Swing Chart Review: QQQQ, CSCO, OIH, GLD
First, let’s look at that swing short trade on the Qs. It’s looking anemic:
The price action could pass for a pullback into a new downtrend, and so it may be. But that volume spike today tells me there are still a significant number of buyers who see this dip as an “opportunity.” Darn them all to heck. Since today did not print a “lower low,” I’ll leave the stop alone, at 44.62. See yesterday’s post for the cold, scientific method I used to arrive at that number. 
And how about the Gorilla in the Corner, Cisco:
As you can see from the flag by Advanced Analyzer, today’s bar completed what’s called a Three Outside Up Bullish pattern. That’s a little wordy for me. And I think a clearer name would be “Bullish Engulfing Confirmation,” since that’s what it means.
A quick look at the Oil Services ETF, which broke out nicely today:
Twenty dollar oil. Yeah, right.
And I certainly can’t overlook gold, seeing as how it’s so closely related to my favorite soapbox, currencies. Is the gold going higher or are the dollars going lower? Well, in this case, it’s the dollars going lower, which means it takes more of ‘em to buy an ounce of gold:
That little pullback on the upper right edge of the chart perfectly matches the minor pullback the dollar has had since it broke down over $1.30/Euro. I know “down” and “over” may seem to contradict, but remember: more dollars per Euro means weaker dollars.
mrmike said,
November 30, 2006 @ 10:24 am
Good stuff!
AEM, AEMLW, GG, SA, AUY are acting well in the gold sector. Nice wide range bar on that CSCO. Have a buy on it over 27.3 today. Traded OIH, DVN (looks great if 73 holds), ATI, PTEN, COG in the oils arena.
Will said,
November 30, 2006 @ 8:29 pm
mrmike- thanks.. yeah, I love the way commodity-related stocks can trade independently of the (stock) market!
I had a post back in July about some friends who insisted on holding an oil stock while oil was going down, focusing only on the stock and saying crazy things like “the market was up today, I can’t understand why my stock went down.” To which I’d say, “what did oil do?” And they’d shrug.
Gold and oil are both headed higher as the dollar heads lower, so we can pick and choose the stock whose action, volatility, etc we prefer, but as long as we have one eye on the underlying commodity and it’s moving in the right direction, all is well.