility of an election play) and the higher open today was sold into. There does not appear to be any reason for TRADERS to continue to be involved long until these gains have been digested. I believe the longer term outlook for these stocks is very bullish, but I am happy to have cashed in my shares and will look for new opportunities to get involved after this rally has been absorbed. These stocks will be good ones to trade on the long side over the next couple of years, particularly around key votes for previously vetoed initiatives for federal funding for embryonic stem cell research.
http://1.bp.blogspot.com/_r_4bas-lh0U/SRBpXY1FElI/AAAAAAAADHo/VkRcHhOgqhQ/s400/stemsells.png
Posted by Brian at 11/04/2008 10:26:00 AM
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Labels: stem cells
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Feeling Frothy
There are a lot of big percentage moves in broken stocks (stem cells included). It seems like people have let their guard down again and are chasing "junk stocks" higher. When we see this type of activity it is often late in a move. Do not be like the herd, RAISE your respect for risk in this environment and listen only to price.
http://2.bp.blogspot.com/_r_4bas-lh0U/SQ8cFsJqd6I/AAAAAAAADGk/jmP2n6HLV2I/s400/risk.png
Posted by Brian at 11/03/2008 10:43:00 AM
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Stem Cells
If you purchased any of the stem cell stocks I mentioned as election plays
LAST THURSDAY I would recommend lightening up a bit into this strength.
http://1.bp.blogspot.com/_r_4bas-lh0U/SQ8Phd8Kp1I/AAAAAAAADGc/hrmyUz6_x34/s400/stemcells.png
These stocks were also great election play when I mentioned them 2 YEARS AGO
Posted by Brian at 11/03/2008 09:42:00 AM
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From Failed Moves
often come fast moves in the opposite direction. Be very careful here.
http://2.bp.blogspot.com/_r_4bas-lh0U/SQtMtSPbiCI/AAAAAAAADGE/IPZ4Tu0RtVs/s400/failedfast.png
Posted by Brian at 10/31/2008 02:21:00 PM
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Healthy Consolidation?
While the Qs battle with reistance near 33.00, the market has held the gains for the week very well and a pattern of higher lows (on the 10 minute timeframe) has emerged. The primary trend remains lower and the daily timeframe is still a wreck which is why you cannot let your guard down by only considering a break past 33 scenario. This will probably be my only post until the video after the close.
http://2.bp.blogspot.com/_r_4bas-lh0U/SQs3mymVhDI/AAAAAAAADF8/0UbLxGxnDzY/s400/friday.png
Posted by Brian at 10/31/2008 12:49:00 PM
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Bank Robbery
It is easier to rob by setting up a bank than by holding up a bank clerk.
~Bertolt Brecht
http://4.bp.blogspot.com/_r_4bas-lh0U/SQUGVl9mo6I/AAAAAAAADCo/rNLYQIgSkn8/s400/image001.gif
Posted by Brian at 10/31/2008 06:04:00 AM
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Labels: quotes
Thursday, October 30, 2008Stock Market Video Trend Analysis 10/30/08
http://3.bp.blogspot.com/_r_4bas-lh0U/SQoX1qOYeRI/AAAAAAAADF0/-bdniKtNaiM/s400/103008close.png
If you are a trader, you do not want your name on THIS LIST
BTW, I am considering putting all intraday updates in the bonus section of the book site next week, which means you will need the username and password in the book to access.
Posted by Brian at 10/30/2008 04:24:00 PM
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Again?
Be careful
http://4.bp.blogspot.com/_r_4bas-lh0U/SQoH-Xw2g0I/AAAAAAAADFs/BU5JG8kkviM/s400/uhoh.png
Posted by Brian at 10/30/2008 03:15:00 PM
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Back Near Highs
Although I don't think the market has digested gains long enough, we have to be prepared for the possibility that the market may continue higher without further consolidation, leaving the unprepared participants in a position to chase much later. As we have seen lately, the final hour can bring anything and things can happen very quickly.
http://4.bp.blogspot.com/_r_4bas-lh0U/SQoChfSuEnI/AAAAAAAADFg/a6YYiQGfWQk/s400/consolidate.png
Posted by Brian at 10/30/2008 02:53:00 PM
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1 Minute Inverted H&S
2347 advancing stocks
667 declining stocks
The market holds up well and it just broke back above daily VWAP and the neckline of an inverted H&S pattern. Let's see if the VWAP/neckline acts as support.
http://2.bp.blogspot.com/_r_4bas-lh0U/SQnthqNQCCI/AAAAAAAADFY/WdIwAF0oMAg/s400/vwapneck.png
.
Posted by Brian at 10/30/2008 01:12:00 PM
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Labels: stem cells
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Thursday, October 30, 2008A Step Back for Perspective
The chart below shows the Daily and 30 minute timeframes for the Qs. The area shaded in yellow is magnified with 30 minute data on the inset chart. This rally is still within the confines of a bear market so all long plays should be smaller size and have strict risk management. One potential scenario is a continued pullback which would meet up with the rising 5 DMA (maybe near 31.00?). A pullback like this would also build a right shoulder for a crudely formed inverted H&S pattern with the neckline near 33.35. A break of that neckline would lead to a conservative upside target near 37 which is near the high from Oct 14 and where the declining 50 DMA could be met. For now, it appears we need to consolidate further before such a scenario could unfold but it is something to keep in the back of your mind. Let price action dictate, it remains a volatile and dangerous market.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQnHQ0scRZI/AAAAAAAADFI/riD1Q-ELP64/s400/backup.png
Posted by Brian at 10/30/2008 10:32:00 AM
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Yesterday's High
is acting as resistance for the Qs as trading remains very choppy. Perhaps we need to consolidate Tuesday's move more before another rally attempt.
http://2.bp.blogspot.com/_r_4bas-lh0U/SQm-Lyz_DhI/AAAAAAAADFA/Q-GMAsgyMJc/s400/highs.png
Posted by Brian at 10/30/2008 09:58:00 AM
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Slow Shift In Sentiment
Twice this week the market has experienced a violent selloff in the final 15 minutes of trading. Both times the market has gapped higher on the next open (Qs are trading at 32.81 pre-market). For the participants who threw their stocks away in fear of a continued meltdown, they have these choices; sit on the sidelines watching in disbelief, to short the open the next day or to chase prices higher. With a slowly improving market (evidenced by the closes above the rising 5DMA) selling short doesn't make sense to me, neither does chasing opening prices. The supply which was released to the market in the late day selloff is less supply going forward (which allows prices to move higher with more ease) and those who sold short actually increase demand as they scramble to limit losses with a gap opening. So what may be best is to wait for a slight pullback and then to look for this market to continue higher. We remain in a treacherous environment, but the sentiment seems to be slowly be turning and more importantly, prices appear to be turning, for now.
http://1.bp.blogspot.com/_r_4bas-lh0U/SQmzfVVor-I/AAAAAAAADE4/gSh4iNlnpV4/s400/sell.png
What does not kill me, makes me stronger.
Friedrich Nietzsche
Posted by Brian at 10/30/2008 09:03:00 AM
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Doubt and Bad Luck
If you don't have 100 percent of the peripheral resources nailed, doubt and bad luck find a way to drift in.
~Bart Knaggs
Posted by Brian at 10/30/2008 06:01:00 AM
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Labels: quotes
Wednesday, October 29, 2008Stock Market Video Trend Analysis 10/29/08
http://2.bp.blogspot.com/_r_4bas-lh0U/SQjE7zDwF6I/AAAAAAAADEw/VNtKqT-LjcA/s400/102908close.png
Yesterday I put a bad link up for the LAS VEGAS TRADERS EXPO which I will be speaking at on November 22.
Posted by Brian at 10/29/2008 04:16:00 PM
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Be Careful
The market came off the highs on big volume
http://1.bp.blogspot.com/_r_4bas-lh0U/SQi7pAxCB0I/AAAAAAAADEo/yeV6C3qHTwE/s400/careful.png
That pullback low will be important for the rest of the session
Posted by Brian at 10/29/2008 03:35:00 PM
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Final Hour Push?
The initial volatility seems to have worn off and the market is holding onto the bulk of the gains for the day in eerily quiet post Fed trading. Never short a dull market?
http://2.bp.blogspot.com/_r_4bas-lh0U/SQi2VrdddMI/AAAAAAAADEg/_iYpcahxQSE/s400/dullmkt.png
Posted by Brian at 10/29/2008 03:07:00 PM
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Protect Your Gains
The market has expended quite a bit of energy and volume is decreasing. Volatility typically soars right around the time of the Fed announcement.
http://4.bp.blogspot.com/_r_4bas-lh0U/SQiiKzaGB2I/AAAAAAAADEY/5MLTWucaVlc/s400/protect.png
Posted by Brian at 10/29/2008 01:47:00 PM
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Holding Up
The market is digesting yesterday's advance ahead of the release of the Fed statement at 2:15PM Est today. It would be healthy for the market to continue to pullback towards prior resistance and the 5 DMA.
http://1.bp.blogspot.com/_r_4bas-lh0U/SQh7MuLcdRI/AAAAAAAADEQ/3O_p73iPCz4/s400/holding+up.png
I put a bad link up for the LAS VEGAS TRADERS EXPO which I will be speaking at on November 22.
.
