Wednesday, August 20, 2008
RedDirts BricTrade Update
The candlestick pattern your looking at is what is known as an abandoned baby. If you click on the chart for the China ETF, symbol=FXI you will see this pattern has developed over the past three days. The pattern is confirmed by looking at the Historic Price Quotes at stockcharts.com.........I just had to make sure the shadows of the doji were totally isolated from the Monday lows and the Wednesday lows. So there it is, an abandoned baby reversal pattern. I wish my BRAIN could recall the success rate of this candle pattern. I recently read an article in S&C Magazine that gave the stats on success rates of several candle reversal patterns. Of course I can't locate the article when I need it. But, here is what I'll do. I'll buy an opening position of say 100 shares in the FXI and set a Stop-Loss Order just below the low of that abandoned baby doji. I would like to get filled somewhere below the close on Wednesday and somewhere above the top of the abandoned baby doji. So it looks as though I'll have to place a limit order to try and get filled in that space. This trade is supported by what I'm seeing in all the BRIC trade charts including the Hong Kong Option Index. ($HKO) India actually appears to be a buy at this time also. Brazil and Russia seem to have made some kind of bottom. I think within' this past week or so, there have been some agreements made among the BRIC countries and the USA. Looks as though the best trade could be long China and USA to the detriment of Brazil, Russia and India. But, as I see it, invest in growth in the US and China and look to find some sort REIT investment in Brazil. Look for an infrastructure investment in Russia to go with this trade. I think the best India trade may have something to do with technology (SAY) or I'll just buy a small portion of INP.
Labels: BRIC ETF's, candlestick charts, growth stocks, major indices, RedDirts BRIC Trade, technical analysis
Wednesday, July 9, 2008
RedDirt's BricTrade Update
Jim Rogers stated about 1 year ago that," the Chinese market is going to correct and I hope I have the whereabouts to BUY." I saw this interview one Saturday morning on Fox Network. Well Jim, are you BUYING? The ol' RedDirt is really starting to see some evidence that this may be the time to take a serious look at the FXI(China) ETF. My BricCharts are really starting to flash some signals at me. First let's take a look at how I determine which of the BricCountry ETF's may out perform the major BricETF EEB. It's really simple. What I do is ratio each individual BricCountry ETF to the EEB as one of my indicators at the bottom of each chart for EWZ , RSX , INP and FXI. Then I look at how that ratio has performed when compared to it's 29 day simple moving average & is the ratio moving up or down. Starting to get the picture?
Now for step #2. The Hong Kong Options Index CHART was just me stumbling across something that I felt would help out when trying to determine market turns. So far it's been working. It's not much different than using the $CPEC(call/put ratio) for an indicator on the $SPX. In fact, it's been working well enough to make it my #1 chart when trying to determine positive or negative divergences.
Last but not least, step #3. When I feel really uncomfortable about going long, I look at that individual chart and determine do I place a market order, place a buy stop just above some nearby resistance or just enter a limit order to try to get filled at some sort of nearby support level. Experience tells me the best order to place is when nearby resistance is violated. I usually get filled about 7 cents above that level. Usually that price is just above the nearest Buy Fractal or the Gator moving averages. ((Visit http://profitunity.com/ for an explanation of Fractals and Gator ma's.)) It could also be just above a bullish reversal candle stick such as a Hammer or Bullish Engulfing pattern.
Here's a little update on the S&P500. As of the market close July 9th, 2008 we are just 1.6% above the 2006 lows which I feel is a very important support level. We are only 5.6% above the really big support level of 1176 neckline of the reverse Head & Shoulder pattern from the last great Bear Market. If you look at the Monthly Chart and the Weekly Chart you will clearly see the support levels I'm talking about.
There will be no RedDirt's Weekly Update this coming Sunday. Sorry to say, I'm turning 47 on Saturday so I'll be recovering from 18 holes of golf and possibly a hangover. Not to mention I'm also scheduled to work Sunday.
Thanks for stopping by and good luck with all your trades!
Now for step #2. The Hong Kong Options Index CHART was just me stumbling across something that I felt would help out when trying to determine market turns. So far it's been working. It's not much different than using the $CPEC(call/put ratio) for an indicator on the $SPX. In fact, it's been working well enough to make it my #1 chart when trying to determine positive or negative divergences.
Last but not least, step #3. When I feel really uncomfortable about going long, I look at that individual chart and determine do I place a market order, place a buy stop just above some nearby resistance or just enter a limit order to try to get filled at some sort of nearby support level. Experience tells me the best order to place is when nearby resistance is violated. I usually get filled about 7 cents above that level. Usually that price is just above the nearest Buy Fractal or the Gator moving averages. ((Visit http://profitunity.com/ for an explanation of Fractals and Gator ma's.)) It could also be just above a bullish reversal candle stick such as a Hammer or Bullish Engulfing pattern.
