Archive for November, 2009
Author: admin
This year has been a very exiting time for traders and investors. We have seen a steady climb in prices with controlled pullbacks in the broad market and gold.
Using technical analysis we are able to quickly and accurately make informed decisions just from looking at the charts. In the charts below you will see how simple chart patterns along with support & resistance levels can provide excellent low risk entry points. Also you will see how candle stick charts can be an early indicator for prices to reverse direction.
DIA ETF – Daily
The DIA (Dow Jones Index Fund) is trending higher. By applying some basic technical analysis you are able to time your entry points having the odds in your favor.
In this chart I use two simple forms of analysis. The broadening formation (red trend lines), and horizontal support zones shown in blue.
Broadening Formations: This is when the price becomes more volatile making higher highs and lower lows. I think of it as one of those Megaphones for talking to large groups of people. So when a chart has this pattern it’s virtually yelling at me and I start taking profits or tightening my stops.
Horizontal Support Zones: I like to focus on support or resistance zones which are a little different than most traders. I do not use the top and bottoms of previous waves for these levels. Instead I take the average price then expect the support level to be penetrated somewhat as the level is tested. This is how the market keeps you out of the good trades. I cover this in great detail in my Stock Market Trading Education Course available in January.
Analysis: The DIA ETF looks ready for a pullback to the $99- 100 level.
GLD Exchange Traded Fund – Weekly
Gold has been on fire and riding this wave up has been very profitable thus far. Last week a doji candle was formed on the chart and this can signal a change in short term price action.
This chart shows some of the past doji candles and what happened to the price of gold soon after. What this candle is telling us is that the buying and selling pressure is equal. So we know momentum is slowing and we should expect a consolidation or correction.
Because gold has rocketed higher, indeed going almost straight up in the recent weeks, I expect a pullback to be very quick. A drop to the $110 or even the $100 level in the coming weeks is not out of the question, but we all know commodities can go parabolic for several months (straight up). This is why we continue to tighten our stops and keep holding out long positions.
US Dollar – Weekly
The US dollar has been up and down like a yo-yo in the past 15 months. The chart below clearly shows what has been happening with this currency and what I think we could see very soon.
The blue support zone (73-74) is a key pivot point for the dollar. That being said lets take a look at the chart.
During the time when the price is trending higher July 2008 – Feb 2009 we see lower wicks appear more often. This tells me that sellers pushed the price down early in the week but were then overcome by buyers nearer the end of the week. This is bullish price action. Also the broadening patterns during this timeframe’s tops indicate increased volatility and we know that is a sign of weakness.
From March 2009 – Sept 2009 the trend was down and there are longer upper wicks telling us buyers became over powered by sellers each time the price rallied.
In the recent 3 months we observe lower wicks meaning buyers are moving into the US dollar again. Knowing that there is major support below the current price I have to think the dollar could start to bottom around this level.
Trading Conclusion:
The broad market is becoming unstable and looks like it could have more of a pullback this week. I would not be adding to any long positions until we see the market trading near support. Three out of four stocks move with the market so it is crucial to understand the overall market direction when buying and selling stocks and commodities.
Gold is trading at a level which is fuzzy. The weekly chart is neutral and the daily chart is still on fire as it moves up. All we can do is ride our positions and keep raising our stop prices.
The US dollar could start to bottom over the next few weeks. Depending what happens with Dubai this week we could be in for a big bounce in the dollar as investors flock to safety as the US dollar is still the currency of choice if/when other countries start to have a financial melt down again.
If you would like to receive my free weekly ETF Trading Newsletter.
Chris Vermeulen
Disclaimer: I do not own DIA fund
Chris Vermeulen is Founder of the popular trading site http://www.thegoldandoilguy.com. There he shares his highly successful, low-risk trading method. Since 2001 Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets. Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return. Reach Chris at: Chris[at]theGoildAndOilGuy[dot]com Article Source:http://www.articlesbase.com/day-trading-articles/the-dow-dollar-gold-what-goes-down-must-come-up-1520042.html
Author: admin
Investing in penny stocks can be risky and you should be educated before making your first trade. There is a lot of money to be made with cheap stocks because you have more buying power. You can also lose money quicker because these stocks or more volatile.
How to: Trade Penny Stocks
First you need to educate yourself on buying and selling penny stocks. Most people learn that timing is everything to make money in the stock market and this could not be more true when it comes to cheap stocks. Do your homework and you can be successful making money in this arena.
You Can: Get Rich Trading
Find all the publication you can that will give you information you need to make smart buying and selling decisions. To be successful at making money in the stock market you need to understand the trends of the market and the best way to do this is to be informed.
Talk with an active penny stock trader and pick there brain so that you can understand the ins and outs. You should always try to walk in someones shoes to get an insight on what to expect. You do not have experience on your side yet so you need to get some know how form somewhere and what better than an experienced trader.
Remember that making money in penny stocks is a learning process. You need to start out slow until you fully understand how the market works. Making money will eventually com second nature to you. The opportunities to make money are there in a good market and a bad one. Knowing the trends and what to look for is the key to being successful.
Bryan Burbank is an expert in the field of Finance and Stocks. Article Source:http://www.articlesbase.com/day-trading-articles/day-trader-how-to-make-money-buying-and-selling-penny-stocks-1516579.html