Posted by Brian at 10/29/2008 10:57:00 AM
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There is Always
another level of potential resistance when the market experiences a counter trend rally. That level appears to be the close from last Thursday (near 3050). A pullback towards 30.00 (near the 5DMA) would be ideal, but not necessary, for a new level to launch higher from. Be careful not to let your guard down, protect gains.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQdiY7Zip7I/AAAAAAAADEA/x5W0SnxZ3UU/s400/another.png
Posted by Brian at 10/28/2008 03:00:00 PM
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Improving, but..
the 5DMA is still declining and the recent resistance ~3020-3030 is just above. I still believe longs should not be trusted for more than a daytrade. I would be more impressed if the market can move above 3030, then pullback and hold the 5dma as support.
http://2.bp.blogspot.com/_r_4bas-lh0U/SQdZppy6lsI/AAAAAAAADD4/JSBTiflDLrE/s400/improvingbut.png
Posted by Brian at 10/28/2008 02:25:00 PM
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Unimpressed
The headline of Dow +195 will look good in mainstream media if it can hold, but the market is still in a longer term downtrend and stuck in the middle of the range from the last 3 days.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQdQ36capjI/AAAAAAAADDw/fcY7dmaDGW4/s400/unimpressed.png
Posted by Brian at 10/28/2008 01:48:00 PM
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Trade Video
I uploaded a video of a trade from this morning in QID, I also gave some information on how to read and use Level 2. You can view the video on the bonus tab of the BOOK SITE Remember to use lower case when logging in with the username and password on page 184.
Posted by Brian at 10/28/2008 12:26:00 PM
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New Lows Coming?
2890 seems to be finding buyers again, but the more times support is tested, more likely it is to fail. The trend remains lower. The recent resistance near 3020 now has added significance with the location of the declining 5 DMA
http://1.bp.blogspot.com/_r_4bas-lh0U/SQcrTXQ27CI/AAAAAAAADDo/Umm2OH_xEYU/s400/newlows.png
Posted by Brian at 10/28/2008 11:09:00 AM
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Money Management
Money you don't lose is just as real as money that you win.
~Roy Cooke
Posted by Brian at 10/28/2008 06:55:00 AM
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Labels: quotes
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Monday, October 27, 2008S&P 500 (SPY)
could be headed for levels not seen since 1997 if it continues beyond the October 2002 low and that could come quickly.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQZHIroMpdI/AAAAAAAADDY/1_g1HvfVTmU/s400/7707.png
The chart of the Fed Funds was taken from the fine blog LOCKE ON STOCKS
http://4.bp.blogspot.com/_r_4bas-lh0U/SQcI1AwyeWI/AAAAAAAADDg/FsVMPvndiEw/s400/fedfunds.jpg
Posted by Brian at 10/27/2008 06:55:00 PM
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Pullback to VWAP
The Qs broke the trendline, but as I often point out, a break of trendline only tells us that the rate of change has slowed, it does not assure a reversal. The market is now trying to find support just above the daily VWAP and it will have to hold here if buyers are gouing to try to turn it in the final hour. THe 5 DMA continues to decline so if a rally does materialize it should not be trusted for anything more than a daytrade.
http://1.bp.blogspot.com/_r_4bas-lh0U/SQYLhGcEaII/AAAAAAAADDI/lwvP-P9aKDo/s400/pullbackvwap.png
Posted by Brian at 10/27/2008 02:38:00 PM
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Slowly Improving
The downtrend line of the last week remains intact, but today's action is showing a constructive pattern above the daily VWAP.
http://1.bp.blogspot.com/_r_4bas-lh0U/SQXzNB65E9I/AAAAAAAADC4/_7KLm_aKD1w/s400/improve.png
Posted by Brian at 10/27/2008 12:56:00 PM
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Quiet Trading
so far this morning. It will be important for short term support just under 2890 to hold if the market can build strength for a push past the downtrend line. A break below could lead to a test of the Friday levels. The 5 DMA is declining which means a turn higher is not likely for more than a short term event.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQXQZmOB7LI/AAAAAAAADCw/i7I7JaskcYM/s400/quiet.png
Posted by Brian at 10/27/2008 10:29:00 AM
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Still Below Trendlines
very choppy trading. What would happen if those trendlines do not hold on the next test? Be prepared either way.
http://2.bp.blogspot.com/_r_4bas-lh0U/SQIWpyrKGaI/AAAAAAAADCY/0o6qcEUReRo/s400/choppy.png
Posted by Brian at 10/24/2008 02:40:00 PM
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Friday, October 24, 2008More Weakness?
Taking out the mid day low near 2930 could lead to a test of the lows.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQIG2U7hwfI/AAAAAAAADCQ/CCsFWJEeBtY/s400/loweragain.png
Posted by Brian at 10/24/2008 01:32:00 PM
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Not Yet
If there is a reversal that will hold it is not yet evident.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQH23hiJGBI/AAAAAAAADCI/sc-CdUWM-ZI/s400/careful.png
Posted by Brian at 10/24/2008 12:24:00 PM
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Up To The Trendline
http://3.bp.blogspot.com/_r_4bas-lh0U/SQHtCytYg2I/AAAAAAAADCA/7IH2rwai-JM/s400/nicerun.png
Strength is impressive, consolidate under trendline then higher? Raise stops on any longs.
Posted by Brian at 10/24/2008 11:42:00 AM
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Hard To Trust
But the market is back above the 1 & 2 day VWAP.***CORRECTION it is NOT above 2DAY VWAP**** Be very careful.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQHnqfuCADI/AAAAAAAADB4/w6DdJz3A474/s400/corrected.png
Posted by Brian at 10/24/2008 10:56:00 AM
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Limit Down
Futures are down as low as they are allowed to go in the pre-market. Hopefully you are short or in cash. I have been stressing going home in cash and there will be some incredible trading opportunities for those who are liquid
http://1.bp.blogspot.com/_r_4bas-lh0U/SQHCmtmbrNI/AAAAAAAADBg/XP3e89NVyWw/s400/cmelimits.png
Here is the CME LIMIT GUIDE
Here are the charts from 1929
I think the levee broke.
I will not be answering emails today and posts will be sporadic.
Posted by Brian at 10/24/2008 08:33:00 AM
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Labels: trade limits
Results
Results happen naturally when motivation is pure.
~Unknown
Posted by Brian at 10/24/2008 06:38:00 AM
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Labels: quotes
Thursday, October 23, 2008Stock Market Trend Analysis Video 10/23/08
http://2.bp.blogspot.com/_r_4bas-lh0U/SQDfHwyU-uI/AAAAAAAADBY/BYJ0mOfIfME/s400/102308close.png
Posted by Brian at 10/23/2008 04:31:00 PM
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Buyers Are Trying
To push it higher into the close, so far their efforts are falling short. Keep a close eye on it, there is some volume coming with the buying.
http://3.bp.blogspot.com/_r_4bas-lh0U/SQDOQpzW0GI/AAAAAAAADBQ/mQ1DVr72seo/s400/tryin.png
Posted by Brian at 10/23/2008 03:18:00 PM
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When Is It
going to take the lows out? Seems Imminent
If they keep on selling, support is gonna break...
http://2.bp.blogspot.com/_r_4bas-lh0U/SQC8ccD6K_I/AAAAAAAADBI/jTKLQNJcHeg/s400/break.png
If it keeps on rainin, levees goin to break,
If they keep on sellin, support is goin to break
If it keeps on rainin, levees goin to break,
If they keep on sellin, the market’s goin to crash
When the levee breaks Ill have no place to stay.
When the market breaks, Investors have no cash to play
Mean old levee taught me to weep and moan,
Mean old market taught investors to weep and moan
Lord, mean old levee taught me to weep and moan,
Lord, mean old market taught investors to weep and moan
Got what it takes to make a mountain man leave his home,
Got what it takes to make a CEO lose his vacation home
Oh, well, oh, well, oh, well.
Dont it make you feel bad
NO
When youre tryin to find your way home,
When youre tryin to afford your retirement home
You dont know which way to go?
You don’t know which way to go?
If youre goin down south
If youre in NY, your sellin stocks
They go no work to do,
They got no bids for you
If you dont know about chicago.
If youre in Chicago, your sellin ES and NQ
Cryin wont help you, prayin wont do you no good,
Now, cryin wont help you, prayin wont do you no good,
Cryin wont help you, prayin wont do you no good,
Now, cryin wont help you, prayin wont do you no good,
When the levee breaks, mama, you got to move.
When the market breaks, mama you gotta be short
All last night sat on the levee and moaned,
All this mornin watched support and longs moaned
All last night sat on the levee and moaned,
All this morning watched the longs puke
Thinkin bout me baby and my happy home.
Thinking bout my QID and my happy home
Going, gon to chicago,
Gon to chicago,
Sorry but I cant take you.
Going down, going down now, going down.
Going down, going down now, going down.
MANAGE RISK!
