Technical Analysis of STOCKS & COMMODITIES
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Article Archive For Stella Osoba, CMT
DownloadThe Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Investing In Artificial Intelligence And Robotics Stocks...
Eli Lilly
ARTICLE SYNOPSIS ...Eli Lilly & Co.(LLY) is a large cap pharmaceutical company in the health care sector. As well as the maker of many popular drugs, LLY is also the maker of Zepbound, the popular weight loss drug. Let's take a look at its price charts....
Is It Time To Give Peloton a Second Look?
ARTICLE SYNOPSIS ...Peleton Interactive Inc. (PTON), the once popular stationary exercise bike and interactive cycling classes provider was a darling stock in the consumer discretionary sector, having won the hearts of exercise enthusiasts and Wall Street types alike. But then the bubble burst and the stock went on to descend to single digit lows. After a downtrend of more than three years, is it now time to give PTON a second look?...
Lemonade's Rounding Bottom
ARTICLE SYNOPSIS ...Lemonade (LMND) is an insurance holding company headquartered in New York, NY. It recently completed the formation of a rounding bottom, or saucer, on its price chart....
Blackberry's Revival
ARTICLE SYNOPSIS ...Blackberry Limited (BB), formerly called Research in Motion, was founded in 1984. In the last decades of the twentieth century, the company led the mobile and pagers industry with its iconic blackberry phones....
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Is The Presidential Cycle Still Relevant Today For Stock Market Analysis...
Lululemon's V-Shaped Recovery
ARTICLE SYNOPSIS ...With its recent V-shaped recovery is Lululemon (LULU) worth watching right now?...
Meme Coins and Solana
ARTICLE SYNOPSIS ...After the Trump and Melania meme coins were launched on Solana's blockchain, Solana hit an all-time high in January 2025 of $294.95, surpassing its prior highs of $259.95 set in November 2021....
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Where Is The Bear...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Tariffs And The Stock Market...
Is TSLA a Meme Stock?
ARTICLE SYNOPSIS ...Meme stocks are those stocks that have gained popularity through social sentiment. Often this sentiment is fueled by social media and is accelerated by retail investors. Is Tesla one such stock?...
Home Builders
ARTICLE SYNOPSIS ...With the Federal Reserve cutting the Fed's Fund Rate at their meeting in September, this would be an interesting time to look at home builders' stocks. Will lower interest rates be a positive for this segment in the market?...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Anticipating Downtrends...
Is MSTR A Proxy For Bitcoin?
ARTICLE SYNOPSIS ...Microstrategy, Inc. (MSTR) is a software company that was founded in 1989. It provides enterprise analytics and other software platforms through licensing agreements and cloud-based solutions. With its recent announcement of the acquisition of another $452 million worth of Bitcoin in September 2024, making the company the largest corporate holder of Bitcoin, does this make MSTR a proxy play for the cryptocurrency?...
Getting In On The AI Boom
ARTICLE SYNOPSIS ...Generative Artificial Intelligence, which hit the scenes in the early 2020s, has become the latest tech craze. With these AI learning models set to change everything from how we work to how we shop, how exactly can an investor get a toe hold in this fascinating and fast-growing space?...
Is It Time to Pay Attention to ULTA?
ARTICLE SYNOPSIS ...Ulta Beauty, Inc. (ULTA) is a large capitalization specialty retailer in the consumer discretionary sector. Its stock had been in a downtrend recently as earnings misses caused the market to punish the stock. But in a Q2 2024 13F filing, eagle-eyed market watchers noticed that Berkshire Hathaway had added shares of ULTA to their portfolio....
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Reviewing Market Volatility...
CoinBase As A Crypto Play
ARTICLE SYNOPSIS ...With the recent surge in Bitcoin prices, there are other stocks out there that may ride the rise in crypto, one such is Coinbase Global, Inc. (COIN)....
Does Netflix Still Have Room to Run?
ARTICLE SYNOPSIS ...On October 17, 2024, Netflix (NFLX) reported quarterly earnings and beat analysts' estimates for revenue and earnings leading to a surge in its stock price. Does NFLX shares still have room to run?...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Reading Volatility Using The ATR...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: How Fearful Are You...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Overcoming The Dunning-Kruger Effect In Trading...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Don't Ignore Negative Divergences...
Managing the Short Trade
ARTICLE SYNOPSIS ...Peloton (PTON) has not had along history as a public company. Its IPO was on September 26, 2019 when the shares were priced at $29 per share. Since then, its share price has seen substantial gains buoyed by Covid lockdowns and significant declines. Without the benefit of hindsight, good technical analysis skills and the appropriate level of risk taking and risk management would have made this a very successful short trade....
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: How many eggs can one basket hold...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Reversal Or Reaction: Which Is It...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Self-Trust Is Self-Empowerment...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Remembering To Take Profits...
Understanding The Bullish Percent Index
ARTICLE SYNOPSIS ...How bullish or bearish is the market at any point? Is a current market trend likely to continue or reverse? Comparing the current number of buy signals to the current number of sell signals in a market of stocks provides an easy indication of the general bullishness or bearishness of that market, as well as whether that market is reaching an overbought or oversold saturation point. And using a percentage-based scale such as the one discussed here gives you an index with levels you can read and interpret. Here's how to use this indicator...
VRDN And Its Reverse Stock Splits
ARTICLE SYNOPSIS ...Viridian Therapeutics, Inc. (VRDN) is a small cap biopharmaceutical company which engages in the development of proprietary RNA targeted therapeutics. Since its Initial Public Offering in June 2014, the company has reduced the number of its shares through two reverse stock splits. A reverse split affects the number of shares outstanding but not the market capitalization of the company....
Zillow
ARTICLE SYNOPSIS ...With the consensus building that the Fed will begin cutting the Federal Funds Rate in September 2024, there is hope that this will invigorate the housing market as reluctant sellers enter the market and priced out buyers see more housing inventory possibly causing some downward pressure on current sky-high house prices....
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Deconstructing the Hindenburg omen...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: The Put/Call Ratio For Market Breadth And Sentiment...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Spotting And Trading Breakouts...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Before Risk And Return...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Why You Must Trust The Chart And Not Yourself...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Trust The Charts, Even When It's Hard...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Buy When Stocks Are Cheap...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: History Never Repeats...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Sideways Markets Are Dangerous...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Do Not Invest In The Present...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Year-end Market Analysis...
Using Price Channels
ARTICLE SYNOPSIS ...One longstanding and fundamental charting technique is the use of price channels. Here's why so many techniques are based on the concept and why technicians consider them so useful...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Markets And News...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Lessons From Mr. Market...
Market Volatility and the INDU
ARTICLE SYNOPSIS ...On Friday, August 25, 2022, the Dow Jones Industrial Average (INDU) dropped a whopping 1000 points. This was a direct reaction to Jeremy Powell, the Chairman of the Federal Reserve's hawkish stance on interest rates....