Here's a little update on the S&P500. As of the market close July 9th, 2008 we are just 1.6% above the 2006 lows which I feel is a very important support level. We are only 5.6% above the really big support level of 1176 neckline of the reverse Head & Shoulder pattern from the last great Bear Market. If you look at the Monthly Chart and the Weekly Chart you will clearly see the support levels I'm talking about.
There will be no RedDirt's Weekly Update this coming Sunday. Sorry to say, I'm turning 47 on Saturday so I'll be recovering from 18 holes of golf and possibly a hangover. Not to mention I'm also scheduled to work Sunday.
Thanks for stopping by and good luck with all your trades!
Labels: bearish engulfing, BRIC ETF's, candlestick charts, RedDirts BRIC Trade, sp500, technical analysis, weekly update
Friday, June 20, 2008
BricTrade Update!
Click on the image to the left and read the note about the Stochastic indicator or click HERE to open the Hong Kong Option Index Chart in a new window. If you have been following along with my BricTrade, you know how closely the EEB tracks the $HKO:$USD ratio chart. The reason for this post is that all the individual BRIC country ETF's are signalling stochastic buys but my favorite indicator for the EEB is saying,"hold your horses." I know this train is going to leave the station one day and I'd rather catch the caboose than get ran over by the engine. After back testing my chart indicators this is the 1st time since the EEB has been trading that the %D on the $HKO has dropped below 20. It is only the 6th time in 5 years that this has occurred for the Hong Kong options index. For the investor it's probably a good buying opportunity, for the trader, why get ran over by the engine if you can catch the caboose.Labels: BRIC ETF's, candlestick charts, RedDirts BRIC Trade, technical analysis
Saturday, June 14, 2008
RedDirt's Weekly Update
I'm starting out this weekly update by discussing my GarpScan and the stocks that show up on that scan. The first thing I want to look at is a stock that showed up on every scan in January and my only scan in February. Then I ran a scan the day after this stock broke out to the upside and it disappeared from my scan. Here is the Yahoo Profile for the stock I'm talking about. I was really surprised to see IXYS Corp. show up on my most recent scan from June 8th after nearly doubling from the March lows. IXYS actually falls into two catagories of trades I monitor. My Garp trades and my Green trades. It makes me wonder, is this the next Microsoft or Walmart? I've added the direct link to the GarpScan Results to the top of my sidebar on this blog. What's really impressive is IXYS not only showed up on my most recent scan, but it ranks #3 on the list in Price/Sales and only a 15% debt Ratio. That's a good sign. With a PE of 17 versus the industry average of nearly 21 it leads me to believe this stock has some room to run. PSYS has formed a cup&handle chart pattern. AXTI has built a 3 month long base and looks to be getting ready to break out to one side or the other. A couple of other long time Garp stocks BUCY & CAM continue their uptrend's even with all the talk that the oil market is about to correct big time. The consumer discretionary stocks on the list like GES, DECK and BJRI are probably wait and see candidates.Now for the BRIC Trade. India led the way this past week with gain of 2.25%. If you combine all 5 daily candles for the week it would look like a hammer has formed on a weekly basis. This past weeks low of $57.85 for the INP could be a bottom for now. Russia finished in 2nd place for the week with a slight loss, down 0.2%. China got a little bounce Thursday but finished the week with a loss down 2.28%. Brazil was this weeks big laggard dropping another 4.2% on the week. Every chart on the BricTrade Page shows the stochastic in over sold territory. India looks like it will be the 1st ETF to provide a buy signal.
This past Friday I took a position in the SSO because of the action that took place on the 60 minute chart when we got a couple of nice bounces from the gap area the hourly chart. The 60 minute chart managed to close above the trading band. A break above the last candle on Friday I may add to the trade. A break above last weeks high I will for sure add to the trade because of the bullish looking doji on the weekly chart. I was seeing buy signals on the 1 minute chart. that reinforced my decision. I didn't load the truck. Just took a 40% allocation to the trade off of 2 positive time frames. The Daily , Weekly and Monthly have some more work to do to turn me positive in those time frames. I've also started building a position in GE. Over 4% dividend and seems to me they're in a sweet spot with the dollar and foreign sales , the wind power & solar, infrastructure(water and other utilities) and transportation(planes, trains and automobiles). I've traded GE twice in the past year and made $ on both trades. This time I'm thinking about pulling in some big bucks..Let's hope it works out! I'll also be keeping a close eye on the QLD as the $NDX:$SPX ratio chart has continued to impress with the tech stocks out performance of the 500 for awhile now. I'll use the QLD as a proxy to the SSO to help me beat the S&P500 return.
Don't forget to follow along with decisionmoose.com to see what Bill Dirlam's program is telling him to do. You can click HERE to watch the charts and any switches that are made.