Posted by Brian at 10/23/2008 02:01:00 PM
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Thursday, October 23, 2008More Choppy Action
with a continued downward bias.
http://2.bp.blogspot.com/_r_4bas-lh0U/SQCj2nUN2BI/AAAAAAAADBA/q4IPOmKZJok/s400/th.png
Posted by Brian at 10/23/2008 12:18:00 PM
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30.61
was the closing level on the Powershares QQQ Trust (QQQQ) and the leveraged long Ultra QQQ (QLD). Useless fact but interesting.
http://4.bp.blogspot.com/_r_4bas-lh0U/SQB0eB_d4hI/AAAAAAAADA4/bE4Vi0jvcAU/s400/3061.png
Posted by Brian at 10/23/2008 08:55:00 AM
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Know Thyself
Many bad players will not improve because they cannot bear self-knowledge
~David Mamet
Posted by Brian at 10/23/2008 06:37:00 AM
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Labels: quotes
Wednesday, October 22, 2008Stock Market Video Trend Analysis 10/22/08
http://4.bp.blogspot.com/_r_4bas-lh0U/SP-JkxIrsNI/AAAAAAAAC_c/wwnjx04nE3Y/s400/102208close.png
These videos are worth giving your email for a free look.
http://ino.directtrack.com/42/3096/205/
Posted by Brian at 10/22/2008 04:13:00 PM
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Lower Highs, Lower Lows
30.20 **CORRECTION 30.30** is daily S2 it has POTENTIAL (a level to be aware of, not to take action at) to slow this down.
http://1.bp.blogspot.com/_r_4bas-lh0U/SP97isP9RoI/AAAAAAAAC_U/Yd6CeinMYgc/s400/LHLL.png
Posted by Brian at 10/22/2008 03:13:00 PM
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Trends
Today has been a choppy session as the market has held below prior support near 3170. The inability to recapture that level puts the risks of further breakdown greater. The bounce this morning occurred at 61.8% retracement level from the low last Thursday to the Friday high. If that level fails this afternoon it could lead to a move down towards 30.
http://1.bp.blogspot.com/_r_4bas-lh0U/SP9gECNDCcI/AAAAAAAAC_M/0a4riA36-pg/s400/trend.png
Posted by Brian at 10/22/2008 01:16:00 PM
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Mixed Messages
Although the market is holding above VWAP for the day, the potential for resistance near 31.70-32.00 (prior support and location of declining 5DMA) make a failure more likely than a reversal.
http://2.bp.blogspot.com/_r_4bas-lh0U/SP9BHudKppI/AAAAAAAAC_E/zLEkBu360Vg/s400/5dma.png
Posted by Brian at 10/22/2008 11:00:00 AM
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Bear Markets
Excerpt from MY BOOK
OK, the market’s headed south. What next? You need to be able to balance your natural sense of hope with the reality of what a chart is objectively telling you and learn to respect the destructive power a downtrend can exert on your equity if you choose to fight the trend. In addition, if you are uncomfortable with selling short, or opposed to it for some personal reason, you will be at a severe disadvantage during a bear market.
Picking bottoms is the hardest job on Wall Street, and frankly, nobody rings a bell at the market bottom. Yet for some reason there seems to be an attraction to declining prices among most participants. Natural human optimism and learned behavior of hunting for bargains in a retail environment provides a “slope of hope” along which stage four stocks decline, crushing the dreams and finances of bewildered longs in its path.
We have all experienced the helpless feeling of searching every news source for a shred of bullishness to justify holding onto a stock in the face of declining prices. This fruitless action only delays the inevitable recognition of truth. It does not delay your losses. It is said that “it is better to be in cash wishing you were in a stock than it is to be in a stock and wishing you were in cash.” This is perhaps never truer than the point at which you are “foraging” for a reason to continue on a course that offers little promise.
For long participants, the stage 4 decline is marked by two brands of fear:
-Fear that the stock’s descent will continue to wipe out their equity (a good fear to have as it may portend a proper action into cash).
-Fear of feeling stupid for selling “the loser” at a point just before the stock turns higher (a bad fear to have). Do not fall prey to the short-term pauses in a primary downtrend; the short term action will typically be resolved in the direction of the larger, more powerful trend of the longer timeframe.
For short sellers, greed plays a role in a declining stock as they salivate at the increasing equity of their account balances. Short sellers are not immune to fear in a primary downtrend. Short term rallies can come suddenly and quickly in a downtrend and the fear of evaporating profits motivates short sellers to buy. There seems to be a general mistrust of the shorting process and, as such, they are often very quick to cover their positions at the very first sign of any short-term strength.
I tend to be very quick to cover short positions because some of the strongest rallies can occur in a downtrend. Holding a short in the face of such an advance can lead to quick and dramatic losses. I would rather cover my position with a profit and stand aside during short-term, and often violent, rallies and then re-enter the position as the stock begins to weaken again. It is my experience that short-term counter trend moves in a primary downtrend can occur so suddenly that trading short is more difficult than long.
Because of the greater volatility in a bear market, shorts generally should be traded more aggressively than longs would be in a bullish environment. When a stock experiences the short-term declines that a short seller targets, there can be terrific opportunities for profits as bids thin out from market makers unwilling to take meaningful inventory and from fearful long holders liquidating in a panic mode.
For a stock in a confirmed downtrend, the rallies are generally feeble, low-volume moves that quickly fail as more frustrated buyers come to the realization that a bottom has not been found. A weak stock is similar to a boxer who continues to stand up to his opponent after repeatedly getting knocked down. The stubborn fighter will ignore the chant of his trainer to “stay down,” much the same as buyers keep coming back to the stock hoping to catch the bottom. These participants ignore the shouts of the market to stay away. Yes, the market does “shout” to us, and the screams are represented by the declining moving averages. When a stock experiences a short-term rally, it finds a renewed source of supply at a level which is lower than the last time the sellers took control; this action is represented by the lower highs on the chart. And, of course, a lower low is created as long holders sell out in disgust as they realize they were unable to correctly make their purchases at “the low.” See how interconnected this all is?
Posted by Brian at 10/22/2008 09:24:00 AM
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Labels: book excerpt
Being A Hero
Being a hero is about the shortest-lived profession on Earth.
~Will Rogers
Posted by Brian at 10/22/2008 06:45:00 AM
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Afternoon Rally?
if market can hold above VWAP, it may get going.
http://3.bp.blogspot.com/_r_4bas-lh0U/SP4jgW7xNJI/AAAAAAAAC-0/efFTLxkfOIo/s400/aftnoonrally.png
Posted by Brian at 10/21/2008 02:46:00 PM
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SPY Outperforming
SPY has been performing better and is back above daily VWAP at 97.95, VWAP on Qs is ~32.46
Posted by Brian at 10/21/2008 02:18:00 PM
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5DMA Resistance
http://4.bp.blogspot.com/_r_4bas-lh0U/SP4UETICfmI/AAAAAAAAC-s/qLCkxEESXhQ/s400/mixed.png
WHen there are mixed messages from mutiple timeframes, defer to the larger timeframe and manage risk accordingly.
Posted by Brian at 10/21/2008 01:37:00 PM
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A Mess
The market remains a mess, once the daily VWAP broke it acted as resistance and now we are headed lower again. For Jeffrey I will repeat "risks are high" in ALL stocks.
http://4.bp.blogspot.com/_r_4bas-lh0U/SP36puRKqgI/AAAAAAAAC-k/Xep9a7gNJCg/s400/mess.png
Posted by Brian at 10/21/2008 11:51:00 AM
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A Suggestion
Email from a reader
This market is obviously high risk and the QQQQ is even higher risk yet you prefer to monitor the QQQQ most closely and advise your readers to manage risk and be defensive...
Why don't you steer more towards "blue chips" or blue chip indexes?
Thanks,
Jeffrey
blue chips??
like GE, GM, MSFT, IBM?
everything is risky in a bear market
you would be surprised how few people acknowledge/ respect the risk......based on emails
thanks
Brian
Posted by Brian at 10/21/2008 11:03:00 AM
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My Stop
is below 32.80 I plan to raise it aggressively as market action dictates.
http://3.bp.blogspot.com/_r_4bas-lh0U/SP3qfsZptII/AAAAAAAAC-c/7XibRFV6e2A/s400/stop.png
Posted by Brian at 10/21/2008 10:42:00 AM
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Bullish Action
The net change on the day may be lower, but it is bullish that the Qs have been able to stay above the daily VWAP and the 5DMA. If the market can pullback (towards VWAP) and make another push above yesterday's high, it could clear the way for a push above 34.00. The morning lows will be important. Remember that the primary trend is lower and risks still remain high, trade defensively and with smart position sizing.
http://4.bp.blogspot.com/_r_4bas-lh0U/SP3mBpmmEKI/AAAAAAAAC-U/XfqF7CGcvMI/s400/buyers.png
Posted by Brian at 10/21/2008 10:12:00 AM
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Future
We should all be concerned about the future because we will have to spend the rest of our lives there.
~C.F.Kettering
Posted by Brian at 10/21/2008 06:55:00 AM
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Trendlines
If the market can break past these trendlines we could be in for a good afternoon rally. Manage Risk!
http://1.bp.blogspot.com/_r_4bas-lh0U/SPzWPKhyBPI/AAAAAAAAC-E/knAz24uhOdg/s400/trendlines.png
Posted by Brian at 10/20/2008 03:03:00 PM
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Improving
The markets have been back and forth all day but are generally acting good. It remains a choppy environment with the S&P behaving better than the Nasdaq.
http://3.bp.blogspot.com/_r_4bas-lh0U/SPzFV-dVavI/AAAAAAAAC98/RHfTPXkBqCs/s400/maybe.png
Posted by Brian at 10/20/2008 01:52:00 PM
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Choppy
The Nasdaq has been unable to recapture the declining 5 DMA and it is back below the daily VWAP as well. I do not have a strong short term feeling about direction, but the primary trend remains lower.
http://4.bp.blogspot.com/_r_4bas-lh0U/SPy38ObJaZI/AAAAAAAAC90/iAv7KE8Y8V0/s400/5dma.png
Posted by Brian at 10/20/2008 12:55:00 PM
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Bernanke,
Paulson, Bush, etc. should keep their mouths shut, everytime they speak the market seems to sell off. Mkt deteriorating quickly. Looks like we will continue to experience high volatility which means it remains a daytrade environment.