Rivian Automotive, Inc.
ARTICLE SYNOPSIS ...When the news is bad... when nobody loves the stock. But maybe the shrewd investor should keep a watchful eye on the technicals and ignore everything else....
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Keep Your Market Outlook Based In Reality...
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: Cultivate The Art Of Perception...
Value Stock
ARTICLE SYNOPSIS ...On May 6, 2022, the DOW plunged over 1,000 points. The S&P 500 and NASDAQ also posted severe losses. By this time, many popular growth stocks had lost over 50% of their values and were firmly in bear market territory. One of the few sectors that seemed to have escaped the worst of the rout was consumer staples. This sector is populated by value stocks many of which seem to be serenely unaffected by the current state of chaos in the larger market....
Are We There Yet?
ARTICLE SYNOPSIS ...Just like the German proverb co-opted by finance which says that trees don't grow to the sky, so also can we assume that roots don't burrow all the way to the center of the earth? If one were to dig deep enough, we could probably pull out of the earth even the deepest of roots. So when we look at stocks which have been in a steady decline we know that eventually most downtrends will end....
Using Price Channels
ARTICLE SYNOPSIS ...Price channels, also known as Donchian channels, were developed by Richard Donchian (1905-1993). Donchian was a pioneer in the field of commodities and futures trading. In 1949 he established the first futures fund. His rule based trading system became the basis for many modern trend following systems including the famous Turtle Trading System....
Symmetrical Triangles
ARTICLE SYNOPSIS ...Sometimes it's useful to go back to basics to remind ourselves of classic chart patterns that may have receded in importance during the recent bull market but which now seem to pop up with more consistency. One such pattern is the symmetrical triangle...
The Long Play
ARTICLE SYNOPSIS ...How long is too long to hold a stock? Many people who seek to use technical analysis to trade have very short-term outlooks. Technical analysis is often conflated with day trading. But there is no reason not to use technical analysis to spot and enter long-term trading opportunities....
Positive Divergence
ARTICLE SYNOPSIS ...With lots of stocks making new lows, many charts are beginning to show positive divergencies when compared with their indicators....
Using Upside-Down Charts
ARTICLE SYNOPSIS ...Sometimes, to improve clarity, it pays to flip a chart upside down and study it that way for a while...
The Upper-Right Of The Chart Is Not Resistance
ARTICLE SYNOPSIS ...What goes up comes down, but when...
LMP Automotive Holdings, Inc.
ARTICLE SYNOPSIS ...LMP Automotive Holdings, Inc (LMPX) is a small capitalization stock in the consumer discretionary sector. Its chart appears to deserve a second look....
To REIT Or Not To REIT?
ARTICLE SYNOPSIS ...Real Estate Investment Trusts (REITs) are modeled after mutual funds. They are often publicly traded and they purchase, manage and rent physical real estate. Typically, a particular REIT will have a specific property type they invest in like single-family homes, strip malls etc. Often, investors looking to get exposure to real estate without owning the physical asset will consider investing in REITS....
The Savvy Technician
ARTICLE SYNOPSIS ...Recognizing and applying technical chart patterns to trading. This month: History Doesn't Repeat...
Trading Double Top Breakouts
ARTICLE SYNOPSIS ...One of the common point and figure signals is the double top breakout. This is when a column of X's break above a prior column of X's separated by a middle column of O's.This short article shows how to spot this signal and some ways to incorporate it into your trading....
Can Crosses Help Our Trade?
ARTICLE SYNOPSIS ...The death cross and golden cross are technical patterns that are often used to signal stock selloffs or rallies...
Point & Figure Poles
ARTICLE SYNOPSIS ...Poles are Point and Figure reversal patterns. They are never continuation patterns. It is useful to understand how they work because they often present the knowledgable trader opportunities to enter or exit a trade before a price reversal....
Playing Crypto
ARTICLE SYNOPSIS ...With Bitcoin ($BTCUSD) surpassing $50,000, one might wonder how to get exposure in this segment of the market?...
Mind The Gap
ARTICLE SYNOPSIS ...Understanding gaps and their significance can be useful for getting in and staying in the trade. Here's a refresher...
Trading Bull Traps
ARTICLE SYNOPSIS ...In this article we'll look at bull traps, what they mean, and the best way to trade them...
Managing Trading Fear And Stress
ARTICLE SYNOPSIS ...Keeping emotion out of your trading decisions is always an important part of managing your trading. Understanding the biological processes behind our reactions to stimuli can help us find ways to counter unproductive emotions...
Does This Chart Look Bearish?
ARTICLE SYNOPSIS ...The most important thing we as traders do is determine the next probable move in prices. With this in mind, let's take a look at Grubhub Inc. (GRUB)....
The Time To Short A Stock Is Not When It's In An Uptrend
ARTICLE SYNOPSIS ...With the madness surrounding stocks like GME, it seems that now is a good time to go over this basic principle of trend trading....
Using The Commodity Channel Index
ARTICLE SYNOPSIS ...The commodity channel index (CCI) is a popular indicator developed by Donald Lambert and first published in an edition of Commodities magazine in 1980. It is named the CCI because Lambert developed the index to help him identify cyclical turns in the commodities market. Since then it has gained popularity for its versatility, as it can be applied to stocks, currencies, and indexes...
Contradictory Price Patterns
ARTICLE SYNOPSIS ...Oftentimes, price charts will show price patterns that are contradictory. What should you do...
Penn Virginia Corp.
ARTICLE SYNOPSIS ...The energy sector is currently the best preforming sector year-to-date, so now seems to be a good time to look at one of its components and compare its performance to both the sector and the S&P 500 index....
The Time To Short A Stock Is Not When It's In An Uptrend
ARTICLE SYNOPSIS ...With the madness surrounding stocks like GME, it seems that now is a good time to go over this basic principle of trend trading...
Using The Commodity Channel Index
ARTICLE SYNOPSIS ...The Commodity Channel Index (CCI) is a popular index developed by Donald Lambert and first published in an edition of the Commodities magazine in 1980. It is named the CCI because Lambert developed the index to help him identify cyclical turns in the commodities market. Since then it has gained popularity for its versatility as it can be applied to stocks, currencies and indices....
Parabolic SAR
ARTICLE SYNOPSIS ...When managing a position, we often ask ourselves when is the best time to sell to preserve profits, and if we do sell, when to get back in or reverse our position. The Parabolic SAR can help to remove some of that guesswork....
The Upper Right Of The Chart Is Not Resistance
ARTICLE SYNOPSIS ...One mistake that some people make is to look at a chart in a defined trend and think because it has reached the top of the chart (in an uptrend), price has to decline. The upper right of the chart is not resistance. It is simply a line generated by the computer and will adjust according to what price does....
