Monday, June 28, 2010

Top40 - end of the week update

It looks like volatility in our market dried up with the start of World Cup. ATR is back below 2% (10-day ATR) and it is pointing down very much. Will see what is going to happen in remaining two weeks.

Top40 tested high around 25300 on Monday, but it did not break it. Trend line connecting two highs (from April) was around same level. After failure to break above, Top40 got sold off for the remaining of the week, recording four red days in a row and closing week at 24263, which is below 200 simple moving average.

Stochastic turned down and currently is around 64, relative strength index is pointing down as well, but it is still above trend line that was made with positive divergences. Macd is above zero and signal line, but as well pointing down.

Coming week can bring us two scenarios: First one is another attack on trend line with high around 25300 and this time 89 simple moving average is there as well. On the bearish side, market can sell off even more and test 22900-23000 level one more time.

Moving averages, which help us to determine long, medium and short-term trends:
  • long-term (200sma) - DOWN
  • ntermediate (89sma) - DOWN
  • short-term (10ema) - DOWN
Trade with trend!

Monday, June 21, 2010

Reading to kick start new week

Afraid to Trade:

Opportunities and Levels to Watch in NASDAQ and QQQQ June 16

Breakout in GLD? A Look at the Arc and Triangle

Current Standard Deviation Bands for NASDAQ and Dow Jones

Au.Tra.Sy blog:

Trend Following Wizards: negative month (May), 2010 now in the red…


Stronger Than Expected Capacity Utilization

TED Spread Sees Largest Decline Since March

Gold vs Dollar Correlation

Chris Perruna:

Trend Reversal Coming…?

CSS Analytics:

High Frequency Trading and the Online Retail Investor


The Lure of Trading at the Open?

David Fry:

The Most Boring Expiration 'Ever'


Backtest Report: Stocks Above 5 Day Moving Avg. Indicator

Scott Bleier:

Dollar Chart-Art…

The Big Picture:

America: Where Are You Moving From?

On the Treasury “Bubble”

U.S. Consumer Spending ChartFest

VIX and More:

The Elusive Trading Range

Top40 - end of the day update

Last week brought us four trading days, with futures close-out on Thursday. 

Top40 progressed further and now there are 5 green closes over last 7 trading days. Index added almost 2000 points in those 7 trading days and formed doji on Friday. Target for falling wedge on Thursday has not been met and there are approximately 1000 more points to go.

What should worry bulls is Stochastic, which is resting around 90 level, but as we know it can stay in overbought position in prolonged up moves. RSI is flattening out and MACD is around 0 level, but above signal line.

Moving averages, which help us to determine long, medium and short-term trends: 
  • long-term (200sma) - UP
  • intermediate (89sma) - DOWN
  • short-term (10ema) - UP
 Trade with trend!

Tuesday, June 15, 2010

Top 40 - daily update

After few weeks during which some changes took place on ALSI TRADER, we are riding again.

Today we will take a look at daily chart of Top40 index.

Firstly, what we can see is that Top40 broke down sloping trend line and for now correction is over for this market. Trend line was at the same time top line of falling wedge pattern and with braking of that top line on Thursday and back test on Friday, so far we can say that falling wedge patter is broken. Target for that pattern is around 26100, few points short from year to date high.

If we inspect indicators on top of the chart, there are very obvious triple positive divergences on RSI and Stochastic oscillators and positive divergences on MACD. Stochastic is currently around 70, but RSI and MACD still have room to go up.

So, for now, Top40 chart looks very bullish, but markets are jittery, so have you mouse ready to trade.

On the down side, there is obvious support around 22900-23100. It was tested four times so far in last few months and this level is clear border between bulls and bears. Bulls should not be worried if Top40 is above it.

Moving averages, which help us to determine long, medium and short-term trends:
  • long-term (200sma) - UP
  • intermediate (89sma) - DOWN
  • short-term (10ema) - UP 
Trade with trend!


Reading to kick start new week

Afraid to Trade:

Dow Jones Priced in Gold Long Term View June 9

Third Time’s a Charm? SPX Tests Line in Sand

Bulls Willing to Do Anything to Avoid Falling into Market Abyss


I would recommend reading these short and informative posts in given order, as it really paints nice picture of strange market action.

TRIN Index Shows Extreme Selling

6-Month Rolling Change of the Dollar Index

Consumer Discretionary Still Leading, Technology Not

Percentage of S&P 500 Stocks Above 50-Day Moving Averages

S&P 500 10-Day A/D Line Back in Positive Territory

and some fun:

The World Cup Indicator?


Lunar Cycle and Stock Returns

End-of-Quarter Effect

David Fry:

A Market Show About Nothing


Very nice two-post mini series on ATR.

How to Adapt to a Volatile Market- Part 2

The Talent Code:

3 Principles of Goofing Around

The Big Picture:

NFP Chart Round Up

Oil Consumption Around the World