Posted by Brian at 10/20/2008 10:13:00 AM
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Cautiously Long
There are 2388 stocks up and just 450 lower on the day which helps support a bullish case in the short term. The Qs continue to battle with the 5 DMA and if they can take out Friday's high there could be more significant upside.
http://3.bp.blogspot.com/_r_4bas-lh0U/SPyPE5TdXKI/AAAAAAAAC9s/oVwHdlW2GIM/s400/mon.png
Posted by Brian at 10/20/2008 09:57:00 AM
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Challenge
When people keep telling you that you can't do a thing, you kind of like to try it.
~Margaret Chase Smith
Posted by Brian at 10/20/2008 06:15:00 AM
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Labels: quotes
Friday, October 17, 2008Stock Market Video Analysis 10/17/08
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Posted by Brian at 10/17/2008 04:46:00 PM
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Warren Buffett
is "the world's greatest investor" and when he starts buying stocks in his personal account that is definitely worth noting. I do not think that Mr. Buffett's intent was to call "the bottom", for he is a patient investor who expects there to be volatility. I am not going against Mr. Buffett or making a market call, only bringing to light the similarities of the 1929 chart and the current Dow chart. We remain in a bear market and you cannot let your guard down for any reason whatsoever. If prices continue higher, raise your stops on longs. If prices start to decline do not be a fool and hold on just because it is the popular thing to do.
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Posted by Brian at 10/17/2008 11:50:00 AM
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Labels: historical charts
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Friday, October 17, 2008Slow Going
The Qs continue to battle with the 5 day moving average the inability to decisively recapture that level gives reason for concern. On a short term bullish note, the market is holding above the daily VWAP. Risks remain high, listen to price action and manage risk. I have some appointments today and will not be updating with much frequency.
http://2.bp.blogspot.com/_r_4bas-lh0U/SPih5lOJFMI/AAAAAAAAC9M/ctrf8loUvqI/s400/5day.png
Posted by Brian at 10/17/2008 10:30:00 AM
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Politics
How can a president not be an actor?
~Ronald Reagan
Posted by Brian at 10/17/2008 06:19:00 AM
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Labels: quotes
Thursday, October 16, 2008Double Bottom in Nasdaq? Video Review 10/16/08
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Here is the referenced info on the DOUBLE BOTTOM pattern.
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Posted by Brian at 10/16/2008 04:16:00 PM
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VWAP Since 10/9 Breakdown
The Qs broke past the 2 day VWAP and are now just below the VWAP from the breakdown that began last Thursday. Reclaiming this level and the declining 5 DMA could lead to further strength. RISKS REMAIN HIGH
http://4.bp.blogspot.com/_r_4bas-lh0U/SPeTucSxk-I/AAAAAAAAC88/RGvyDS1vSEw/s400/oct9vwap.png
Posted by Brian at 10/16/2008 03:18:00 PM
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Choppy Action
Maybe it can get going. The 2 day VWAP has held it back so far and the primary trend remains lower so tight stops if you are trading long.
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Posted by Brian at 10/16/2008 01:57:00 PM
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Bounce
The October 10 intraday low in the Qs was undercut and the market has bounced back above the daily VWAP. The primary trend is still lower and risks remain high.
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Posted by Brian at 10/16/2008 11:53:00 AM
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Another Look at 1929
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Posted by Brian at 10/16/2008 10:33:00 AM
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Headed For Lows?
back below the daily VWAP. Volatility is huge which means to be prepared for anything, I'm slowing down a bit in here. We could be headed for a flush.
http://1.bp.blogspot.com/_r_4bas-lh0U/SPdLAaaaaKI/AAAAAAAAC8M/ytnboVU3P8M/s400/test.png
Posted by Brian at 10/16/2008 10:07:00 AM
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Here's How I'm Trading Today
Very aggressively.
Looks like it is turning lower again.
http://2.bp.blogspot.com/_r_4bas-lh0U/SPdI02chBYI/AAAAAAAAC8E/YfJGr1tnHlY/s400/daytrade.png
Posted by Brian at 10/16/2008 09:47:00 AM
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Labels: trades
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Wednesday, October 15, 2008Presidential Election Risk Management
Whether you are a died in the wool Republican or Democrat really doesn't matter to the markets. On September 5th the McCain contract broke above a CUP AND HANDLE formation (point 1 on the chart below) and I suggested that the trend was "innocent til proven guilty." Eleven days later I posted that it was time to take PARTIAL PROFITS (point 2 on the chart below) and to raise the stop on the balance of any remaining long position. I didn't trade this market, but it is no different than any market.
Whether you trade stocks, futures, currencies, or political contracts, the markets do not care what you think. The number on job of a trader of any contract is RISK MANGEMENT! To the markets, where people risk their money, the next President of the United States is clear and it will take something dramatic and unexpected to turn the market in a different direction.
As a trend trader, regardless of which market I trade, I put my feelings aside and try to figure how I can exploit the current market psychology to put some money in my pocket.
http://3.bp.blogspot.com/_r_4bas-lh0U/SPaYgHGec5I/AAAAAAAAC78/mwA8g7UoiP8/s400/riskmgt.bmp
Posted by Brian at 10/15/2008 09:25:00 PM
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Labels: election, politics
Stocks Smashed Again Video 10/15/08
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Posted by Brian at 10/15/2008 04:16:00 PM
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I would not suggest holding long positions
Posted by Brian at 10/15/2008 02:55:00 PM
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Gap Filled
The gap from Friday's close (31.32) has been filled and the Qs are trying to hold at S2 (horizontal yellow line) If they can rally (and ther is no evidence they will) this is the final logical area where one could materialize today.
http://3.bp.blogspot.com/_r_4bas-lh0U/SPY0GXotyJI/AAAAAAAAC7s/naCXMSwiBl4/s400/S2.png
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Posted by Brian at 10/15/2008 02:11:00 PM
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Mixed Messages
but the primary trend is lower which means the market is guilty until proven innocent. This video explains further.
Posted by Brian at 10/15/2008 11:51:00 AM
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Monday's low
THe Nasdaq 100 (QQQQ) is trying to hold above the low from Monday. Below that level the next level of focus will be the .618 retracement (near 32) of the Friday low to yesterday's high. Below 32 the market could test the lows and maybe make a lower low. Stay very defensive. It will take something dramatic and unexpected to turn the market higher.
http://2.bp.blogspot.com/_r_4bas-lh0U/SPYI9bZk3hI/AAAAAAAAC7k/JOYKaswWub0/s400/monlows.png
Posted by Brian at 10/15/2008 11:10:00 AM
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Rangebound
here, the inability to bounce concerns me but holding the 5DMA gives me hope...mixed messages. I don't think we get a tradable move until the range of 3270 and 3320 is broken. Sidelines for now.
Posted by Brian at 10/15/2008 10:25:00 AM
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How To Avoid Whipsaws
If you have good risk management skills and the discipline to implement a plan, there is no avoiding getting whipsawed in a volatile market. Not every trade will be a winner. The market continues to search for support at the 5 dma and i will remain focused on a long reversal trade as long as the morning lows hold. If the morning lows break we could be in for a more severe selloff.
http://3.bp.blogspot.com/_r_4bas-lh0U/SPX6iecq0FI/AAAAAAAAC7c/mY7kSn6ZaMw/s400/whipsaw.png
Posted by Brian at 10/15/2008 10:11:00 AM
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Wednesday, October 15, 20085 Day Moving Average
The Qs are attempting to stabilize above the 5 DMA. This is not a reason to buy, it is a reason to look at shorter timeframes for evidence that the market is actually starting to turn. With the Qs below the declining daily VWAP we need to see a move above that daily benchmark at a minimum before any purchases can be considered low risk. If the Market can make it up towards 3305 I would consider purchasing with a stop near 32.80. This is a very high risk trade setup.
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Posted by Brian at 10/15/2008 09:55:00 AM
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Opportunity
Opportunity is missed by most people because it is dressed in overalls and looks like work.
~Thomas A Edison
"And so castles made of sand fall in the sea, eventually" ~ Jimi Hendrix
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Posted by Brian at 10/15/2008 06:46:00 AM
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Tuesday, October 14, 2008Stocks Technical Analysis Video 10/14/08
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Here is a HIGH RESOLUTION video of today's action.
Stock Market Video 10/14/08 from brian shannon on Vimeo.
Posted by Brian at 10/14/2008 04:13:00 PM
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Bear Market Rallies
are risky and there is no telling if we will see new lows or if buyers will show up near the 5DMA but it is coming into range quickly. There is no point buying at the 5DMA, it is just a location of POTENTIAL support. The correct approach is to analyze the shorter term timeframes for evidence that there is ACTUAL support. Do not lose sight of the fact that we are in a bear market. You should print a copy of THESE CHARTS and refer to them for perspective.
http://1.bp.blogspot.com/_r_4bas-lh0U/SPTlft7oNVI/AAAAAAAAC7E/6ywztPtt7u4/s400/5dma.png
Brian,
Had $3600 in profits yesterday, trading very conservatively off your system.
Your book, website and videos are great, and the tiny updates you make during the day are dead on.
The techniques in the book are really simple, which is the best part---it's worth at least 5x its price. (No one would ever pay that, though, probably).
I keep mentioning your book on the trading site, and mention the book and your website to traders I meet.
I've traded for 10 years, used lots of indicators and read lots of books, but never realized how simple trading could be, nor the potentials for consistent profit.
Whatever I can do to pay you back for the all the great information, through referring people to your site and to your book, or otherwise, please let me know. I'll happily write a testimonial. Your book has changed everything for me.
Sincerest thanks,
Shaun
Thanks Shaun, this is a testimonial.
Brian
Posted by Brian at 10/14/2008 02:20:00 PM
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Consolidating
between the 1 and 2 day VWAP
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Posted by Brian at 10/14/2008 12:32:00 PM
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Gaps In A Downtrend
Should never be trusted. The Qs have been stuck under daily VWAP since the open and this market could have further weakness coming. I would not be surprised to see a test of the 5DMA over the next couple of days.
http://3.bp.blogspot.com/_r_4bas-lh0U/SPSuOFlYkGI/AAAAAAAAC60/JLgJoTeobEQ/s400/tuesday.png
Posted by Brian at 10/14/2008 10:34:00 AM
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Backup Plan
The most successful people are those who are good at plan B.
~James Yorke
Posted by Brian at 10/14/2008 06:42:00 AM
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Labels: quotes
Monday, October 13, 2008Even More Strength
At 4:15 Eastern, the futures close down for 15 minutes and then the evening session begins. Since the futures reopened, they have added another 3% with their current price of 1046.25.
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Posted by Brian at 10/13/2008 08:29:00 PM
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Stock Market Technical Analysis 10/13/08
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Post from THIS MORNING
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Posted by Brian at 10/13/2008 04:18:00 PM
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Labels: trend pattern
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Monday, October 13, 2008Final Hour Push?
It wasn't meant to be a roadmap, but so far pretty good. My opinion remains that it is a daytrading environment and with the gap we got today I will not be holding any long positions overninght, regardless of how they close.. The Qs could continue to rally up towards daily R2 near 34.15. Final post til after close.
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Posted by Brian at 10/13/2008 02:53:00 PM
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Lower Low
on the one minute timeframe, protect profits. The market could be headed down towards VWAP near 33.10 This might be the afternoon shakeout I mentioned this morning.
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Posted by Brian at 10/13/2008 01:54:00 PM
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Uptrend Still Intact
but the one minute chart is quite extended, DEFENSE.
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Posted by Brian at 10/13/2008 12:55:00 PM
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Squeeze is on
protect profits, a mid day pullback towards the 5 DMA (near 32.80) would not be unreasonable.
http://4.bp.blogspot.com/_r_4bas-lh0U/SPN0nQylYqI/AAAAAAAAC5s/tdzkXcxUNZo/s400/protect.png
Posted by Brian at 10/13/2008 12:13:00 PM
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Was that the Shakeout?
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Posted by Brian at 10/13/2008 10:27:00 AM
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Stocks
are backing away from the declining 5 DMA and the stop I suggested on the Qs has been hit. As long as the daily VWAP is declining it is best to err on the side of caution.
http://3.bp.blogspot.com/_r_4bas-lh0U/SPNXC8kyuiI/AAAAAAAAC5c/9R6VK-pgCX8/s400/5dma.png
Posted by Brian at 10/13/2008 10:09:00 AM
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Fairly Common Pattern
of trading on a day like today looks like the crude drawing below. The market gaps higher, experiences a little shakeout, continues to rally and then churns midday. The midday churn sucks in a lot of short sellers, particularly on a 1-1:30 pullback below the daily VWAP. If the market rallies back above VWAP there is often a strong continuation into the close as short sellers scramble to repurchase shares they sold lower.
This is not meant to be a blueprint of how to trade today, it is just one scenario which I have noticed on these type of days. LISTEN TO THE MARKET and manage risk, the primary trends are still lower.
http://2.bp.blogspot.com/_r_4bas-lh0U/SSrFu9pCuhI/AAAAAAAADQ8/wW3XFw70HVc/s400/trendday.PNG
Posted by Brian at 10/13/2008 09:08:00 AM
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Labels: trend pattern
Bank Bailouts Effect and The 5 DMA
The Qs are trading above Friday's high of 32.48 and are just below the DECLINING 5 day MA at ~32.86. From the Friday low of 29.38 to this morning's high of 33.17, the Qs have experienced a rally of 12.9%. Do not let your confidence move with prices, instead become more defensive. Selling a portion of any longs early this morning makes sense, then your job is to manage risk on the balance. I think an initial stop could go below the low of 32.53 (this morning's low) maybe near 32.48 to give it a little extra room. If the market continues to display strength, keep raising stops and hold the balance until the market tells you to get out, not at levels that you perceive to be important. It is highly unlikely that I will hold any long positions overnight tonight.
If you are looking for a short entry, wait for price confirmation, don't just blindly sell short into the strength.
http://1.bp.blogspot.com/_r_4bas-lh0U/SPM-sh7RrMI/AAAAAAAAC5M/kmybj9k6SXQ/s400/qs.png
Posted by Brian at 10/13/2008 08:24:00 AM
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Accountability
The world is a dangerous place, not because of those who do evil, but because of those who look on and do nothing.
~Albert Einstein
My friend Gal has an excellent news aggregation service which I like to look at for BUSINESS NEWS
.
Posted by Brian at 10/13/2008 06:39:00 AM
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Sunday, October 12, 2008Gapping Up
Let's see if they can hold during the overnight session. Do not look at a rally as anything other than a bounce within a primary downtrend.
http://2.bp.blogspot.com/_r_4bas-lh0U/SPKCSBW13CI/AAAAAAAAC48/xsTm2QnHouE/s400/3.28.png
Posted by Brian at 10/12/2008 07:03:00 PM
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Saturday, October 11, 2008Some Historical Bear Market Perspective
Dow Jones October 1929
Over a 23 day period, the Dow lost 49% of its value, but that was just the start of the bear market during which the Dow would eventually lose 89% of its value (386.10 to 40.56). How many people do you think called the October 1929 low of 195 "the bottom" only to get decimated by the continued weakness over the next 3 years? We remain in a bear market and ALL rallies should be treated as guilty until proven innocent, meaning you need to maintain a super strong defense. Do not be too quick to call Friday's low "the bottom", there are serious flaws in our economic system and a lot of closets with ugly contents are still being opened.
http://2.bp.blogspot.com/_r_4bas-lh0U/SPCeBw2UsxI/AAAAAAAAC4M/ycrC-PuXE9Y/s400/1929CrashChart.png
Dow Jones 1929-1933
Notice how insignificant October 1929 becomes when viewed on a larger timeframe.
http://4.bp.blogspot.com/_r_4bas-lh0U/SPCe7aaUc7I/AAAAAAAAC4s/hAPihYQxc1Y/s400/29to32percentchart.PNG
Dow Jones October 1987
http://4.bp.blogspot.com/_r_4bas-lh0U/SPCeLmBjlaI/AAAAAAAAC4c/P_mZ42SjiDQ/s400/1987chart.png
S&P 500 (SPY) 2000-2003
http://4.bp.blogspot.com/_r_4bas-lh0U/SPCfCEF10HI/AAAAAAAAC40/abQpEJVneec/s400/SPYbear00to03.png
http://2.bp.blogspot.com/_r_4bas-lh0U/SUwumEOrFeI/AAAAAAAADbg/ZlBS7TgzJlk/s400/spyrallydecline08update.PNG
Posted by Brian at 10/11/2008 08:36:00 AM
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Labels: historical charts
Friday, October 10, 2008Stock Market Video Trend Analysis 10/10/08
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Posted by Brian at 10/10/2008 04:22:00 PM
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Qs Headed To 5DMA?
History suggests that the market should gap higher on Monday. THe 5DMA on Qs is ~32.80
Posted by Brian at 10/10/2008 03:33:00 PM
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http://1.bp.blogspot.com/_r_4bas-lh0U/SO-qKExbcDI/AAAAAAAAC38/bQ946FBNWIY/s400/held.png
Posted by Brian at 10/10/2008 03:16:00 PM
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Return To Lows
The lows have been tested on a lower volume move, will they hold? The trend is lower. Tight Stops.
http://2.bp.blogspot.com/_r_4bas-lh0U/SO-Y2cuHuXI/AAAAAAAAC30/waRpqMjIraQ/s400/scene.png
Posted by Brian at 10/10/2008 02:01:00 PM
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Still Very Dangerous
Sellers defended VWAP, still no signs of a turn.
http://1.bp.blogspot.com/_r_4bas-lh0U/SO-RfjWdZ7I/AAAAAAAAC3s/KdSc45QLfpo/s400/trouble.png
Posted by Brian at 10/10/2008 01:31:00 PM
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Making Some Progress
It is looking more encouraging as the markets test VWAP. Being able to climb and then stay above VWAP could prove to be very bullish in the short term. Risk Management is job #1!
http://4.bp.blogspot.com/_r_4bas-lh0U/SO-HI5Nn9fI/AAAAAAAAC3k/DfCgk4SbFVs/s400/progress.png
Posted by Brian at 10/10/2008 12:43:00 PM
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Retracements
the markets (Q's and SPY) have held above .618 retracements but they are both below daily VWAP at this point. A break below 10:44 AM low could set up test of lows.