Recognizing Breakouts
ARTICLE SYNOPSIS ...Sometimes it's useful to go back to basics to remind ourselves of concepts that underpin successful trading. One such concept is the breakout....
Mind The Gap
ARTICLE SYNOPSIS ...Gaps are periods on charts during which no trading has taken place. They are represented by blank spaces. They can form on any time frame and represent periods when high buying or selling volume, often after market close or before market open, has taken place. Understanding gaps and their significance can be extremely useful for getting in and staying in the trade....
Can't Pay, Won't Pay!
ARTICLE SYNOPSIS ...According to its first quarter earnings report, Vornado Realty Trust (VNO), the largest owner and manager of retail rental space in Manhattan collected only 53% of rent due from its retail tenants in April 2020. Among its other real estate businesses, VNO rents retail space to major well-known retail clients many of whom did not pay rent in April and are unlikely to pay rent in May amid the coronavirus lock down in New York City. This has pummeled the share price, causing its stock to decline over 50% in less than two months....
Symmetrical Triangles
ARTICLE SYNOPSIS ...Sometimes it's useful to go back to basics to remind ourselves of classic chart patterns which may have receded in importance during the recent bull market, but which now seem to pop up with more consistency. One such pattern is the symmetrical triangle....
Will AirBnB's Decline Help Redfin?
ARTICLE SYNOPSIS ...Travel is nearly at a standstill. One of the many companies negatively impacted by this is Airbnb. Recently, Redfin (RDFN) CEO Glenn Kelman said that the shut down of the vacation travel market has caused Airbnb owners to rush to offload their properties. Is this a plus for RDFN?...
Untidy Charts
ARTICLE SYNOPSIS ...Remdesivir is an antiviral medication developed by Gilead. The Federal Drug Administration recently authorized its use in COVID-19 patients because research has shown that it shortened recovery times in people seriously ill from the coronavirus. News of the clinical trials was already out weeks earlier and the trading in the company's stock reflected that. Trading behavior caused what I call an untidy chart to form....
Are There Any Blue Chips Left?
ARTICLE SYNOPSIS ...Blue Chips are large multinational companies with sound balance sheets and sounder reputations. They have been in their industry for a considerable amount of time and ownership of their shares are generally regarded as safe investments. They are usually able to weather economic downturns with their superior balance sheets. Many of the companies that are in the Dow Jones Industrial Average are regarded as blue chips. Let's take a look at the price behavior of Walt Disney Co. (DIS) and see how this entertainment behemoth has weathered the economic shutdown caused by the pandemic known as CO...
Trading Bull Traps
ARTICLE SYNOPSIS ...Point and Figure (P&F) charting is perhaps the oldest method of price charting in the Western world. But they are often overlooked because they are perceived as complex and archaic. I have found that getting familiar with P&F charts can add value to your analysis. In this article we will look at Bull Traps, what they mean and the best way to trade them....
The Three Billion Dollar Fraud
ARTICLE SYNOPSIS ...In February 2020, Wells Fargo (WFC) agreed to pay $3 billion to settle criminal and civil charges which resulted from its fraudulent treatment of some bank customers over a 14-year period, from 2002 until 2016. Because of impossible sales targets set by senior executives, low-level staff opened millions of accounts in customers' names without their authorization. With the settlement behind them, is the worst over for this stock?...
An Expensive Trade
ARTICLE SYNOPSIS ...Coty, Inc. (COTY) has been in the news recently because of the story from Forbes alleging that the value of Kylie Cosmetics was inflated. COTY's shares took a hit because in January, it had forked over $600 million to buy a 51% stake in Kylie Cosmetics. At the time the deal was announced in November 2019, some analysts thought the price they were paying for what was a young, celebrity brand seemed high....
Contradictory Price Patterns
ARTICLE SYNOPSIS ...Often times, price charts will show price patterns which are contradictory. What should you do?...
Can Crosses Help Our Trade?
ARTICLE SYNOPSIS ...The Death Cross and Golden Cross are technical patterns that are often used to signal stock selloffs or rallies....
Spotify's
ARTICLE SYNOPSIS ...Spotify Technology (SPOT), the digital music streaming service has been one of the wins in this stock market. Its share price has rocketed from a low of $119.18 on March 16, 2020 to a high of $274.30 on July 2, 2020. So what's next for this stock which has been trading as a public company for less than three years?...
What's A Drug Worth?
ARTICLE SYNOPSIS ...Gilead's (GILD) Remdesivir appears to have been shown to be somewhat effective in the treatment of patients severely affected by Covid-19, which is the disease caused by the coronavirus. This news has had an effect on the share price of the company. The market had been waiting for GILD to set a price for the drug, which they announced last week....
The Steve Jobs Of Gap
ARTICLE SYNOPSIS ...In 2015, Kanye West told style.com that he wanted to be "the Steve Jobs of the Gap." In 2020, it was announced that Gap, Inc. (GPS) and Yeezy have struck a 10 year collaboration deal. The news sent shares of GPS soaring on Friday, June 26, 2020....
What's The Problem With Cannabis Stocks?
ARTICLE SYNOPSIS ...For the last year cannabis stocks can't seem to do anything right. They have mostly been on a decline with some stocks losing 50% and more of their valuations from their 2018 peaks. This article will take a look at one such stock, Canopy Growth Corp. (CGC)....
Using Upside Down Charts
ARTICLE SYNOPSIS ...Sometimes to improve clarity, it pays to flip a chart upside down and study it that way for a while....
Event Driven Trades
ARTICLE SYNOPSIS ...Coronaviruses are a family of viruses that can cause diseases in animals, including humans, and birds. Common human coronaviruses usually cause illnesses like the common cold, which most people would have had at some point in their lives. Sometimes, a strain of the coronavirus will mutate causing more severe symptoms in some people. This happened with the Middle East Respiratory Syndrome-related coronavirus (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV). Recently, Chinese authorities detected a new outbreak of the coronavirus which has been labelled 2019-nCoV. While this virus is ...
Down But Maybe Not Out
ARTICLE SYNOPSIS ...Since touching a high of $67.61 on January 20, 2020, Intel Corp.(INTC) has been in a downtrend. This DOW behemoth, founded in 1968 may be down but is it out? Let's study some charts....
Wilder's Parabolic SAR
ARTICLE SYNOPSIS ...When managing a position, we often ask ourselves when is the best time to sell to preserve profits, and if we do sell, when to get back in or reverse our position. The parabolic SAR can help to remove some of that guesswork...
Bear Traps In Point & Figure
ARTICLE SYNOPSIS ...A bear trap is a bullish signal, so recognizing them and understanding how to trade them can be very useful...
The Wisdom Of Wyckoff
ARTICLE SYNOPSIS ...At the root of all markets are the participants. Human nature does not change and therefore there is much to appreciate and learn from the observations Richard D. Wyckoff made nearly a hundred years ago...
