Posts Tagged ‘trend lines’

How a Simple Line Can Improve Your Trading Success

Elliott Wave International’s Jeffrey Kennedy explains How a Simple Line Can Improve Your Trading Success. 

The following trading lesson has been adapted from Jeffrey Kennedy’s eBook, Trading the Line – 5 Ways You Can Use Trendlines to Improve Your Trading Decisions. Now through February 7, you can download the 14-page eBook free. Learn more here.

"How to draw a trendline" is one of the first things people learn when they study technical analysis. Typically, they quickly move on to more advanced topics and too often discard this simplest of all technical tools.

Yet you’d be amazed at the value a simple line can offer when you analyze a market. As Jeffrey Kennedy, Elliott Wave International’s Chief Commodity Analyst, puts it:

“A trendline represents the psychology of the market, specifically, the psychology between the bulls and the bears. If the trendline slopes upward, the bulls are in control. If the trendline slopes downward, the bears are in control. Moreover, the actual angle or slope of a trendline can determine whether or not the market is extremely optimistic or extremely pessimistic.”

In other words, a trendline can help you identify the market’s trend. Consider this example in the price chart of Google.


 
That one trendline — drawn between the lows in 2004 and the lows in 2005 — provided support for a number of retracements over the next two years.

That’s pretty basic. But there are many more ways to draw trendlines. When a market is in a correction, you can draw a trendline and then draw a parallel line: in turn, these two parallel lines can create a channel that often "contains" the corrective price action. When price breaks out of this channel, there’s a good chance the correction is over and the main trend has resumed. Here’s an example in a chart of Soybeans. Notice how the upper trendline provided support for the subsequent move.

For more free trading lessons on trendlines, download Jeffrey Kennedy’s free 14-page eBook, Trading the Line – 5 Ways You Can Use Trendlines to Improve Your Trading Decisions. It explains the power of simple trendlines, how to draw them, and how to determine when the trend has actually changed. Download your free eBook.

 

This article was syndicated by Elliott Wave International and was originally published under the headline How a
continue reading


Tags: , ,




DARK HORSE HEDGE 7/11/10

DARK HORSE HEDGE 7/11/10

Steeplechase

By Scott Brown of Sabrient, with Ilene of Phil’s Stock World 

A holiday-shortened week combined with little news provided the backdrop for a light volume positive week with the major indexes posting 5% gains.  Earnings season begins Monday July 12, starting off with Alcoa Inc. and followed by dozens of other companies.  The S&P is bumping up against several technical resistance lines.  After falling over 13% since the April highs, last week’s recovery pushed the SPX to 1077. 

On the chart below, our trend line drawn through the April highs and June rebound-highs indicates that the SPX is right at trend-line resistance.  The 50-day Moving Average also looms just above as another possible resistance area. 

[Chart by Free Stock Charts]

The 14-day RSI at 42.4 remains below a more bullish 50, and the 12-26-9 MACD at -13.6 remains shy of a bullish signal line at zero.  Factoring in the lack of volume in last week’s 5% rebound (and possible lack of conviction), the chart-evidence leads us to believe that the market isn’t ready to continue the uptrend in the short-term.  Notice all four positive days last week had volume below the 50-day Moving Average. Greater declining volume on Thursday and Friday isn’t particularly encouraging.

Analysts are projecting that second-quarter earnings of S&P 500 companies rose 42 percent, according to S&Ps Silverblatt.  Investors will again be watching the earnings and revenue figures along with guidance as concerns over a double-dip recession remain.  The Dark Horse Hedge maintains a SHORT tilt in our Long/Short approach to achieving higher Alpha (return over benchmark return) and Sharpe Ratios (return for each unit of risk taken) with a low Beta (correlation to market move and direction--i.e. we’re striving for less correlation to market movement).  

We will be watching the trend lines and technical signals this week to add new posititons.  If the market struggles and can’t penetrate the trend line, we will likely recommend adding 2 SHORTS and 1 LONG position.  In contrast, if the market reacts well to early earnings announcements and can break through the trend line, it is likely that the RSI and MACD will confirm a move through the 50-day Moving Average and provide reason to go to a BALANCED position by adding 2 LONGS.

We are continuing to hold our previously entered (July 1, 2010) short and long positions:…
continue reading


Tags: , , , , , ,




Three Change In Trend Chart Patterns To Profit From

Three Change In Trend Chart Patterns To Profit From

Courtesy of David Grandey

Change In Trends

Eventually all trends change. If you are short at a market low you need to know when to cover and get out. Likewise if you are long at a market high, here too you need to know when to get out. This is where Change In Trends patterns come into play.

