Comments on: The Chart That Cried Wolf - Wait For Confirmation http://dummyspots.com/2007/04/the-chart-that-cried-wolf/ Stocks, Options, Currencies and One Big Dummy Tue, 06 Jan 2009 02:35:55 +0000 http://wordpress.org/?v=2.2.1 By: Born2Code http://dummyspots.com/2007/04/the-chart-that-cried-wolf/#comment-3027 Born2Code Mon, 30 Apr 2007 18:27:21 +0000 http://dummyspots.com/2007/04/the-chart-that-cried-wolf/#comment-3027 i remember mark hanes on cnbc proclaiming in astonishment that we just had 58 consecutive up days on the nasdaq... we all know how that ended... Maoxian is talking about manicurists getting rich in China with the market going up like crazy over there. i know exactly what u are talking about... however after reading ken fischer's latest book i am not about to bail on this market till a downtrend is established... i will get a hurt a bit in the first part of the downtrend but i will live with that... on another point, i do not short RSI for swing trading. i rather short down trending stocks on up days as they kiss off resistance and turn back down. i remember mark hanes on cnbc proclaiming in astonishment that we just had 58 consecutive up days on the nasdaq… we all know how that ended… Maoxian is talking about manicurists getting rich in China with the market going up like crazy over there.
i know exactly what u are talking about… however after reading ken fischer’s latest book i am not about to bail on this market till a downtrend is established… i will get a hurt a bit in the first part of the downtrend but i will live with that…

on another point, i do not short RSI for swing trading. i rather short down trending stocks on up days as they kiss off resistance and turn back down.

]]> By: Will http://dummyspots.com/2007/04/the-chart-that-cried-wolf/#comment-3026 Will Mon, 30 Apr 2007 11:54:35 +0000 http://dummyspots.com/2007/04/the-chart-that-cried-wolf/#comment-3026 B2C - agreed, but depending on the context, the emergence of indecision is commonly the first sign of a reversal after a trend of any length. A gap-up doji or a Hanging Man in an overbought uptrend is often signaling that the buying is exhausted, and so they're a heads-up to be prepared to trade any (bearish) confirmation. The same candles in a trend that's not "overbought", and especially if they don't gap away from the previous day, are exactly as you say, a guaranteed sign that the market will go up... or down... or neither. For swing trading, a simple strategy like screening for stocks that are overbought on the RSI, then looking for individual reversal candles, has been a pretty solid play. However, every now and then it turns completely useless (like now), and makes me curious as to what's happening in the bigger picture. My own personal guess, and that's all it is, is that the hundreds of billions of excess dollars sloshing around take years to sop up, and thus the Big Cycle operates on a different time scale than me. I find myself rather myopic sometimes. I think the longer trend after last November (the continued thrust thru February 22), and the shorter one from Mid-March till now are both out of the ordinary in the way they kept going... and going, with no pause to take a breath. Reminds me of the good old days back around '98, when overbought only became more overbought. To me, this is all just a challenge to remember to stay with the trend "until it ain't", something I still have trouble with. Thanks for the visit! B2C - agreed, but depending on the context, the emergence of indecision is commonly the first sign of a reversal after a trend of any length. A gap-up doji or a Hanging Man in an overbought uptrend is often signaling that the buying is exhausted, and so they’re a heads-up to be prepared to trade any (bearish) confirmation. The same candles in a trend that’s not “overbought”, and especially if they don’t gap away from the previous day, are exactly as you say, a guaranteed sign that the market will go up… or down… or neither.

For swing trading, a simple strategy like screening for stocks that are overbought on the RSI, then looking for individual reversal candles, has been a pretty solid play. However, every now and then it turns completely useless (like now), and makes me curious as to what’s happening in the bigger picture. My own personal guess, and that’s all it is, is that the hundreds of billions of excess dollars sloshing around take years to sop up, and thus the Big Cycle operates on a different time scale than me. I find myself rather myopic sometimes.

I think the longer trend after last November (the continued thrust thru February 22), and the shorter one from Mid-March till now are both out of the ordinary in the way they kept going… and going, with no pause to take a breath. Reminds me of the good old days back around ‘98, when overbought only became more overbought.

To me, this is all just a challenge to remember to stay with the trend “until it ain’t”, something I still have trouble with.

Thanks for the visit!

]]> By: Born2Code http://dummyspots.com/2007/04/the-chart-that-cried-wolf/#comment-3025 Born2Code Sun, 29 Apr 2007 16:40:53 +0000 http://dummyspots.com/2007/04/the-chart-that-cried-wolf/#comment-3025 i am no candle expert, but these are indecision candles and not topping candles. indecision, by definition, can be resolved up, down or sideways. i am no candle expert, but these are indecision candles and not topping candles. indecision, by definition, can be resolved up, down or sideways.

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