Tesla's Post Stock Split Performance
ARTICLE SYNOPSIS ...Tesla (TSLA) recently admitted a 5:1 stock split after which its stock has shown massive growth and jumped 8%. It could go higher, let's look at its chart....
Reversing Your Natural Impulses
ARTICLE SYNOPSIS ...To trade successfully, one has to fight against and reverse two deep seated instincts: fear and hope. You must fear that a loss will develop into a bigger loss and hope that a successful trade will generate larger profits....
Eli Lilly
ARTICLE SYNOPSIS ...The National Institute for Health (NIH) and the Foundation for the NIH (FNIH) announced on April 17, 2020 via a news release that they are bringing together sixteen of the leading biopharmaceutical companies in conjunction with other national and international agencies to develop "an international strategy for a coordinated research response to the COVID-19 pandemic." One of these leading pharmaceutical companies is Eli Lilly and Company (LLY)....
What Now For The Much Maligned Cruise Industry?
ARTICLE SYNOPSIS ...As of April 12, 2020, the COVID-19 pandemic has resulted in over half a million cases in the US and over 20 thousand deaths. While these numbers look set to climb higher, governments around the world have taken unprecedented actions to try to slow the spread. Such actions include the Center for Disease Control's (CDC) No Sail Order for the cruise industry. With no revenue coming in and no access to stimulus funds, how will these cruise lines stay afloat? Remember, sentiment drives prices and with that in mind, let's take a look at the charts of three major cruise liners....
Toilet Paper Shortages in the Age of COVID-19
ARTICLE SYNOPSIS ..."We're all sick and the kids' schools are closed, so we're all home. And it's raining. And the stores are out of toilet paper and we have seven butts to wipe and no toilet paper to be found," so said the celebrity actress and mother of seven, Tori Spelling. The toilet paper shortage was real. Even the Newport Oregon Police Department begged its residents to stop calling them because there was no toilet paper in the shops. So why is this a technical analysis story? Because the manufacturers of toilet paper deserve a look in this volatile and turbulent market....
When Fear Breaks Out!
ARTICLE SYNOPSIS ...The week of February 24, 2020 will go down in history as one of the most volatile in the stock market's history. The S&P 500 fell almost 400 points to close below 3,000 for the first time since October 2019. Further declines look inevitable. Wall Street's "Fear Index", the VIX, closed at 40. Now would seem to be a good time to take a closer look at this popular measure of market volatility....
Signals And Confirmation
ARTICLE SYNOPSIS ...Many people say candlestick signals do not work. Or maybe they just didn't know what confirmation to look for...
Bear Traps In Point And Figure
ARTICLE SYNOPSIS ...A bear trap is a bullish signal, so recognizing them and understanding how to trade them can be very useful. To illustrate the classic bear trap, we shall use Facebook (FB) which recently completed one....
The Short Squeeze
ARTICLE SYNOPSIS ...When a company is heavily shorted with expectations that its poor fundamentals will push the stock's price lower, the large number of shorts can be a reason for the exact opposite to occur; a quick rise in the stock. This is called a short squeeze. We shall look at this interesting phenomena using Pier 1 Imports (PIR) as our example....
It Can Always Go Lower
ARTICLE SYNOPSIS ...During the summer in Pamplona, Spain, there is a festival known locally as the San Fermin festival. The highlight of this festival is the Encierro, or running of the bulls. The running of the bulls involves running in front of about six, sometimes ten cattle which have been let loose on a sectioned off part of the town's streets. If you choose to participate in this highly risky endeavor you must know what you are doing. This requirement is not dissimilar to stock trading....
Gravity Catches Up With GRVT
ARTICLE SYNOPSIS ...Gravity Co., Ltd. (GRVY) is a developer, publisher and distributor of online games with its headquarters in South Korea. It was established in 2000 and its shares, which had been in an uptrend until a few months ago, were hit by a sudden bout of gravity, forcing them to take a long painful plunge. So what's next for the stock?...
Wyckoff And Livermore: The Conversations
ARTICLE SYNOPSIS ...We learn from those who have come before us. Richard D. Wyckoff and Jesse Livermore both lived and worked in the early part of the 20th century, applying their craft to the financial markets. Today, their insights into the art of speculation provide wisdoms that still apply...
Lyft or Uber?
ARTICLE SYNOPSIS ...With the debuts of these two ride sharing companies on public exchanges, is it possible to choose the better one to trade, or are they both best avoided?...
When Elephants Fight
ARTICLE SYNOPSIS ..."When elephants fight it is the grass that gets trampled." African proverbThe world's two largest economies are fighting and it is not pretty. Let me rephrase that, the leaders of the two largest economies in the world are engaged in a down-and-out mean and scrappy brawl. As they throw their considerable muscle and might around, it is the ordinary people who inhabit those two economies that are getting trampled. How bad will it be? Will a sudden truce send markets soaring in a relief rally? Will any of this even matter? Was the uptrend already over even before the current spat b...
Waiting For Clarity
ARTICLE SYNOPSIS ...Sometimes it is difficult to determine what the market will do next. We want to be on the right side of the market and our fear of loss can mean we become hyper-vigilant and over sensitive to minor fluctuations. We try to decipher every market move, and as a result we get too close to the market and lose sight of the forest through the trees....
Trading Rules
ARTICLE SYNOPSIS ...When a security is in a well established trend, taking a position can raise so many perplexing questions. What to do?...
Never Buy On Hype
ARTICLE SYNOPSIS ...Tilray, Inc. (TLRY) is a cautionary tale of why it is never a good idea to buy a stock on hype....
Actual Vs Consensus
ARTICLE SYNOPSIS ...The S&P declined by over 54 points on Friday March 22, 2019, and yet Tiffany & Co., (TIF) shares climbed, so what does this tell us about the stock?...
Do Nike and Footlocker Move in Lockstep?
ARTICLE SYNOPSIS ...Nike, Inc (NKE) makes up about two thirds of Foot Locker's (FL) purchases, therefore it would make sense if the stocks of these two companies moved in lockstep. So, is this the case?...
When Hammers Fail
ARTICLE SYNOPSIS ...The hammer is one of the classic candlestick chart patterns that studies have shown tend to be more reliable than other candlestick patterns. But as sometimes happens, even the most reliable of patterns will fail. What do you do when this happens?...
Transunion
ARTICLE SYNOPSIS ...With the partial government shut down now breaking records as the longest in U.S. history, some 800,000 furloughed workers are facing varying levels of financial insecurity. According to a 2017 report by CareerBuilder, the employment website, 78% of American workers are living paycheck to paycheck. This means that for workers already undergoing financial stress, missing credit card payments may be unavoidable. The impact on credit scores of missed payments varies depending on whether it is part of a pattern or a one off. While one 30-day late payment should not cause lasting damage, a late 60-...
