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Let us look at what is happening around us. Gas prices are up. Debt is up.
Banks, brokers, lawyers and accountants are being sued for misconduct, fraud,
and who knows what else. Major corporations are going bankrupt and it appears
that more are to follow. It is the earnings period and company after company
are coming out with earnings warnings. Corporate PE ratios are still way out
of line. Massive layoffs are still taking place. Huge amounts of stock are
being sold by insiders. Just today the report that someone sold 600,000 shares
of 144 stock in Ebay and that is just one example of 144 type stock being sold
in many big name companies. This isn't being done by some little old lady in
Ohio. Could there be any more bad news. There probably is. Then you look at
the chart of the S&P. It contains major stocks from both the Nasdaq and the
NYSE and Amex. It hasn't been able to take out a previous low. If you take
just a look at the chart in a simple manner, rather then some complicated
system or mathematical formula that you can make do anything you want it to.
The attached chart shows that the S&P is in an uptrend. If Gann's measured
move is to work then the up move isn't over yet and what we are looking at is a
retracement. It should be noted as a completion of a Gann measured move which
has been completed to the down side or if you are an Eliot fan you could say it
was and abc retracement with any number of other titles which Eliot theorists
could assign it. And what would the Swing Trader say? The simple fact is the
the low hasn't been taken out and neither has the recent high. So at this time
either the bull or the bear could become correct. In the mean time, if you are
a trader there is 100 point range there and any trader should be able to make a
good living trading a 100 point range in the S&P. Even if you miss the bottom
10% and the top 10% of the move, that still leaves about $20,000. A five lot
could make your year. The problem with most newbie traders is that they have
an opinion and that opinion gets them into trouble. If a trader can say, if
price does this then this will be my action and if price does that then I will
do this. There are always two trades on the board at all times and as long as
you remember that you should be OK. Good trading, Ira.
bobskc@xxxxxxxxxxxx wrote:
> At this site, they show the vix is low and while that is a concern, it is
> natural considering the trading range we have been locked into for so
> long. Note that it also says that the bullish sentiment is 64% which is
> horse pucky .. If you look at the Low Risk Com site at
> http://www.lowrisk.com/sentiment.htm , you will find bullish sentiment is
> 25%, down from 37% the week before and bearish sentiment is at 54%, up from
> 43%. A major difference in market sentiment and a large hole in the
> arguments made at ricchioreport site mentioned below.
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