A drop in new home sales ruined the mood of the bulls, but the morning lows were able to find buyers. Today’s action can be classified as an inside day, a bullish indication. Although the NYSE indexes notched a distribution day it was minor at best. The NASDAQ was able to avoid distribution and with only last Friday as the only hint at distribution our uptrend remains intact. Not too mention there are plenty of leaders whose action today was not indicative of a market about to roll over. While it would have been nice to see the market continue racing higher these “pause” days help prolong the life of the uptrend as stocks are able to consolidate recent gains. Another decent day for the stock market and Big Wave Trading.
Volume fell at the end of the day as both the NYSE and NASDAQ volume figures were tracking much higher for most of the day. In the final hour institutions were simply not selling stock hand over fist. Thus, volume figures were mild at best coming in lower on the NASDAQ. The Russell 2000 continues to be the leading index and although volume figures aren’t available at the time of me writing this I would imagine volume falls in line with the NASDAQ. Closing out near the lows on falling volume is a better scenario rather than having heavy volume selling a positive development for this uptrend.
The market will certainly be waiting on Friday’s GDP release. Whatever the number the market will move in accordance to its own will rather than what the actual number is. As we know, situations and economic releases may appear bullish or bearish and the market can completely ignore the popular opinion. Much like the Health care Reform Bill many were calling for a big decline, yet the market thrusted higher despite the popular opinion. Go with what price and volume is telling you. Speaking of price action I am going to post point and figure charts for the NASDAQ and S&P 500. Point and figure charts were used by the greatest traders of all time before they had daily, weekly, intraday charts. They aren’t used any more by many, meaning they have great value!
Many still believe the market is “overbought,” but is it? I have found the McClellan Oscillator to be useful, I don’t use it to trade with, but it is a nice reference.
For the top callers out there one way to “spot a top” is to see if breadth is healthy. A market hitting highs on weak breadth can lead to a correction. Here is the advance/decline lines for the NASDAQ and NYSE.
No shortage of advancers out there.
Leaders and indexes are still acting well and until we begin to see cracks in leadership, heavy distribution, and stalling this uptrend will continue to have legs to move higher.
Hi Joshua,
Sometimes I have a hard time understanding your commentaries. I still am not sure what BOP is and I don’t know how to see it. I also would like to get a great set up so I can see what you see. I want to be the best trader possible. Do you have a list of what you use for programs and charts and services? I want to be set up for success and I am not sure who else to ask.
Thanks for your help,
Mark
PS – I am sill holding SCOK. It is down some 9%. I guess I should have unloaded it. Did you buy it and get stopped out..or not buy it at all? I am hoping that it will go up..sounds pathetic huh
Mark,
Thanks for sub’ing to gold! Come into the forums and we’ll help you there so all of our members can see! Hope is a dangerous emotion, cut your loss and move on.
If you are a new investor I am not sure how you can fully know what a 15 year full-time experienced trader would mean all the time. Give yourself more than a month. Too many people think they can learn this in a month. Can you be a doctor in a month? A lawyer? An insurance agent? A police officer? Give yourself time and if you don’t understand something, just look it up. Google knows EVERYTHING.
BOP and the meaning behind it is clearly in Telechart. Telechart files will tell you what it is. That is easy to look up. All that it matters to me is that it is green. Green is good, the rest is not important. A great setup was the SABA long. The great setups almost never happen anymore. Review my past big winners like HIL in 2003 for a “great” setup. Things ALWAYS change. CISG is a near to great setup. Doesn’t mean it is going to work? Absolutely not.
I have a FAQ section on my website. These are the tools I use: Telechart, Daily Graphs, and I place my trades in IB and MBTrading. That’s it!
SCOK is still fine. Still out of all the longs for you to take you KNEW by looking at where I posted the cut loss area that this was a volatile issue. If you can’t hold on to a 9% loss for a possible 50% to 100% gain then this is not a long you should have taken. Also this stock averages less than 100k a day and is thinly traded. New investors should absolutely never buy a lot of these. Your emotions are all wrong when you start trading.
I post all my sells in the Gold forums and how could I have gotten stopped out if it is not below where I posted my cut loss to be the day I went long. The chart is still technically fine and it is still basing.
“Hoping” in the stock market WILL ALWAYS sound pathetic. Get rid of that “hoping” and “fearing” and “greeding”