When Divergences Work
ARTICLE SYNOPSIS ...Spotify Technology (SPOT) is the popular global music streaming platform used by over 190 million monthly active users worldwide as of November 2018. SPOT's Initial Public Offering (IPO) was on April 3, 2018 and despite the fact that on that day it opened at 165.90 and closed at 149.01, its IPO was generally considered to be a success....
GrubHub
ARTICLE SYNOPSIS ...GrubHub, Inc. (GRUB) is the mobile and online platform company that allows people to order meals from numerous restaurants for pick-up and delivery. On September 14, 2018, its share price closed at a high of 146.11. Just over three months later, on December 24, 2018, the share price had plunged to close at a low of 67.84. Let's review the technicals to see if they can tell us if the worst is over for the stock....
Taking A Look At NOW
ARTICLE SYNOPSIS ...ServiceNow (NOW) has recently been notching impressive gains in its share price with its recent quarterly earnings surprise. What do the technicals say about the current trend continuing?...
Trading Earnings Gaps
ARTICLE SYNOPSIS ...Gaps are areas on a price chart where no trading has taken place during a certain trading period. There could be any number of reasons for the presence of gaps, but one of the most common is a quarterly earnings surprise....
From KORS to CPRI
ARTICLE SYNOPSIS ...Michael Kors acquired Jimmy Choo for $896 million in 2017 and Versace for $2.1 billion in 2018. The company also changed its name to Capri Holdings (CPRI). With these two acquisitions, CPRI looks set to overhaul the existing power structure of global fashion long dominated by French, Swiss and Italian conglomerates by creating the first American luxury fashion conglomerate. How will its share price fare?...
The Trouble With Tilray
ARTICLE SYNOPSIS ...The trouble with Tilray, Inc. (TLRY), the Canadian based grower, processor and researcher of medical cannabis, is that its share price has hit a very rough patch....
Signals And Confirmation
ARTICLE SYNOPSIS ...Trading well is all about reading charts with a cynical cold eye. The further away we move from our emotions, the more we are able to see and assess. Many people say candlestick signals do not work. They are right, sometimes. And then again what about the times they are just plain wrong? Knowing how to use candlesticks means interpreting patterns which become our signals. Interpreting these signals means that you are constantly looking for confirmation to prove or disprove your analysis. Lack of confirmation means that the signal failed. Working with candlesticks means that you are confident e...
Trading Strong Uptrends
ARTICLE SYNOPSIS ...Cisco Systems, Inc. (CSCO) is a large cap value technology company. It was in the news recently for reaching a settlement with eighteen U.S. states to pay $8.6 million to settle claims that it sold surveillance technology to federal, state and local government agencies that it knew had a serious security flaw. James Glenn was the whistle blower who was working as a CSCO subcontractor in Denmark when in 2008 he discovered that the video software CSCO was selling to governments could be hacked into and taken over without detection. It has taken over a decade for the company to settle the claim r...
Trading On Bad News
ARTICLE SYNOPSIS ...Equifax (EFX) confirmed a data hack affecting over 200,000 of its customers on July 29, 2017. But the full extent of the breach was not revealed until September 2017, when EFX announced that the data breach had exposed the personal information of about 147 million people. In July 2019, the Federal Trade Commission announced that EFX had agreed to a global settlement with the FTC, the Consumer Financial Protection Bureau and 50 US states and territories. The settlement includes up to $425 million to help people affected by the data breach. This short piece will look at the recent price action o...
TripAdvisor
ARTICLE SYNOPSIS ...TripAdvisor, Inc. (TRIP) is the world's largest travel website. For the quarter ended September 30, 2017, TripAdvisor's branded websites had 455 million average monthly unique visitors, or "about one in every 16 people on earth". These visitors posted reviews and opinions on 7.5 million places to stay, places to eat and things to do around the world. It will not be an exaggeration to say that TRIP "is to travel as Google is to search, as Amazon is to books, as Uber is to rides - so dominant in the travel industry, that it is almost a monopoly." TRIP has been tradi...
Trading Flags
ARTICLE SYNOPSIS ...Chipotle Mexican Grill, Inc. (CMG) has been on a tear recently. Its share price has surged over 42% since its reversal on December 26, 2018. On January 25, 2019, the rapid rise in its share price slowed and CMG proceeded to form a flag. This short article is about the predictive qualities of flags....
Don't Assume You Know
ARTICLE SYNOPSIS ...The markets can be brutal and unforgiving places, which is why assuming you know what it will do next is often a recipe for a swift lesson in humility....
Is the Worst Over?
ARTICLE SYNOPSIS ...General Electric (GE) has been in a painful downtrend for the last two years. In fact, its stock has fallen so sharply that on June 26, 2018, it was replaced by Walgreens (WBA) as a Dow component. That GE was an original member of the 30-company index and had been in the DOW continuously since 1907 only served to increase the significance of its decline. Now, a close at $7.99 on November 12, 2018 has some asking, is the worst over for this battered stock?...
Where Next for the Dow?
ARTICLE SYNOPSIS ...The last few months have seen increased volatility in the stock market. When caught up in the stress that several hundred points in daily swings can bring, it is tempting to wade deeper into the tall grass amid all the uncertainty and lose sight of the forest for the trees. So let's take a step back and attempt to answer the question which is the title of the piece. Where next for the Dow Jones Industrial Average?...
It's Over When It's Over
ARTICLE SYNOPSIS ...One of the ways we give back all our gains is by not recognizing when a successful trade is over. Learning to step back and do nothing after exiting a successful trade can be hard, but is an essential step to achieving trading mastery....
Home Depot
ARTICLE SYNOPSIS ...Since its close at 206.05 on January 26, 2018, Home Depot (HD) has been in a rout. What do the technicals say about this Dow darling?...
How Much is a Star Performer Worth?
ARTICLE SYNOPSIS ...With Tesla (TSLA) in the news because its shareholders are set to vote on a massive $2.6 billion compensation package to be paid to the company's part time Chief Executive Officer, Elon Musk, over the next decade, now seems like an opportune time to study the chart of this volatile stock....
Staying Mindful
ARTICLE SYNOPSIS ...Regeneron Pharmaceuticals, Inc. (REGN) has been trading below its 50-day moving average since August 2017. Its stock, which once touched highs of 605, is now trading at 293. So what's in store for this stock? Is it wise to wait for an opportunity to short the stock, or is the worst behind it and should we look for a rebound?...
A Look At The DOW's Newest Member
ARTICLE SYNOPSIS ...On June 29, 2018, General Electric (GE) got dropped from the Dow Jones Industrial Average (DOW). It was replaced by Walgreens Boots Alliance (WBA), a multinational holding company with several distinctive brands offering prescription and non-prescription drugs as well as health related services and other general goods....
Kicked out of the DOW
ARTICLE SYNOPSIS ...Getting kicked out of the DOW is the most recent in a long line of ignominies for this iconic multinational conglomerate which has been in business since 1892. But bad news for a stock can be a contrarian indicator. Has GE bottomed at last or is there more pain ahead for this original member of the DOW and the only stock to have been continuously in the index since 1907?...