Quick Scalp In QLD from brian shannon on Vimeo.
http://4.bp.blogspot.com/_r_4bas-lh0U/SO9u_CsmSaI/AAAAAAAAC3c/6QqIXRlDKzA/s400/fibvwap.png
Posted by Brian at 10/10/2008 10:55:00 AM
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SPY vs Obama
Is a market crash good for Obama?
Or is Obama popularity bad for the stock market?
Rhetorical questions, I will not answer any emails regarding politics.
http://2.bp.blogspot.com/_r_4bas-lh0U/SO9NPAEMjqI/AAAAAAAAC3U/-tfTYY2dOxs/s400/SPX+vs+Obama.gif
chart from a reader, thanks Asaf.
Posted by Brian at 10/10/2008 08:34:00 AM
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Responsibility
No snowflake in an avalanche ever feels responsible.
~Voltaire
Posted by Brian at 10/10/2008 06:32:00 AM
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Labels: quotes
Thursday, October 09, 20083.5% That is How Far
The S&P 500 futures are down right now. The Nikkei is down 10.7%! Where is the bottom, fortunes will change hands tomorrow.
http://4.bp.blogspot.com/_r_4bas-lh0U/SO7Cx5g0xNI/AAAAAAAAC3E/_MoT2jvAizQ/s400/3.5.png
I feel fine because I go home in cash each evening.
Posted by Brian at 10/09/2008 10:43:00 PM
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Washout Tomorrow?
The S&P 500 futures are trading more than 2% lower this evening. Who is left to sell? Seriously, are people that stubborn, is their risk management really that bad that they decide to sell now? Think of all all the buy and hold investors who were scammed by Wall Street, it really is a shame. Rest up for another busy session tomorrow. Will they ever turn? When they do it should be violent and quite possibly insanely profitable for those who engage at the right time.
http://2.bp.blogspot.com/_r_4bas-lh0U/SO6lCbQAtoI/AAAAAAAACI4/GerqKsOCeCU/s400/es.png
Posted by Brian at 10/09/2008 08:31:00 PM
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Stock Market Trend Analysis 10/9/08
Look at those percentage moves!
http://3.bp.blogspot.com/_r_4bas-lh0U/SO5l8vyUYJI/AAAAAAAACIw/ATZigcJ_dWs/s400/100908close.png
http://1.bp.blogspot.com/_r_4bas-lh0U/RxkDVFQld5I/AAAAAAAAAds/B50o6bwQejE/s400/tuffbearanimated.gif
Posted by Brian at 10/09/2008 03:56:00 PM
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Melting Down
http://1.bp.blogspot.com/_r_4bas-lh0U/SO5YDTe_VUI/AAAAAAAACIo/QoYf0yEqiUY/s400/meltdown.jpg
Posted by Brian at 10/09/2008 03:13:00 PM
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Not Looking Good
No reason to be long
Posted by Brian at 10/09/2008 01:33:00 PM
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No Bounce
http://3.bp.blogspot.com/_r_4bas-lh0U/SO42f4Wj4II/AAAAAAAACIg/dNBiuINKQs4/s400/nobounce.png
Posted by Brian at 10/09/2008 12:48:00 PM
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Thursday, October 09, 2008Improving
but the buyers still haven't clearly gained the upper hand, particularly in the SPY which remains below the declining VWAP (currently ~98.30)
http://2.bp.blogspot.com/_r_4bas-lh0U/SO4ljOhdfwI/AAAAAAAACIY/wgFAEg_7x5A/s400/improving.png
Posted by Brian at 10/09/2008 11:21:00 AM
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SPY Lagging
right now. The Qs are battling the daily VWAP near 33.28 and SPY is starting to fall away from VWAP (near 99.58) again. Trading remains choppy and there is no clear evidence of a turn yet. Do not become blinded by potential upside targets based on historical studies, those are just a reference for possible scenarios. Only price pays and it hasn't given a clear signal to buy yet.
Posted by Brian at 10/09/2008 10:21:00 AM
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How Far Could a Rally Go?
From the high of 128.00 on 9/19/08 to yesterday's low of 96.81, the SPY has declined 31.19 points or 24.36% which is greater than the 18.85% average decline during the 2000-2003 bear market, but there were also two larger declines during that time SEE TABLE
The average bounce saw the market recover 73% of the average decline. IF yesterday was a low and IF the market saw a similar snapback rally, the SPY could be in for a rally up to ~ 119.51 (31.19 x.73= 22.7 points which is added to 96.81)
Job number one is to listen to the market and manage risk.
http://4.bp.blogspot.com/_r_4bas-lh0U/SO4HMIC7aNI/AAAAAAAACIQ/5GZc_czenhI/s400/spday.png
Posted by Brian at 10/09/2008 09:23:00 AM
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What to Believe
Believe nothing just because a so-called wise person said it. Believe nothing just because a belief is generally held. Believe nothing just because it is said in ancient books. Believe nothing just because it is said to be of divine origin. Believe nothing just because someone else believes it. Believe only what you yourself test and judge to be true.
~Buddha
Posted by Brian at 10/09/2008 06:29:00 AM
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Labels: quotes
Wednesday, October 08, 2008Bear Market of 2000-2003
During the 2000-2003 bear market, the SPY made 9 significant drives lower and 8 recovery rallies. The average decline was 18.85% and the average recovery rally was 17.40% which means the market recovered an average of 73.06% of the prior loss. The speed and magnitude of the rallies in a bear market are quite seductive, but being early is just not worth the losses.
These numbers are just averages, there are always outliers and the current decline is unprecedented at least in my 16 year trading experience. If you are attempting to latch onto a counter trend rally remember that it is a high risk strategy, you must wait for price to confirm a possible turn before getting involved and then manage risk. As we saw today, there were many reasons to think the market would reverse higher, but those reasons were quickly dismissed by the market as prices faded in the last hour. Do not stubbornly hold when the market tells you to sell as it did today, there is always tomorrow to try again if you still have your capital intact.
Notice the DIRECTION of the 200 day (40 week) MA, it did not turn higher until April/May 2003. As long as the 200 DMA is declining all rallies should be expected to fail.
http://1.bp.blogspot.com/_r_4bas-lh0U/SO1kFPGVfFI/AAAAAAAACII/PhkwKuMX1As/s400/2000to03.png
http://1.bp.blogspot.com/_r_4bas-lh0U/SO1j_5EWP0I/AAAAAAAACIA/Oo2VkF_QA_Q/s400/SPYbear00to03.png
See the 1929-1933 Dow Chart
Posted by Brian at 10/08/2008 09:51:00 PM
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Labels: historical charts
Stock Market Video Trend Analysis 10/8/08
http://3.bp.blogspot.com/_r_4bas-lh0U/SO0U8oLpAtI/AAAAAAAACHw/dZRF2pQuVxw/s400/100808numbers.png
Posted by Brian at 10/08/2008 04:15:00 PM
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DEFENSE WINS THE GAME!
Posted by Brian at 10/08/2008 03:49:00 PM
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Manage Risk
For me that means I will go home in cash (with the exception of a small Q calls position) once again. It is tempting to hold other stocks, but I would rather miss an opportunity than expose my equity to the many unknowns while primary trends remain lower.
Posted by Brian at 10/08/2008 03:38:00 PM
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Line In Sand
If it can hold above 2 day VWAP and Pivot (red horizontal line) it could set up a powerful afternoon rally. HIGH RISK
IF YOU ARE PARTICIPATING LONG, PLEASE REMEMBER STOPS THE TREND IS STILL LOWER
http://1.bp.blogspot.com/_r_4bas-lh0U/SO0APkPrI-I/AAAAAAAACHo/nBdLG1IBqQk/s400/hold.png
Posted by Brian at 10/08/2008 02:44:00 PM
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Wednesday, October 08, 20081929-32 Rallies
Historical perspective of bear market rallies.
http://2.bp.blogspot.com/_r_4bas-lh0U/SOz0oTSy1FI/AAAAAAAACHg/nwwjsjvbVWM/s400/29to32percentchart.PNG
Posted by Brian at 10/08/2008 01:56:00 PM
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Labels: historical charts
Massive Rally?
I do not want to encourage reckless purchases, if the market can get going here we could be in for a Massive rally. I am long QLD and Q calls I will likely only hold the Q calls regardless of what happens from here. RISK MANAGEMENT!!!
Posted by Brian at 10/08/2008 01:35:00 PM
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Battling VWAP
Can it finally turn? Trends all remain lower but maybe we've run out of sellers for a bit? Tight stops either way.
http://2.bp.blogspot.com/_r_4bas-lh0U/SOzpE7JEPYI/AAAAAAAACHY/tFPJnYGOkDM/s400/vwap.png
Posted by Brian at 10/08/2008 01:08:00 PM
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Volatility Remains Way Too High
for most people to be involved, trade smart.
http://1.bp.blogspot.com/_r_4bas-lh0U/SOzCUXa5QwI/AAAAAAAACHQ/7VJeK0bHpXY/s400/volatility.png
Posted by Brian at 10/08/2008 10:22:00 AM
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No Power
The Fed seems to have no power to stop a meltdown. There is no magic bullet. I hope you are not long. Wait for prices to tell you when/ if you should buy.
