ALSI daily range

Just as a follow-up to one of the previous posts (http://alsi-trader.blogspot.com/2010/01/blog-post.html) I’ve decided to post these two charts.

We had some movement and systems responded to a certain degree, but things are not yet as “busy” as we would like them to be.

Trade with trend.

Update on J200 end of the day

I wanted to update Top40 (J200) end of the day chart, as of yesterday’s close.

Top40 (J200) dropped heavily yesterday and just touched trend line. This is third touch and trend line is becoming more valid. Previous low at 23770 is not broken yet, so be careful today out there. Bias is on a short side, but we have lots of support around these levels.

On the bearish side - there is broken rising wedge with target around 22900 and that is still on cards.

Trade with trend.

Mid week reading

Afraid to Trade:

A Closer Look at Corrective and Impulsive Phases in Gold

Twists Turns and Traps: Chart Updates for Potash POT

Bespoke:

Final Earnings Season Stats

Q2 Earnings Growth Beats Expectations

Existing Home Sales Expected to Be Down in the Dumps

Asia's Daily Impact on US Markets

Charts Gone Wild:

Some excellent reading.

The Four Stages of Learning

Correction in the Poker Industry

The Top 10 Largest Crashes

Mutual Fund Industry Unable to Recover, Historically Low Cash Levels

David Fry:

Stocks in Summertime Funk

Scott Bleier:

Everyone is scared shitless. So why isn’t the VIX?

The Big Picture:

Is the Fed Pushing on a String?

Top40 - end of the day recap for week ending on August 22nd

It is time again to check what Top40 chart is telling us.

Top40 was in a solid downtrend over last month or so, actually - out of last 18 days only 4 had higher close, while on 14 occasions we had solid red days. Top40 dropped from 25799 on August 2nd to current 23921 (with low of 23770), making it massive 2000 points drop from high to low.

So, let’s first see what patterns and trend lines are telling us: There is massive trend line resistance around 25700 that stopped Top40 twice already this year. That line is drawn from all time high in 2007. Break of that trend line would be very important for bulls, but that is for now out of question. Top40 first has to clear about 2000 points on upside.

On a down side we have trend line support around 23600-23700, just bellow Friday’s levels, and below that value we have crucial support in 23000 range. That support held three times in May, June and early July, as well as it held earlier in February. That same level is neckline for massive head and shoulders pattern that developed over last nine to ten months. Break and conformation below neckline could easily push Top40 down to 19500-20000 zone. So, this is point to watch if you are bear. It looks like range between bulls and bears is getting smaller (it is only 2000 points now), so maybe we could expect some resolution soon.

Indicators look oversold, Stochastic especially, while RSI is not so oversold (around 35 but in current sideways market it dropped below 30 only once). MACD is below 0 line.

Moving averages, which help us to determine long, medium and short-term trends:

• long-term (200sma) - DOWN

• intermediate (89sma) - DOWN

• short-term (10ema) - DOWN

Trade with trend!

EURUSD head and shoulders

Let’s take a quick look at EURUSD 4 hour chart.

Pair broke second important trend line, following break of one in early August. There is more than obvious head and shoulders pattern with neckline around 1.27 being broken. Target for pattern is around 1.21 to 1.22, so we should see more on downside.

EURUSD is in very strong down trend and it looks like it is going to stay like that.

Trade with trend.

End of the week reading

I believe in reading. It is a form of communication, which brings fresh ideas and new perspectives or involves reader in self-discussion which, in turn, leads to more work on current projects. That’s why I share (almost on weekly basis) links to the people who, in my opinion, contribute in positive manner to trading blogosphere.

 Here is this week’s selection of people and ideas:

 Afraid to Trade:

 Triple Fibonacci Confluence Reveals TrappedSP500 – Key Levels to Watch for Breakout

 Au.Tra.Sy. blog:

 Super Trend Following Index?

 the State of Trend Following in July

 Bespoke:

 S&P 500 P/E Ratio

 Country Default Risk

 CXO:

 Testing Engulfing Candlesticks

 MarketSci:

 The (NEW) State of Short-Term Mean-Reversion:July, 2010

 The Big Picture:

Boomer Bust

 The Kirk Report:

 Justification Mode

 The Talent Code:

 How to Be a Late Boomer