Momentum and Simple Moving Averages
ARTICLE SYNOPSIS ...Sometimes a stock's price will move so far away from its simple moving average (SMA) that the temptation is to trade in the opposite direction. The idea underlying these trades is that stock prices will always revert to their mean. Right? Maybe....
Pulling The Trigger Can Be Difficult
ARTICLE SYNOPSIS ...We all know markets are fluid. They are constantly moving and we can never be sure what they will do next, so it is tempting for us to constantly change our minds as well, effectively moving the goal post further and further away....
When A Step Back Is Revealing
ARTICLE SYNOPSIS ...For many intermediate-term traders, the daily charts often provide sufficient information for trades. But there are times when the additional information provided by weekly charts can be invaluable....
Manias And The Madness Of Crowds
ARTICLE SYNOPSIS ...I usually will not write about IPO's because there is simply not enough technical information available to do a halfway decent analysis. So why am I writing about LongFin Corp. (LFIN)? Because sometimes a stock acts so spectacularly that a special mention is warranted....
Finding Tops
ARTICLE SYNOPSIS ...So Federal Express (FDX) announced its third quarter earnings on Tuesday, December 18, 2018 after market close and its shares tanked. Many reasons were given for this; some said it was because the company had announced weakness in its international business, or that it reduced its earnings guidance for 2019, or that it was a result of bad political decisions around the world impacting its bottom line. The technician knows that the reasons or the why's do not matter, because everything is in the charts....
The Story Is In The Charts Not The News
ARTICLE SYNOPSIS ...Kylie Jenner, the social media maverick with over 250 million followers, looks set to become one of the youngest billionaires in U.S. history. Ulta Beauty, Inc. (ULTA) has helped in no small way to amplify her fortunes. This is because with 970 stores spread across over 48 states and the District of Columbia, ULTA has helped take the eponymous make up brand mainstream....
LAM
ARTICLE SYNOPSIS ...After the market plunge on December 4, 2018 when the DOW fell 799 points, the S&P 500 gave up 90 points, and the Nasdaq plunged 283 points, Lam Research Corp. (LRCX) was one of the 10 worst performing stocks in the Nasdaq 100....
Is Now a Good Time to Buy General Motors?
ARTICLE SYNOPSIS ...With GM's recent announcement that it would be shutting five manufacturing plants in America and eliminating almost 15,000 jobs in North America, amounting to 15% of its workforce, would now be a good time to get into the stock? Let's look at the technicals....
Grand Theft Auto's Parent
ARTICLE SYNOPSIS ...Grand Theft Auto is arguably the most successful video game franchise in history. But its parent Take Two Interactive Software, Inc., recently completed a head and shoulders topping pattern. What's next for this stock?...
What A Breakout Looks Like?
ARTICLE SYNOPSIS ...Deciding when to enter a position for a long trade can be confusing. Knowing what to look for in a healthy breakout can help....
ABBV'S Band of Resistance
ARTICLE SYNOPSIS ...AbbVie's (ABBV) stock got slammed after disappointing results on small cell lung cancer drug, Rova-T, test results. The drug was the lead product of Stemcentrix, the biotech company ABBV acquired back in 2016 for $5.8 billion. On Thursday, March 22, 2018, ABBV'S stock gapped down and lost 12.8% of its value in heavy trading. The gap down resulted in a band of resistance which is the subject of this article....
Weaponizing Facebook
ARTICLE SYNOPSIS ...Facebook is in the news because of Cambridge Analytica, the privately held data company which harvested data from millions of Facebook users to develop psychographic tools. These tools were then used by the company to target individual voters with stories that would appeal to their emotional biases. By influencing their decision making processes, or as Christopher Wylie the whistleblower and former research director said, their 'inner demons', the firm was able to sway, unknown to the individuals concerned, the way they would eventually vote. Cambridge Analytica effectively weaponize...
What Next for The Juggernaut That is Amazon?
ARTICLE SYNOPSIS ...With Amazon's (AMZN) recent purchase of Wholefoods Market, it looks like there is no stopping this juggernaut of a stock. But what does a study of the price chart reveal about the performance of this stock?...
How Low is Too Low?
ARTICLE SYNOPSIS ...Sometimes we look at a chart that is in a strong downtrend and are tempted to jump to the conclusion that the stock has fallen too far down and therefore act in anticipation of a rise....
What Next for Brinker?
ARTICLE SYNOPSIS ...After a painful decline lasting all of the past year, has Brinker Intl, Inc. (EAT) finally found support at the low of $29.50 reached on September 7, 2017?...
Playing the Waiting Game
ARTICLE SYNOPSIS ...Nowhere is it more important to cultivate patience and discipline than in trading. Entering a trade too early will often result in a stagnant trade and/or dispiriting losses which will often cause the trader to exit the trade early and miss the big break out when it eventually comes....
Reading RSI Overbought/Oversold Signals
ARTICLE SYNOPSIS ...Traders often use overbought/oversold signals generated by an indicator like the Relative Strength Indicator (RSI) to place contrarian bets. But sometimes sticking with the trend is far more profitable....
A Warning About Divergencies
ARTICLE SYNOPSIS ...Traders often use momentum indicators like the Moving Average Convergence Divergence (MACD) to spot negative and positive divergences with price. This article will discuss why divergences do not always work....
This Is What Makes Hindsight 20/20?
ARTICLE SYNOPSIS ...Sometimes we look at a chart and clearly see the trend. We wish we had only seen it earlier, when it had broken out from its basing pattern and begun its up/down trend. If only, we think, if only we had seen it when it was breaking out, we could have stayed with the trade as it rose effortlessly upwards. But is this actually the case? Even if we had been lucky and astute enough to spot the stock as it was breaking out of its basing pattern, would we have held onto the trade as it rose higher? Often not. We will explore some reasons why below....
A Quick Read of Fabrinet
ARTICLE SYNOPSIS ...The chart of Fabrinet (FN) has not been an easy read. After reaching a high of 46.50 on October 5, 2016, it began to move lower, making a series of lower highs and lower lows, but a breakout to a new high of 47.50 on February 13, 2017, causes us to reconsider this chart and ask, is now a good time to be long FN?...
Gail Dudack: The Technician's Technician
ARTICLE SYNOPSIS ...She started out on Wall Street in the days of the ticker tape and over the years became a go-to market authority and a respected technical analyst. Here, she shares her views on her career as a technician and strategist, the historical developments she's witnessed that changed the course of Wall Street, and her opinions on the changing global financial landscape...
Trading Signals and the Commodity Channel Index
ARTICLE SYNOPSIS ...Donald Lambert developed the Commodities Channel Index, which as the name implies was originally intended to be used with commodities trading. However, this indicator has been successfully applied to other markets, including stocks....
Using Dawn's Early Light To Spot Early Trend Reversals
ARTICLE SYNOPSIS ...Dawn's early light is the Sanskrit name that Tuschar Chande gave to an indicator he developed in 1995. The Aroon indicator consists of two separate lines; the Aroon-Up and the Aroon-Down. We will use the chart of Intuit, Inc. (INTU) to study how this useful indicator can help us spot trend reversals as they are beginning....
Bottom Fishing
ARTICLE SYNOPSIS ...It is tempting to look at the price of a stock and think that if it is cheap, then it is a bargain. This is a trap novice investors often fall into because it is easy to confuse price with value....
Working with the Coppock Curve
ARTICLE SYNOPSIS ...As traders, we want to find signals for fast, profitable entries and exits, but sometimes it pays to take your time to enter a trade correctly, even when doing so means being subjected to a series of whiplash trades. The eventual pay off might make it worth the pain....
Gilead Sciences and the Ulcer Index
ARTICLE SYNOPSIS ...One of the worst performing sectors this past year has been the Health Care sector, and of its sub-sectors, Biotechnology was one of the poorest performers. Gilead Sciences (GILD), a component of that sub-sector lost about 21% over the past year, making it one of the weakest performers year-to-date in its group. A quick glance at its chart shows it still in a steady down trend. But we all know that nothing lasts forever and S&P 500 companies likely will not fall to zero. So, are there any early shoots of positivity which suggest we might be wise to start giving GILD a closer look for a lon...
Will AbbVie Break to the Downside?
ARTICLE SYNOPSIS ...AbbVie, Inc. (ABBV) is a large cap growth stock in the health care sector which has been on a tear for the bulk of 2017. It recently tested and retreated from its prior high. The question now is, what does this bode for the stock?...
Be Very Afraid
ARTICLE SYNOPSIS ...Sometimes the best time to enter a long position is when others are afraid. Because we are all mostly wired alike, being very afraid might not be a bad gauge to add to your tools to help you determine when a long trade might be at its most attractive....
Beware The Hanging Man
ARTICLE SYNOPSIS ...Deere & Co (DE) had been in an uptrend for much of the past year like many other industrials. But with the recent hangman candlestick pattern formation, it is time to reassess DE's bull trend....
Watch Your Tails
ARTICLE SYNOPSIS ...Long upper candlestick tails and long lower candlestick tails should never be ignored because they are often telling you something about the likely future price behavior. Too often we look at a chart just to see if price is going up or down, but successful chart reading is about much more than that. It is about cultivating the ability to interpret what the candles are telling you about the likely future direction of price. Candlestick tails, also called shadows, will often provide a warning that is usually best heeded....
Building Self-Confidence
ARTICLE SYNOPSIS ...There are certain traits a trader needs to succeed, and self-confidence is one of them. But how do you develop it so that it benefits your trading skills? Let's find out...
Cultivating Patience
ARTICLE SYNOPSIS ...What is patience and why is it essential for success in the world of trading? Let's explore...
Xylem, Inc. (XYL)
ARTICLE SYNOPSIS ...The stock of XYL, the global water infrastructure company which was debuted on the New York Stock Exchange in 2011, has had a good few months. It reached a low of 31.54 on January 21, 2016 and has been in an uptrend since. It is currently making new all time highs. What does the chart say about the performance of this rather new addition to the S&P 500 index?...
Sometimes It's Best To Stand Aside And Wait
ARTICLE SYNOPSIS ...With Whole Foods Market (WFM) set to announce quarterly earnings on Wednesday May 4th, 2016, what does the chart say about the performance of its stock?...
With Shares Of Twitter Nearing Support Is It Time To Give It A Second Look?
ARTICLE SYNOPSIS ...Shares of Twitter (TWTR) closed on May 2, 2016 near support after several days of heavy selling. Is it now time to give the shares a second look for a possible long play?...
Richard Demille Wyckoff Part 2
ARTICLE SYNOPSIS ...There are no shortcuts to becoming a successful trader. In this second of a five-part series about Richard D. Wyckoff, we look at how persistence and determination played a role in his trading career...
The Disposition Effect
ARTICLE SYNOPSIS ...The psychology behind our tendency to sell winners and keep losers....
Is AutoZone Still a Strong Long Play?
ARTICLE SYNOPSIS ...Will a break of resistance negate AutoZone's long term trend line break?...
What Does Regeneration's Bear Flag Mean?
ARTICLE SYNOPSIS ...A bear flag is often a bearish signal. Regeneration Pharmeceuticals, Inc. is just completing one - is it too early to tell what this means for the stock?...
Failed Divergence
ARTICLE SYNOPSIS ...Negatives divergences can be useful signals to alert us to possible reversals, but it is wise to remember that confirmation to enter trades must always come from price because no signal is fool proof. All trading signals can fail....
Ben's Fake-out Or Why You Must Trust the Chart
ARTICLE SYNOPSIS ...Sometimes when you look at a chart, you see what has happened recently and this informs your decision about what should happen next. This decision then determines how you subsequently trade and can result in costly mistakes, especially in the case of the fake-out. For what should happen next must never be a basis for your trading decisions. The only analysis that really matters is the one that tells you what is currently happening....
The Bird That Shrunk After Swallowing Its Rival
ARTICLE SYNOPSIS ...May 18th, 2016 makes it a year since Ascena (ASNA) announced its acquisition of ANN stores for a mixture of cash; financed by debt and stock. The deal created one of the largest specialty retailers in North America with a total of over 4,900 stores. In the year since the deal closed ASNA shareholders have not seen any upside value....
A Quick Look at CF Industries Holdings, Inc.
ARTICLE SYNOPSIS ...A look at CF's chart will show that it topped on June 17, 2015, reaching a high of 68.10 in a buying climax marked by unusually high volume. This marked the start of its sustained and protracted downtrend. By January 20, 2016, with the stock trading at 25.57, it was down 63% from its high....
Richard Demille Wyckoff Part 3
ARTICLE SYNOPSIS ...The most basic and universal laws governing goods and services in a free market are the law of supply, law of demand, and the intersection of these laws. These laws control stock prices. In this third of a five-part series about Richard D. Wyckoff, we look at how he analyzed market action...
Anticipating Macro Events
ARTICLE SYNOPSIS ...As part of its 13F filings the quarter ending 3/31/2016, Barrick Gold Corp. (ABX) announced that Soros Fund Management LLC had built up a new and substantial position of some 19,419,309 shares in its company. With the results of the UK referendum currently roiling world markets, this move by the billionaire investor seems almost as stunning as his trade in 1992 in which it was claimed he made a billion dollars by "breaking" the Bank of England. On Friday, June 24, 2016, while the S&P 500 was down 75.91, or 3.59%, ABX was up 1.12, or 5.79%....