Here's another quote, this one is from Warren Buffet
"In the short run, the market's a voting machine and sometimes people vote very unintelligently. In the long run, it's a weighing machine and the weight of business and how it does is what affects values over time."
http://1.bp.blogspot.com/_r_4bas-lh0U/SOysh0_fKeI/AAAAAAAACHI/J3fyMtlzJQg/s400/powerless.png
Posted by Brian at 10/08/2008 08:49:00 AM
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"Surprise" Rate Cut
More important is the response of the market and the initial rally is beginning to fade. Take your cues from price action, not news headlines.
http://4.bp.blogspot.com/_r_4bas-lh0U/SOymPgPrvmI/AAAAAAAACHA/B6iOY7_uGAY/s400/surprise.png
Posted by Brian at 10/08/2008 08:22:00 AM
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Education
Education is a progressive discovery of our own ignorance.
~Will Durant
Posted by Brian at 10/08/2008 06:25:00 AM
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Labels: quotes
Tuesday, October 07, 20081929 vs Today
We are in a brutal bear market when and at what level it bottoms is only known by liars. Below are some charts from the 1929-1932 bear market and a current Dow chart. Do not get sucked into thinking it cannot go lower. It seems like the market is due for a bounce, but the evidence just isn't there yet.
http://4.bp.blogspot.com/_r_4bas-lh0U/SOwLETQMi2I/AAAAAAAACG4/86vGYylSMRo/s400/crash.bmp
http://3.bp.blogspot.com/_r_4bas-lh0U/SOwKwihiHuI/AAAAAAAACGo/mFoYt9iASxA/s400/25yrs.bmp
http://3.bp.blogspot.com/_r_4bas-lh0U/SOwK3pTGXDI/AAAAAAAACGw/vyb2dcqXPn4/s400/dowtoday.bmp
Posted by Brian at 10/07/2008 09:19:00 PM
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Labels: historical charts
Stock Market Trend Analysis 10/7/08
http://2.bp.blogspot.com/_r_4bas-lh0U/SOvC31hNtQI/AAAAAAAACGg/tJUuqHVhvCU/s400/100708close.png
Stock Market Video Analysis 10/7/08 from brian shannon on Vimeo.
Posted by Brian at 10/07/2008 04:18:00 PM
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Tuesday, October 07, 2008What Can He Say?
The Qs failed at VWAP and sellers have returned to the market again. Bernanke will be speaking soon and his words have the potential to be a catalyst for the market. Trends all remain lower. It continues to be a high risk environment.
http://2.bp.blogspot.com/_r_4bas-lh0U/SOuRpX7vPrI/AAAAAAAACGY/o5Yzxv3PnyM/s400/bernrabbit.PNG
Posted by Brian at 10/07/2008 12:42:00 PM
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Still Risky
We will now want to see the daily VWAP (near 34.65) hold as support if this market is going to make a continued move higher.
http://1.bp.blogspot.com/_r_4bas-lh0U/SOt1Yea-H0I/AAAAAAAACGQ/n4TVbNR-7h4/s400/1dayvwap.png
Posted by Brian at 10/07/2008 10:40:00 AM
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Important Level
THe Qs are holding above the TWO day VWAP right now and if they can hold above it then there is a chance that the market can regroup and rally. We remain in a primary downtrend and counter trend trading is risky.
http://1.bp.blogspot.com/_r_4bas-lh0U/SOtuEnsRKqI/AAAAAAAACGA/9Z3nSi6s2YU/s400/2dayvwap.png
Posted by Brian at 10/07/2008 10:09:00 AM
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Capabilities
If we did the things we are capable of, we would astound ourselves.
~Thomas Alva Edison
Posted by Brian at 10/07/2008 06:13:00 AM
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Labels: quotes
Monday, October 06, 2008Stock Market Video Technical Analysis 10/6/08
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Posted by Brian at 10/06/2008 04:20:00 PM
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Is It Real?
This rally feels like it is real (can continue) BUT risks remain VERY HIGH!
http://1.bp.blogspot.com/_r_4bas-lh0U/SOpkiElcDPI/AAAAAAAACFw/yPUgWhVyqSQ/s400/isitreal.png
I am still reluctant to be long for more than a daytrade.
Posted by Brian at 10/06/2008 03:13:00 PM
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Just An Observation
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Posted by Brian at 10/06/2008 02:31:00 PM
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DJI Fibonacci Retracement
level was hit. I am very cautiously a small position long via QLD. **UPDATE** Out at breakeven, it is still early and market remains below VWAP, what was I thinking?
Reminder to SELF
http://3.bp.blogspot.com/_r_4bas-lh0U/SOpKKmvQbnI/AAAAAAAACFg/TXS6fXaALYY/s400/DOW2.png
Posted by Brian at 10/06/2008 01:25:00 PM
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Test The Lows
Well, the declining VWAP acted as resistance and now the market appears headed for a test of the lows. Volume is significantly less on this test which is a divergence worth noting. If markets can avoid further deterioration I will be looking for a recapture of VWAP later today. There is no evidence at all of a potential turn, it is just a possible scenario. Manage risk.
http://4.bp.blogspot.com/_r_4bas-lh0U/SOpEmn7RcbI/AAAAAAAACFY/ilgItpowpSY/s400/test.png
Posted by Brian at 10/06/2008 01:00:00 PM
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Monday, October 06, 2008VWAP
Markets have rallied sharply from their lows and are now battling with the daily VWAP
http://2.bp.blogspot.com/_r_4bas-lh0U/SOosX8jCgwI/AAAAAAAACFQ/7HfxvT5OfAo/s400/2minvwap.png
Posted by Brian at 10/06/2008 11:18:00 AM
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Limits
Will this be the bear market by which all future bears are compared to?
Here are the limits again.
http://3.bp.blogspot.com/_r_4bas-lh0U/SOokX49TbtI/AAAAAAAACFI/cYX2qzFIfEs/s400/tradelimits.png
Posted by Brian at 10/06/2008 10:44:00 AM
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Reasons Not To Buy
- It's down too much
- The PE is just...
- It is at the __ day moving average
- It is at the __ retracement level
- But the earnings were great!
- Historically, the market has....
- It's an election year
- But the analyst said....
- It is at "support"
- The VIX is at __
_ etc...
The only reason to buy?
PRICE ACTION and then MANAGE RISK!!
The market is melting down and unless you are short it is just a horror show to watch from the sidelines.
Posted by Brian at 10/06/2008 10:33:00 AM
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Dow 10,000?
Art Cashin was just mentioning a possible capitulation scenario on CNBC. He thought some hard selling today and tomorrow morning would bring the Dow back below 10,000 and then setup a "massive reversal". I think his scenario makes sense for a TRADABLE bounce. The chart below shows the .618 retracement of the 2002 lows to the 2007 highs, which is found near 9,800. If you are looking to trade a bounce do not buy until there is evidence of a turn developing on the short term timeframes.
http://1.bp.blogspot.com/_r_4bas-lh0U/SOoRtvleMaI/AAAAAAAACE4/MDA55JZawGE/s400/Dow10K.png
Here's a picture from my Alaska trip, I didn't think of the market at all while on vacation.
http://2.bp.blogspot.com/_r_4bas-lh0U/SOoRycDoMqI/AAAAAAAACFA/9k45zlR25js/s400/fibmountain.JPG
Posted by Brian at 10/06/2008 09:22:00 AM
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Bamboozled
One of the saddest lessons of history is this: If we've been bamboozled long enough, we tend to reject any evidence of the bamboozle. The bamboozle has captured us. Once you give a charlatan power over you, you almost never get it back.
~Carl Sagan
Posted by Brian at 10/06/2008 07:06:00 AM
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Labels: quotes
Sunday, October 05, 2008More Weakness
Futures are lower by more than 1%.
http://3.bp.blogspot.com/_r_4bas-lh0U/SOlidIErvII/AAAAAAAACEw/9icdqn4Wqaw/s400/selling.png
Posted by Brian at 10/05/2008 08:56:00 PM
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Friday, October 03, 2008Stock Market Video Trend Analysis 10/3/08
http://4.bp.blogspot.com/_r_4bas-lh0U/SOZ9PHizLhI/AAAAAAAACCg/0Rz_wAi8Ups/s400/100308close.png
Ed Dobson is a trader and owner of TRADER'S PRESS, a financial bookstore which operates online and at tradeshows through out the country. He just reviewed my book and I am honored to have my book included in his "top ten trading books ever written." Below is his review.
Purchase YOUR COPY TODAY
Book Review of: Technical Analysis Using Multiple Time Frames
Author(s): Shannon, Brian
One of my favorite actors (Al Pacino) said in one of my favorite movies (The Scent of a Woman) “I’ve been around, y’know!” I might modestly say that I too have “been around” books and literature on trading for a long time, almost fifty years….and have literally read hundreds of books on the subject. The majority of them fall into the category of SSDD (same stuff, different day)….and I’ll confess that it takes something truly new and unusual to impress me. Brian Shannon’s new book, Technical Analysis Using Multiple Time Frames not only impresses me, it earns a place in my “top 10 trading books ever written” list.
