Bernanke at White House now!
Bernanke at White House now!
New deflation issues in USA
I think the best way to play against the high frequency trading that goes on so much these days is to find the trading range ofyour favorite stocks, then set low bids in that range for buying…andas soon as you own one, set a high ask price within the range “Good Til Cancelled “(GTC)…and of course, dothe opposite for shorts.
It’s very difficult to play their game, sothe best thing to do is define your comfort zone and set your parameters toride the volatility that they create.
In fact, Ihave done some of that type of trading in the last couple months…I define my rules, and let them play into my game…rather than get bounced aroundby THEM!
So, let’s review: Allow the Robotic high-frequency traders to define their patterns, then trade within those parameters. Ihave been doing a lot more trading while absent from the computer….bythat, I mean that as soon as I take on a position, I set a limit orderat what I think is a good exit price…Being an expert chartist helps me to define good exit targets.
Many of those trades havebeen executing for me lately…I step away and do my work, hold meetings, online seminars, go tolunch…do my own thing…and at the end of the day or week, I comeback, open my emails, and find that trades have executed. So, in a way,I’m doing my own programmed trading…letting them bring the price tome!
This way, the Robots can gyrate the trades all they want with that fastfrequency–I don’t see it and it doesn’t bother me…and I make theprofit that I anticipated.
Of course, not all my trades workso beautifully…some go awry…and then I have push the panic buttonand move to Plan B or C! Also, this type of “absentee trading” does not work so well in a TRENDING market…but so far, year 2010 has been anything but a trending market!
As I remarked yesterday, it seems the RoBOT traders are trading off the 50 day EMA
line…I usually don’t use the EMA for 50 days (I favor the SMA)…but
notice how the Dow & S&P can’t seem to get past the 50 dEMA line!
If the BOTs
would let it trade up to the 50 SMA, there would be another 250 pts of
gain ahead on the Dow….let’s see what happens next. If this proves to be the
high point of the rally, at least we will know one of the secrets of
the algorithms these quant kids are programming with!!!
It’s been fascinating for me to watch the underlying market action
today on the TRIN and TICK charts…TRIN has spent most of the day
above 1.2 (oversold) meaning that there is more selling than buying
action going on…
YET, the TICK shows mostly upside action,
including spurts of being overbought! I would have expected more
downside on the TICK today following yesterday’s very bullish action on
both charts. TRIN is cooperating with that assumption…but not TICK.
tells me that the shorts are covering and/or the MMs and net long hedge
funds are jumping in ahead of the lower bids to grap up stock and thus
supporting the market here. They are breaking the backs of the Bears,
So, with today’s rather bearish TRIN, we actually have a
market that is slightly positive at this moment (about 1 hour before
I would have expected more downside on the
TICK…it seems that at least some big players are betting that there
will not be much downside as the quadruple witch approaches this
I might still lighten up and take some profits this last hour with a rising market, but I don’t think I will short into it.
For those looking for a good technical case for being somewhat bullish, we have a pSAR trip that is in weak-side mode…in most cases, though not all, a weak-side pSAR is only a
valid signal for about 2 to 4 sessions…the pSAR tripped yesterday on the Dow and S&P 500,
meaning the run higher may only last until about tomorrow or late as
To become a dominant side pSAR, it needs to stay in bullish
position (i.e., without another trip) for at least 9 to 10 sessions in
a row…or until the number of pSAR dots in this run exceed the number
of dots in the previous run in bearish mode. Once in dominant position,
pSAR works in conjunction with MACD to show a TREND.
in mind that in weak mode, the last pSAR dot becomes the target once
the stock or index reverses…today, the last pSAR dot rests at under
9800…so IF this rally stalls tomorrow or the next day…or as late as
Friday (quadruple witch), then the downside target becomes something
near Dow 9800 for the swing trade. Ace
No, the Bullish Percentage Index for the NYSE (BPNYA) does not yet have a pSAR flip as someone asked me today…but the markets are up withDow up about +88 this morning…until the 10 am report on homebuilders…now market has pulled back to +80.
Still, it looks likethe Bear Trap I tried to warn the Bears about yesterdayafternoon….but this home builder report might have saved their skinsa little…we shall see….
(Ed. note: The Dow finished up +213 points…the Nasdaq finished up over +2.5%….as usual, Ace made the correct call not to go short in the previous day’s late afternoon session!)
I don’t know if people can see it, but on the Bullish Percent Index of the NYSE, (BPNYA), the RSI closed above the 30 line today( final reading at 32.53)!
pSAR confirmation (at 45 on the index) would affirm that the stock
market is in a strong bounce-back this week. Though there was a strong pullback in the afternoon session, I believe it to be a Bear Trap. Let’s watch and see what
Someone asked me about Akamai Technologies (AKAM)…I saw it had a strong move today, and I was wincing a little because it’s now at a higher price than where I took profits on it! Yet, I think this move is going to be short-lived…I can see that more clearly in the Weekly chart on AKAM…it is quite overbought, though there is little to hint that it is about to turn back…but the ADX is at a multi-year high of almost 70! The ADX rarely ever gets beyond 70, so I think the RoBots will see that in their algorithms and begin to sell…also, look at the RSI in overbought situation for weeks!
Again, there’s not much to say sell at the moment in terms of triggers…indeed, the StochRSI says “buy” for this week…so it’s a short term buy…but somewhere around $44 or $45, I think will turn back and fall into the Fib congestion again (the perma-Bears would say it will keep falling!…but I don’t quite see that yet…lol!)…but I expect it to form a base in the Fib channel from somewhere between $28 and $40 over the summer…
Like I say, I rode it on up from around $24 to $38 where a stop loss threw me out…I have had a bid in at $32 to buy it back, but so far, no luck…but the Weekly is telling me to be patient, and it may well come back to me! Regards, Ace