Richard Demille Wyckoff Part 4
ARTICLE SYNOPSIS ...Whether you're an investor or trader, you need to know how to intelligently evaluate price action. In this fourth of a five-part series about Richard D. Wyckoff, we look at how he evaluated price action using charts...
Failing Successfully
ARTICLE SYNOPSIS ...We're groomed to think of losses as a sign of failure, which is why trading is difficult. But experiencing losses is part of a trader's life and is something you have to accept. Here's how to approach the idea in a healthy way...
Richard Demille Wyckoff Part 5
ARTICLE SYNOPSIS ...In this final part of our series about Richard D. Wyckoff, we look at his latter years - the changes he faced and how that affected his thoughts on investing...
The Endowment Effect
ARTICLE SYNOPSIS ...The endowment effect is a bias which accounts for why traders and investors will sometimes allow themselves to get married to a position....
Richard Demille Wyckoff Part 1
ARTICLE SYNOPSIS ...This article is the first of a five-part series about Richard D. Wyckoff and his contributions to the discipline that is technical analysis...
Protecting Profits With Strangles
ARTICLE SYNOPSIS ...Options are often thought of as being risky and they often are, especially when you do not have a clear understanding of how they work. There are times, however, when a thorough understanding of an option strategy can help to minimize downside risk while allowing you to participate in potential upside gains....
Gambling, Speculating, & Investing
ARTICLE SYNOPSIS ...What do these terms mean as applied to the participant in the financial markets? Let's have a look to try to come up with some clear definitions....
Decision Fatigue
ARTICLE SYNOPSIS ...Yesterday, you made a really bad trade. After you have closed out the position at a loss, you study the chart and ask yourself why you entered the trade in the first place. The more you study the chart, the more confounded you become. Clear as the light of day is evidence that the stock is acting badly. You see price had been making lower lows and lower highs for some time, there was no break of the down trend line to the upside. So you ask yourself why did you take a long trade? All the signals were screaming that this would be a bad long trade. Yet you took it. You can't understand why ...
Anatomy Of A Breakdown (Part 1)
ARTICLE SYNOPSIS ...To successfully identify a break down as it begins to happen, it is essential to learn to look for signs of technical weakness on the chart....
The Availability Heuristic
ARTICLE SYNOPSIS ...When we want to judge the likelihood of something occurring, it is often the case that we will attempt to recall instances of its occurrence from memory. If retrieval is easy and many instances can be readily retrieved then we are more likely to judge the thing as likely to occur. This is the availability heuristic....
Representativeness Heuristic
ARTICLE SYNOPSIS ...Representativeness heuristic is one of the many mental shortcuts that we often use to distill information and arrive at answers when faced with conditions of uncertainty. We judge something as more likely to happen because it is representative of its class. But that something is representative of a particular class, does not make it more likely to happen....
Bollinger Bands And Volatility Signals
ARTICLE SYNOPSIS ...Traders use bands around price to help them determine when the price has strayed too far away from their average, either up or down. The construction of trading bands is relatively simple. Bands are placed above and below an average often using a fixed percentage. These bands can also be called envelopes. Bollinger Bands are one of the more popular types of trading bands....
Using Protective Stops To Help With Entries
ARTICLE SYNOPSIS ...Sometimes people will say that the reason that they will no longer use protective sell stops is because when they have used them in the past, their stops will invariably get touched, taking them out of the trade, just before the stock reverses. It is likely that this happens, not because the market somehow knows the price at which you set your stop and then deliberately aims to take you out of the trade, but the more likely reason, is that your stop might not have been set correctly in the first place....
When Setups Fail
ARTICLE SYNOPSIS ...So you have done everything right. You have followed your rules, waited for the signal, entered the trade on confirmation of that signal and what happens? The setup fails. What do you do?...
Fear of Regret
ARTICLE SYNOPSIS ...The fear of regret is a cognitive bias that involves both judgment and emotion. We feel pain for having made a decision that results in a loss. Sometimes, the anticipation of that pain is so strong that it causes us to act in ways which might otherwise seem irrational....
Anatomy Of A Breakdown (Part 2)
ARTICLE SYNOPSIS ...There are many tools that the technician can use to help identify technical weakness on a price chart. Indicators used correctly can provide invaluable information....
Sunk Cost Fallacy
ARTICLE SYNOPSIS ...The sunk cost fallacy is a behavior that is potentially harmful to your investment success. Is there any way to overcome it?...
Loss Aversion
ARTICLE SYNOPSIS ...By nature, we are wired to act in certain ways when confronted with specific situations. Being aware of these types of behavioral patterns is a first step toward conquering them. Here's a look at how we typically react to situations that arise in the financial markets....
How Anchoring Can Hold Us Back
ARTICLE SYNOPSIS ...What is anchoring and why do traders need to understand it?...
Trading The Moving Average Convergence Divergence
ARTICLE SYNOPSIS ...The moving average convergence divergence (MACD) is a popular indicator found on just about all software trading packages. Even though it is widely used, sometimes it is useful to return to basics, to ensure that we master the core principles to effectively use this popular technical tool in our trading....
Recognizing And Avoiding Confirmatory Bias
ARTICLE SYNOPSIS ...Cognitive biases are thinking errors that affect how we process information and make decisions. We are all affected by cognitive biases in our everyday decision making but what makes them so insidious is that often we are not aware that we are acting under the influence of a cognitive bias when we form opinions or make decisions. When it comes to trading, our results rely on our ability to recognize and limit the influence that these errors of judgment can cause. Here you will find a discussion of a cognitive bias known as confirmation bias and be presented with tools to recognize it and avoid...
The Fear Index Or The VIX
ARTICLE SYNOPSIS ...The VIX is a volatility index registered by the Chicago Board Options Exchange (CBOE) which has come to be known in the popular press as the fear index or the fear gauge....
Trading With The ADX
ARTICLE SYNOPSIS ...Markets do not always trend. Sometimes they are range bound and as a result the tools which will be most suitable for analysis in these types of market differ from those that are useful in a trending market. A popular tool that is helpful in determining whether we are in a trending or range bound market is the average directional movement index (ADX)....
Information Bias, Or Why More Is Not Necessarily Better
ARTICLE SYNOPSIS ...Information bias is a cognitive bias which leads us to believe that more information is better or complexity is preferable to simplicity. Sometimes we collect information which is ultimately irrelevant to the decision we are trying to make but we feel more confident in making the decision because of the extra, irrelevant information....
Overcoming Overconfidence Bias
ARTICLE SYNOPSIS ...Overconfidence is a cognitive bias which results in our overestimating our abilities to perform a skill or task. In so doing, we see ourselves as better than average and we rate our abilities higher than others would rate us. In financial markets, this bias most often manifests itself in traders as aggressive trading or as an increase in trading volume. It is important, therefore, that we recognize this bias and find ways to effectively minimize its effects on our trading....
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