 
At All About Trends typically there are three chart patterns we look for when it comes to change in trends. Considering we are at one-year highs we’ll focus upon change in trends from up to down. Those three chart patterns are: Double TopsTrendline breaks and First Thrusts Down. Below are examples of each.
 
Double Tops 
A Double top is just that. There are variations to this pattern though. One such variation is that of a shake out high. This is where an issue breaks above the prior high by a smidge and then rolls back over much like a shake and bake. The other variation is that of a continuation high. This is where an issue is further along in a correction then goes thru a rally period much like a snap back rally then proceeds to put in a double top an rolls over.

Below is a recent example of a name we shorted earlier in the year and below that is a continuation double top example 

Below is DRYS in a continuation double top. As you can see the issue has been in a correction for months then gets a retracement rally and that retracement rally ends with a double top. 

Trend Line Breaks
This is rather self explanatory in the sense that it’s simply all about a trendine break. Just remember bigger is better. The bigger the pattern in time duration and scope the better. Just take a look at TSL from January.

 

First Thrusts Down

This is when an issue is in a clearly defined uptrend that all of a sudden falls to either a prior support level or the 50 day average as in the case below (The Blue Box is the first thrust down), then it proceeds to make a rally attempt (Everything above the pink line). We call that rally attempt a snapback rally


continue reading


Tags: , , , , , ,




 
 
 

Market News

News You Can Use From Phil's Stock World

 

Financial Markets and Economy

The Crowded Trade in Bank Stocks Among Oil-Rich Countries (Bloomberg)

When it comes to the selloff in bank stocks, there’s plenty to blame: credit concern, earnings, negative interest rates, and souring sentiment.

Middle income Americans aren't that worried about the choppy stock market (Business Insider)

Many are worried about what the hemorrhaging stock market could mean going forward for the overall e...



more from Paul

Zero Hedge

Canada Sells Nearly Half Of All Its Gold Reserves

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

By Monique Muise, as published on Global News

Canada sells nearly half of all its gold reserves

The government of Canada sold off nearly half its gold reserves in recent weeks, continuing a pattern of moving away from the precious metal as a government asset.

According to the International Monetary Fund’s International Financial Statistics, Canada held three tonnes of gold reserves as of late 2015.

The latest data, published last week, show the total Canadian gold reserves now st...



more from Tyler

Chart School

Further Losses But No Breakaway

Courtesy of Declan.

The Asian session had set up for big losses, but markets were able to defend against such losses even if finishing with a lower close.

The S&P tagged the January low, but it's hard to see it holding out if there's another challenge on 1,810.


The Nasdaq was able to register a higher close (although below the prior day's close). It probably did enough to negate what is normally a bearish black candlestick, but bulls won't have any confidence until the bearish channel is broken.

...

more from Chart School

Phil's Favorites

Phil on BNN's Money Talk Show

Watch Phil with Kim Parlee on Business News Network's Money Talk

1) Phil gives his outlook for U.S. markets and the US economic economy. Canada may be heading into a recession because the energy is sector dead for years, at least, but the U.S. economy is slowly improving. What is the basis of Phil's 5% rule? Watch the video.

2) Phil explains why oil demand is falling globally and what the implications are for energy-rich economies like Canada. Hint: The TSX (Canada's oil weighted index) is not going to recover. Oil is not going to recover. Oil's not a thing anymore - like wagon wheels. This is why the Saudis aren't holding back on selling their oil. Canada is due for some painful adjustments. 

3) Natural gas - Phil gives the details of his option...



more from Ilene

Kimble Charting Solutions

5-Year bull trend is ending, breaking below support

Courtesy of Chris Kimble.

The Power of the Pattern would describe a bull trend, based upon a series of higher lows and higher highs.

Using this definition, the broadest of indices in the states, are “breaking 5-year rising trends!” This could break the heart of the bulls.

CLICK ON CHART TO ENLARGE

This 2-pack reflects that these two broad markets are breaking below “Weekly Closing” 5-year bull trends. When long-term trends break, it is common for selling pressure ...



more from Kimble C.S.

Insider Scoop

MRC Global to Sell Oil Country Tubular Goods Business for $48M

Courtesy of Benzinga.

