"Market Chemistry @ Work"

Mixture of Financial Factors make Market Price Action a Day to Day Proposition.

US Dollar Pulls Back from Short Term Rally.  There is no Defined Trend in the Dixie which helps to confound expectations for what is next.

When there is Doubt as to Direction, it pays to look at he Longer Term Charts.  The SPY (S&P 500) remains in an Up Trending Channel.  When there are short term doubts as to direction, the 6 Month Daily can provide a more solid foundation as to what to expect.  In this case it is Bullish.

Mathematical Odds Favor the Upside

The "Bell Curve" can work in the Market as Well as Elsewhere when it comes to the Laws of Probability.  (Click on the Graphics to Enlarge View)

SPY 6 Month, Daily - 3.26.10 - The limits of the "Regression Channel" seen above represents "One Standard Deviation" from the price range since the middle of Feb.  The Channel is Trending Up.  There is a 68.2% chance that the market will trade between the upper and lower limits of this channel.  This is not a guarantee, but those are the mathematical odds at the moment.  In general longer range charts are more reliable as to Trend as compared to shorter range charts and patterns.  The Solid Lines are Pivot Points with the upper and lower bars being Resistance and Support for the Week.  This week the Pivots suggest a Higher Market is in store using mathematical equations within a Technical Analysis framework.

Bernanke "Shorts" the Market with Prophecy of Protracted Problems

The Chairman Spoke and the Market Tanked

We should get a Bounce on Friday.

True to Form

Ya Gotta Watch the "Sleeping Tiger."

APKT just took a little nap and then broke again to the upside at Support.

Back to the Acme Packet Study

Let's Look at the Fundamentals Here!

Technical Analysis revolves around Support and Resistance.  There are other factors but those are essential in technical analysis.  Acme Packet (APKT) just happens to be our study at hand.  The stock broke out above Resistance and appeared to be heading upward.  It his a Resistance level and has backed off.  The Old Resistance is considered the New Support.  As the price recedes toward the New Support/Old Resistance we are looking at a Bounce back to the upside.  This could be a Buy Opportunity if the general market internals are Bullish.  The Price Pattern suggests profit taking by those who bought at a lower level.  Institutional holders of the stock could be selling into the strong upswing in the price action.  Compared to recent Parabolic advances in the stock, the action at the moment is Digestive and Consolidating.  A new breakout to the upside is very likely once this "Pause that Refreshes" is over.

Health Care Passes!

We Will See!

Which Way?

Cross Currents Make the Market Exciting!

Acme Packet - APKT - Situation Repeats with Support and Resistance in this Volatile Parabolic Issue.  This is a continuing study of an Interesting stock movement.  It is not a recommendation to buy or sell.  This is presented for educational purposes only.

Breakouts are Exciting and can be Opportunities

Breakouts are a Classic Opportunity to Make Money!

Acme Packet - Parabolic Pattern with a Pause for Refreshment.  Situation begs for Resolution.

A Lower High suggests a Roll Over.  Resistance Line drawn across the Highs and a Support Line drawn under the Lows.  These are out Lines in the Sand.  A Break above is Bullish and a Break below is Bearish.  Let's keep it simple.  The facts of the market are staring us in the face.

Bounce off of Support is interesting but not Decisive.  Up or Down?  Who knows?

Price back up to Resistance.  Breakout above Resistance Bullish and would expect another Leg Up in the Price Action.

Classic Breakout above Resistance with continued move to the Upside.  Price Action is in the Clear and there is no overhead Resistance.

This is a Study in taking advantage of Technical Analysis to help making Trade Decisions.  Direction is so important and the Breakout is Decisive in Revealing the Market's intention.

Dollar Down > Market Up!

