Re: [RT] Re: chart formations

["Gitanshu Buch" <onwingsofeagles@xxxxxxxxxxxxx>]

Not sure how I would position-trade this market on the long side - bear 
market rally or not.
 
The A/D and up/down volume numbers on friday were good, but 
inferior-quality - and while I can't hold a match to Dom and Ben's candles 
in this analysis, I can see that Friday's volume justification looks more of a 
coincident event than a predictive event. 
 
For every good thing you will tell me about Friday volume, I will show you 
- for eg - the New High New Low list, the fact that the A/D line rolled over one 
full week after the indices had rolled over in Sep - etc.
 
Volume analysis used to be descriptive - it looks like it still is. 
Where is proof of "volume precedes price" or "momentum preceeds price" in this 
action??
 
The distance to the 50 and 200 day ma's will make for a powerful rally 
similar to the one we had in mid-April. No doubt the percentages look impressive 
because the base is now lower. After all, something went up 1000% last year has 
to fall only 95% to lose most of its value - so that it can rally 200% again to 
meet up with its falling 50 day and 200 day ma's. Wow.
 
The wrong sorts of industry groups are rallying - medicals, energies, 
defense. Even within those, the secondary names are now rallying harder than the 
better capitalized names, indicating speculative excess within those groups and 
lack of sustainability. A few energy stocks look outright toppy.
 
While the media made big news out of the multi-point moves in some of the 
glamorous techs, one finds that all these did was trade within their ATRs - and 
so what if the trade was all one way. A perusal of charts aqs diverse as SUNW, 
EMC, JNPR, AMCC etc will show you this.
 
I was struck by how "trade what you see" comments came out - what one saw 
going into Friday AM was shambles, failed indicators that asked me to Buy way 
back before the market turned around, failed turning poiint dates, and parabolic 
range expansion in the direction of the core trend. 
 
Heck, action coming into Thursday AM looked overdone to the downside and 
yet the market plunged. Just how is one to participate if all the crutches one 
grew up with fail at exactly the fulcrum of success and failure?
 
Unless one was a daytrader or someone lean on longside exposure looking to 
build small positions, one had no basis for being long coming into Friday. 
Those oversold/oscillator/VIX over 30 & upper bollinger band / retracements 
went by the wayside a few hundred points ago - WHEN THURSDAY BEGAN.
 
I feel Friday was an accident waiting to happen (for the shorts), and a 
toss of the coin in the predictability of the outcome BEFORE FRIDAY BEGAN. It 
could equally easily have gone the other way, making thursday look like a simple 
rainfall before the hurricane.
 
CSCO found buyers at the obviously broken $50 support, AOL did not find 
buyers in spite of overwhelmingly good news from the EU. And what would one make 
of YHOO? YHOO too had triple bottoms, obvious supports, etc - and still there's 
no stopping it from getting into its own way. I could also cite Intel in the 
same vein. Or Texas Instruments, Nokia, Microsoft, Dell, Wal Mart...
 
I don't think Friday's volume tells us anything about next 
Monday-Wednesday's action. I'd welcome Ben & Dom's opinion - and, even 
though this sounds combative, you know I mean well.
 
I believe overall volume will be lesser going into Monday-Wednesday cycle, 
expiration notwithstanding. I believe this will setup the textbook 1234 pullback 
for shorting. Regardless of what price does.
 
Yes, I'm anticipating the anticipation of another selloff and when it 
comes, I'll participate. Until then, I'm better off being directionally neutral 
in my position trades except for the choicest of charts with the tightest of 
stops.
 
The numbers:
 
NYSE: 10/13
1619 Advances on 868.3 million
1254 Declined on 330.6 million
21 New Highs
162 New Lows
 
Nasdaq: 10/13
2680 advances on 1608.2 million
1303 declined on 369.4 million
28 New Highs
402 New Lows
 
Gitanshu






eGroups Sponsor




<img width="468" height="60"
  border="0"
  alt=""
  src="http://adimg.egroups.com/img/9628/0/_/152424/_/971637255/PassionGift468x60.gif";>









To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxx