Oil and Gold turn to Rubber
Just a quick intraday post.
Oil and gold are having a pretty big up day, which is no surprise considering how badly they've been pummelled in recent weeks.
Oil - more precisely, OIH, which I consider a proxy for the major oil services stocks - is doing a textbook retracement to its neckline. The bolder among us may want to short aggressively here. This is a gorgeous head and shoulders pattern. It's always scary shorting at a time like this, naturally, because there's a lot of strength. But retracements to necklines often represent the lowest-risk time to go short, since you've got a crystal-clear stop loss level in case you're wrong.
Gold ($XAU) is murkier. It was forming a head and shoulders pattern, but it didn't get back down to its neckline. In addition, the price has pushed its way to a major Fibonacci retracement level, which implied the selling was over for now. So I'm steering clear at this point.
At the moment, the stock indexes are showing a skosh of weakness in spite of earlier strength. Let's hope it continues until the close!
5 comments:
For the past month or so I have been inundated with E-mail advertisments offering" monthly fee for advice"info on market direction and trade possibilities.This tells me there are more and more wannabe's out there that are very unsuccessful traders.Having 200 or 300 people a month fork out a $49 a month for speculative advice is an easy way to make a comfortable living with no risk to them if they can sucker them in.And they don't even have to trade at all if they don't want to.Most of the great traders I know and have heard of really don't want to share their strategies at all.And they don't want a lot of people in the "game" because it dilutes the opportunities.Just an observation of the times right now.If someone is asking for money for their opinions ,then they probably have no more of an idea what they are doing than you do and they are looking for a way to pull the old P.T. Barnum on you.
Denver
ref: is it possible amarnath was long energy and short tech? that would explain the first half sept markets move......
Now that is out of the way, markets reverse?
My Small Cap Swing indicator moved to a LONG signal early on 9/12/06. It closed yesterday, Sept 18th , at +70, and if the prices at 2:30pm ET had prevailed at the close it would have switched to SHORT. Any down day at all on the 19th and it will officially switch SHORT.
This indicator was “triggered” SHORT on an intraday basis on Sept 18th. Only a strong up day would prevent the official switch to SHORT, now.
Here are the recent values of my Small Cap Swing Indicator:
. . . . . .Small
. . . . . . Cap . . . . . . . . .Russell
. . . . . .Swing . . . . . . . . .2000 . . . Cumulative
Date . . . Ind . .Signal . . % Chg . . . . % Chg
08/28 . . +05 . .LONG . . +1.1% . . . . +1.1%
08/29 . . +23 . .LONG . . +1.2% . . . . +2.3%
08/30 . . +39 . .LONG . . +0.8% . . . . +3.1%
08/31 . . +48 . .LONG . . +0.0% . . . . +3.1%
09/01 . . +52 . .LONG . . +0.1% . . . . +3.2%
09/05 . . +62 . .LONG . . +0.8% . . . . +4.0%
09/06 . . -19 . .SHORT. ..-2.1%. . . . . -2.1%
09/07 . . -43 . .SHORT. ..-0.8%. . . . . -2.9%
09/08 . . -61 . .SHORT. ..+0.3% . . . . -2.6%
09/11 . . -72 . .SHORT. ..-0.1%. . . . . -2.7%
09/12 . . +18 . .LONG . . +2.4% . . . . +2.4%
09/13 . . +41 . .LONG . . +0.8% . . . . +3.2%
09/14 . . +54 . .LONG . ..-0.4%. . . . . +2.8%
09/15 . . +65 . .LONG . . +0.2% . . . . +3.2%
09/18 . . +70 . .LONG . . +0.0% . . . . +3.2% (short triggered)
Normal LONG target: . . +65 to +75 (max: +95)
Normal SHORT target: . -65 to -75 (max: -107)
I remain 100% invested in SHORT positions as of Friday, the 18th.
another interesting day, most techs up 2-5%, AMD, NVDA and MRVL just to point out a few. Didnt get to trade today, still own a positing in QID as of Friday at $62.05-$62.07. Hoping to get rid of some shares around $64-$65. PPI and Federal Reserve meeting is what will keep this market volatile these next few days.
Trader 2006.
Head and Shoulders.....one of the most overrated patterns of the 21st century. If you ever witness a failure of this pattern, step out of the way 'cause your gonna get your head(and shoulders) handed to you on a chopping block. The reason is because the pattern is so identifiable by every tom, dick and harry trader wanna-be that when it fails to follow through as stated in the textbooks, everyone rushes for the exit door at the same time. For more reading, Farley writes about this pattern failure in his book "The Master Swing Trader."
-MT
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