MRC Global Inc. (NYSE: MRC) announced Wednesday, that it has entered into a definitive agreement to sell its U.S. OCTG business to Sooner Pipe, LLC, a subsidiary of Marubeni-Itochu Tubulars America, Inc., for $48 million, subject to certain adjustments. MRC Global's U.S. OCTG sales were approximately $305 million in 2015. As a result of the expected sale, a pre-tax charge of approximately $5.0 million is expected to be recorded in the fourth quarter of 2015. The transaction is expected to close in the first quarter of 2016, subject to customary closing conditions.

Andrew R. Lane, MRC Global's chairman, president and chief executive officer, stated, "The divestiture of our OCTG product line is the culmination of our strategy to reduce our exposure to upstream drilling volatility and to foc...



http://www.insidercow.com/ more from Insider

All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

more from David

OpTrader

Swing trading portfolio - week of February 8th, 2016

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



more from OpTrader

ValueWalk

Why Most Investors Fail in the Stock Market

 

Why Most Investors Fail in the Stock Market

Courtesy of ValueWalk, by  

Throughout the past 30 days of wild volatility, here’s what I didn’t do.

Panic. Worry. Sell.

In fact, the best I did was add to a couple of positions yesterday. The world was already in an uncertain state for the past 3+ years. It’s just that with the market rising, we pushed the issue to the back of our  mind and ignored it.

If you read Howard Marks latest memo, ...



more from ValueWalk

Digital Currencies

2016 Theme #3: The Rise Of Independent (Non-State) Crypto-Currencies

Courtesy of Charles Hugh-Smith at Of Two Minds

A number of systemic, structural forces are intersecting in 2016. One is the rise of non-state, non-central-bank-issued crypto-currencies.

We all know money is created and distributed by governments and central banks. The reason is simple: control the money and you control everything.

The invention of the blockchain and crypto-currencies such as Bitcoin have opened the door to non-state, non-central-bank currencies--money that is global and independent of any state or central bank, or indeed, any bank, as crypto-currencies are structurally peer-to-peer, meaning they don't require a bank to function: people can exchange crypto-currencies to pay for goods and services without a bank acting as a clearinghouse for all these transactions.

This doesn't just open t...



more from Bitcoin

Sabrient

Sector Detector: New Year brings new hope after bulls lose traction to close 2015

Reminder: Sabrient is available to chat with Members, comments are found below each post.

Chart via Finviz

Courtesy of Sabrient Systems and Gradient Analytics

Last year, the S&P 500 large caps closed 2015 essentially flat on a total return basis, while the NASDAQ 100 showed a little better performance at +8.3% and the Russell 2000 small caps fell -5.9%. Overall, stocks disappointed even in the face of modest expectations, especially the small caps as market leadership was mostly limited to a handful of large and mega-cap darlings.

Notably, the full year chart for the S&P 500 looks very much like 2011. It got off to a good start, drifted sideways for...



more from Sabrient

Promotions

PSW is more than just stock talk!

 

We know you love coming here for our Stocks & Options education, strategy and trade ideas, and for Phil's daily commentary which you can't live without, but there's more!

PhilStockWorld.com features the most important and most interesting news items from around the web, all day, every day!

News: If you missed it, you can probably find it in our Market News section. We sift through piles of news so you don't have to.   

If you are looking for non-mainstream, provocatively-narrated news and opinion pieces which promise to make you think -- we feature Zero Hedge, ...



more from Promotions

Pharmboy

Baxter's Spinoff

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

Baxter Int. (BAX) is splitting off its BioSciences division into a new company called Baxalta. Shares of Baxalta will be given as a tax-free dividend, in the ratio of one to one, to BAX holders on record on June 17, 2015. That means, if you want to receive the Baxalta dividend, you need to buy the stock this week (on or before June 12).

The Baxalta Spinoff

By Ilene with Trevor of Lowenthal Capital Partners and Paul Price

In its recent filing with the SEC, Baxter provides:

“This information statement is being ...



more from Pharmboy

Mapping The Market

An update on oil proxies

Courtesy of Jean-Luc Saillard

Back in December, I wrote a post on my blog where I compared the performances of various ETFs related to the oil industry. I was looking for the best possible proxy to match the moves of oil prices if you didn't want to play with futures. At the time, I concluded that for medium term trades, USO and the leveraged ETFs UCO and SCO were the most promising. Longer term, broader ETFs like OIH and XLE might make better investment if oil prices do recover to more profitable prices since ETF linked to futures like USO, UCO and SCO do suffer from decay. It also seemed that DIG and DUG could be promising if OIH could recover as it should with the price of oil, but that they don't make a good proxy for the price of oil itself. 

Since...



more from M.T.M.

Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!




FeedTheBull - Top Stock market and Finance Sites



About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>