US Dollar Rolling over after Short Rally

Rally in the Dollar Fizzles at least for the moment.  There is an inverse relationship of the Dollar to the Stock Market.  When the Dollar goes down, the market goes up and vice versa.  (Click on the Charts for Larger View)

SPY 10 Day, Hourly - 3.16.10 - Trend continues up.  Daily Pivots continue to Rise with the Tide.  Hourly Candles are mostly Green as is the CCI.

Undecided Market

The Volatility continues to Build.  Today was not a Fizzle.  It was a Continued "Winding of the Sprmg."  (Click on the Graph to Enlarge)

SPY is back at Resistance.  The "Tug o' War" continues.  There is a lot of energy building on both sides.  The Drama is About to Begin!

The Sleeping Tiger Waits in the Wing!

The Sleeping Tiger may be the Play!  Watch the Price Action and the MACD!

SPY 2 Day Chart - Very narrow range on Friday.  This is winding up the Spring short term.  We could have same explosive up or down action on Monday.  A sideways action such as this is a temporary "truce" between bulls and bears.  It usually resolves with one side advancing and the other retreating.

The Memphis "Pippin" Exemplifies Volatility

We can go into a lot of definitions and technical jargon to explain "volatility."  The fact is that anyone who has traded in the market has either been the beneficiary or victim of "volatility."  Trading and taking positions in periods of high volatility can extract a cost that oftentimes is unexpected.  When prices are on the move, the market makers increase the spread between the bid and ask price.  On the other hand when there are periods of low volatility these spreads may only be a penny (vs. 5-10 cents).   Therefore, periods of low volatility can be opportunities to take positions that will be "goosed" by the increased volatility.  The Bollinger Bands demonstrate volatility by showing the "second" level of standard deviation from the norm.  The Bollinger Bands capture 95% if the price action, and should the price go beyond that, it is more than likely that a new direction has been established.  

Click on the Following Charts to Enlarge the View

SPY 3.8.10 - One Day, 15 min. - There was an expansion of volatility yesterday as the market moved up.  Today was a "Sideways" day, and you can see that the Bollinger Bands contracted.  In fact, even though I had a position from yesterday which went up, the value went down due to volatility.  The present contraction of the Bollinger Bands is actually an opportunity the benefit from an eventual expansion of volatility.  All contractions are followed by expansion and all expansions are followed by contractions.  It is the job and art of the trader to anticipate these moments of changes in volatility as well as market direction.

Click on Chart to Enlarge

SPY 5 Day, 15 min. - This 5 Day chart demonstrates the gap up on Friday and the Bollinger Band expansion.  During this period of time the "spreads" between bid and ask on any issue broadened.  It is often felt that a contraction of volatility and subsequent narrow Bollinger Bands is "boring."  To the contrary, this may be a great opportunity to take a position (up or down) and when it occurs (if you are right on direction), you will benefit by expansion of volatility.

There is a Strategy called "Sleeping Tiger" explained by Toni Turner that shows how to take advantage of this situation.  It is one of her favorite trades.  You can find that is the Sidebar on the Blog.

Volatility Opportunities

The Market and the Kangaroo have Similar Patterns of Volatility

Bollinger Bands have periods of Expansion and Contraction.  One will follow the other.  There is no alternative.  Traders can take advantage of this probability.

Play Action - Take a Position and Make the Play!

All plays do not work, but no play never works!

200 Day MA Up!  20 Day MA Up! 2 Days of Consolidation.  The Play should be Up!  It may not work, but the Edge is to the Upside.

Crashing the Party?

There Comes a Time and I'm Ready to Fight!

Head and Shoulders suggests possible move to the downside.

Cross Currents Create Uncertainty!

What started as a Bullish Day ended with a Whimper.  What's Next?

Market Behavior and Direction Currently Attached to the US Dollar

S&P Futures (/ES) in Bullish Trend - Are we back a Support?  Will it Hold?

SPY 6 Month, Daily shows pullback with Bounce back to Upside.  Today was Bullish but ended with a Whimper.  Is this just a lower high or a pause on the way up?  The Market is the final arbiter.  We will see!