I’ve had the pleasure of meeting Brian at a number of trading seminars and discussing his approach to trading. Long before his book came out, he impressed me as a particularly savvy trader with a wealth of knowledge well worth listening to…again, a rare situation. His book corroborates this early opinion of him, and represents a valuable contribution to trading literature. It expands greatly on some of the ideas on another old favorite of mine (Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets), adds valuable and detailed insights into the psychology of market participants, gives greatly detailed guidance on the specifics of how he trades, and emphasizes the most important elements necessary to achieve success in trading (discipline, detailed plan, removing emotion for decision making, and many others). A book from a “real trader” is worth far more, in my estimation, than one that is written from the “safety of the sidelines”. And this is one of the best that I have seen.
Perhaps the reason I like this book so much is that it mirrors closely my own beliefs on trading, which were gleaned and formulated over many years. Dominant themes throughout the book include the fact that price is the most important factor to consider, nothing else (even volume, which often expands after price moves, not before); that one must trade only what one sees, not what one thinks; the supreme importance of avoiding large losses and protecting capital; how one should listen only to the market and to price action, never to opinions; and perhaps most importantly, that in order to have the odds in one’s favor, one must trade with the prevailing trend (and not just the major trend, but the intermediate and minor trend as well).
Perhaps the most significant and important contribution of this book is the detailed manner in which the reader is shown how to enter and exit trades just at the moment when they should begin “working”, and not a moment sooner, thus permitting very close protective stops, which minimizes risk to trading capital. Shannon describes himself as a momentum trader, and takes positions only when all timeframes are in alignment with each other, from long term charts down to a 10 minute intraday chart. This is the first, and I believe the only book which offers concrete guidance in precisely how to correlate multiple time frames in order to fine tune trades with a high probability of success and a low risk.
Many “good” books on trading are “dry”, boring, and difficult reading. This one is easy and entertaining to read, clearly written, and replete with sound trading advice and “nifty” sayings that are easy to remember (“from failed moves come big moves”; “Human nature is the only constant in an environment constantly in a state of flux”; “risk is your constant companion”; “discipline and patience are your friends, emotions are the enemy”). The detailed descriptions of “stage analysis” and the psychology of market participants as price patterns unfold are well done.
If you are a long term, value oriented investor who reads 10-K’s and balance sheets, and selects stocks based on PE’s, book value, and other fundamentals, I doubt this book will hold much value for you. But if you are a focused, serious short term trader, it may just prove to be one of the most valuable books you ever read.
Review by Edward Dobson
President, Traders Press Inc.
Purchase YOUR COPY TODAY
Posted by Brian at 10/03/2008 03:50:00 PM
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Intraday Trendlines
The SPY and QQQQ are up at the declining trendlines and also below the declining 5 DMA. Expect large volatility with the vote. Which way the vote or the market goes in reaction to the outcome is impossible to know which keeps risks high.
http://4.bp.blogspot.com/_r_4bas-lh0U/SOY9PzqsTUI/AAAAAAAACCY/31J8DR5MTjE/s400/SPQfri.png
Posted by Brian at 10/03/2008 11:41:00 AM
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Who Will Make the Final Four?
http://4.bp.blogspot.com/_r_4bas-lh0U/SOYW02pYTPI/AAAAAAAACCQ/vg90Fxhao10/s400/septembermadnessb.jpg
Posted by Brian at 10/03/2008 08:56:00 AM
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Reason For Hope?
It is okay to want the market go turn around, but to act on hope in the face of declining prices does not make sense. Maybe this will happen or maybe that will happen which will motivate a turn in prices, but you are better waiting for confirmation of a turn before getting involved. An objective look at price action tells us that the trend continues lower. Risk Management is ALWAYS job #1 and the lack of risk management by "smart money" is what got us into this mess.
http://1.bp.blogspot.com/_r_4bas-lh0U/SOUSIboIdlI/AAAAAAAACCA/F9J54f-R9TE/s400/nope.png
Posted by Brian at 10/02/2008 02:19:00 PM
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Headed for A Retest (At Least)
No such thing as "down too much" if there are more willing (forced) sellers.
http://2.bp.blogspot.com/_r_4bas-lh0U/SOTZnV9K3qI/AAAAAAAACB4/t--icHvCps8/s400/SPQ.png
Posted by Brian at 10/02/2008 09:58:00 AM
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Falling
You've got to learn how to fall, before you learn to fly.
~Paul Simon
Posted by Brian at 10/02/2008 07:19:00 AM
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Labels: quotes
Wednesday, October 01, 2008Stock Market Video Trend Analysis 10/1/08
http://2.bp.blogspot.com/_r_4bas-lh0U/SOPa1_oJYNI/AAAAAAAACBw/2X61p6ALulo/s400/100108close.png
If you have visited my site for very long, you will know that I think very highly of the work from Brett Steenbarger. "Dr.Brett" is has created a new site which is an e-book he updates regularly. The free e-book is called INTRODUCTION TO TRADING it is an excellent resource which he has generously contributed to the trading community.
Stock Market Trend Analysis 10/1/08 from brian shannon on Vimeo.
Posted by Brian at 10/01/2008 04:17:00 PM
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Nervous Markets
The markets continue to trade nervously. It seems like that the market "wants" to go higher in the short term but the trend is still lower and there are many levels of potential resistance just above current prices. Risks remain high.
http://2.bp.blogspot.com/_r_4bas-lh0U/SOPBohnCh0I/AAAAAAAACBo/3eWIi3q7YCI/s400/spQ10.png
Posted by Brian at 10/01/2008 02:29:00 PM
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Positivism
A single sunbeam is enough to drive away many shadows.
~St. Francis of Assisi
Posted by Brian at 10/01/2008 06:29:00 AM
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Labels: quotes
Tuesday, September 30, 2008Top Ten Trading Books Ever Written
Ed Dobson is a trader and owner of TRADER'S PRESS, a financial bookstore which operates online and at tradeshows through out the country. He just reviewed my book and I am honored to have my book included in his "top ten trading books ever written." Below is his review.
Purchase YOUR COPY TODAY
Book Review of: Technical Analysis Using Multiple Time Frames
Author(s): Shannon, Brian
One of my favorite actors (Al Pacino) said in one of my favorite movies (The Scent of a Woman) “I’ve been around, y’know!” I might modestly say that I too have “been around” books and literature on trading for a long time, almost fifty years….and have literally read hundreds of books on the subject. The majority of them fall into the category of SSDD (same stuff, different day)….and I’ll confess that it takes something truly new and unusual to impress me. Brian Shannon’s new book, Technical Analysis Using Multiple Time Frames not only impresses me, it earns a place in my “top 10 trading books ever written” list.
I’ve had the pleasure of meeting Brian at a number of trading seminars and discussing his approach to trading. Long before his book came out, he impressed me as a particularly savvy trader with a wealth of knowledge well worth listening to…again, a rare situation. His book corroborates this early opinion of him, and represents a valuable contribution to trading literature. It expands greatly on some of the ideas on another old favorite of mine (Stan Weinstein’s Secrets for Profiting in Bull and Bear Markets), adds valuable and detailed insights into the psychology of market participants, gives greatly detailed guidance on the specifics of how he trades, and emphasizes the most important elements necessary to achieve success in trading (discipline, detailed plan, removing emotion for decision making, and many others). A book from a “real trader” is worth far more, in my estimation, than one that is written from the “safety of the sidelines”. And this is one of the best that I have seen.
Perhaps the reason I like this book so much is that it mirrors closely my own beliefs on trading, which were gleaned and formulated over many years. Dominant themes throughout the book include the fact that price is the most important factor to consider, nothing else (even volume, which often expands after price moves, not before); that one must trade only what one sees, not what one thinks; the supreme importance of avoiding large losses and protecting capital; how one should listen only to the market and to price action, never to opinions; and perhaps most importantly, that in order to have the odds in one’s favor, one must trade with the prevailing trend (and not just the major trend, but the intermediate and minor trend as well).
Perhaps the most significant and important contribution of this book is the detailed manner in which the reader is shown how to enter and exit trades just at the moment when they should begin “working”, and not a moment sooner, thus permitting very close protective stops, which minimizes risk to trading capital. Shannon describes himself as a momentum trader, and takes positions only when all timeframes are in alignment with each other, from long term charts down to a 10 minute intraday chart. This is the first, and I believe the only book which offers concrete guidance in precisely how to correlate multiple time frames in order to fine tune trades with a high probability of success and a low risk.
Many “good” books on trading are “dry”, boring, and difficult reading. This one is easy and entertaining to read, clearly written, and replete with sound trading advice and “nifty” sayings that are easy to remember (“from failed moves come big moves”; “Human nature is the only constant in an environment constantly in a state of flux”; “risk is your constant companion”; “discipline and patience are your friends, emotions are the enemy”). The detailed descriptions of “stage analysis” and the psychology of market participants as price patterns unfold are well done.
If you are a long term, value oriented investor who reads 10-K’s and balance sheets, and selects stocks based on PE’s, book value, and other fundamentals, I doubt this book will hold much value for you. But if you are a focused, serious short term trader, it may just prove to be one of the most valuable books you ever read.
Review by Edward Dobson
President, Traders Press Inc.
Purchase YOUR COPY TODAY
Posted by Brian at 9/30/2008 05:44:00 PM
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Labels: book review
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