And now for some of that 4 letter stuff. (WORK) Here are a couple of links to study that could help you become a better informed analyst. I use this indicator to not only help me determine when something is over bought or oversold but it also helps when detecting bullish or bearish divergence. Link#1 & Link#2
Labels: bearish engulfing, BRIC ETF's, candlestick charts, decisionmoose, garp stocks, green trade, RedDirts BRIC Trade, sp500, stock scans, stockcharts, weekly update
Sunday, June 8, 2008
RedDirt's Weekly Update
My vacation is about to end so it's time I get back to work. This weekly update will start with a look at the BricTrade. Since my last post I was stopped out of the EEB trade. My favorite indicator for the BricTrade, The HongKong Option Index , is once again in oversold territory according to the stochastic. The past two weeks haven't been kind to the individual BRIC country ETF's as India has led the decline with a drop of 7.42%, China fell 5.36%, Brazil dropped 2.72% while the strength of the group was Russia posting a 1.89% loss. Bloomberg reported that Citigroup strategist Geoffrey Dennis is predicting a 10% drop for the Brazilian market. Brazil and Russia have recently outperformed the EEB whereas China and India have underperformed. This may all be about to change. India is trading at about a 50% discount to where it was in early 2008. I'll be looking for some sort of reversal candle now that the INP is trading near a level of support on the chart. Wouldn't it be great to see a Hammer candlestick with high volume as the INP test support?Now for a look at our markets. The Weekly S&P500 chart stopped it's drop at the center line of the Bollinger band. This weekly drop came with higher than average volume and the Daily Chart has once again closed below it's trading bands and the 65 day moving average. Looks as though the "next shoe" may be about to drop. I'm looking at the inverted ETF's for a trade.
The DecisionMoose posted by William Dirlam has continued to stay CASH for sometime now. I really don't see a switch coming anytime soon. Click HERE to see the latest Moosecall. Don't forget to click the refresh button on your browser to make sure the info is timely.
I'll be running the GarpStocks Scan later today. So you can click this LINK to see the most recent list. Thanks for stopping by and good luck with all your trades.
Labels: BRIC ETF's, candlestick charts, decisionmoose, garp stocks, RedDirts BRIC Trade, sp500, weekly update
Saturday, April 5, 2008
RedDirt's Weekly Update
This week I'll start out by taking a look at the action in this past weeks BricTrade. The $HKO:$USD ratio chart (click here) is a strong contender for trade opportunities in the EEB solely off buy and sell signals on the Stochastic.For the week we see that EEB led the other BRIC ETF's with a 7.22% gain. While the winner for the week among the individual country ETF's was EWZ with a gain of 8.89%. On Tuesday we saw trend line breakouts above the gator moving averages for both EWZ and FXI. RSX has made a nice recovery since it's latest stoch buy signal, whereas INP still appears to be under distribution as it closed below all moving average's and closed down -3.75% for the week.
Now for a look at the Weekly SP500 chart. As I was expecting we saw that bounce to 1380 this past week. It finally got touched on Friday as evident here on the 60 minute chart. Now for the hard part. Where does it head from here? My view would be that a sideways consolidation would be nice but that may just be wishful thinking. What I'll really be watching closely is any pull back to the 1335-1343 area to see if that area holds for support. I really wouldn't be surprised to see an inside week on the weekly chart. What I mean by that is last weeks high and low will not be broken this coming week. But, I'll be prepared for anything to happen by being glued to the 60 minute and 1 minute charts.
Time for a look at the DecisionMoose. Be sure to check in later this weekend for the most recent Moosecall and Moosignal. Be sure to hit refresh on your browser to see if it has updated.
If you have some extra time this week this LINK will direct you to the learning center at Barchart.com. Thanks for stopping by and good luck next week with your trades.
*Please remember nothing mentioned on this blog is a trade recommendation, the purpose of this or any other post here is to get you, the reader, interested in learning what technical analysis can do for you.
Labels: BRIC ETF's, candlestick charts, decisionmoose, RedDirts BRIC Trade, sp500, technical analysis
Saturday, March 15, 2008
WEEKLY UPDATE
There is no such thing as a quadruple top! It will be broken. This past week we closed above the hanging man on the $VIX. I would be very cautious at this point. I'm looking for a little rally Monday then a very steep sell-off to 1176 on the S&P 500. Now that we know the bottom is close, look to be holding that small long but get ready to go all out around the 1176 area on the S&P500.(I'm saying the 1270 will more than likely fail,,,Sorry) Full Moon low will be GOOD FRIDAY. All the easy money will be made at a $VIX around 40. This is just the RedDirtTrader's view by looking in the rear view mirror!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
The NYSI broke it's trend line last week which tells me there is a lower low coming!
Good luck and be looking for a little bounce Monday then a REALLY good buying opportunity late this week. The stochastic started up last Monday on the BRIC TRADE so we didn't get a stoch buy signal. This has me waiting on the sidelines. By looking at the individual charts the EWZ and RSX look to be the strongest at this time. That makes sense. Raw materials and commodities you know!
As for the DECISIONMOOSE I think there will be a switch to cash coming very soon. His program may say to hold GLD for another week, but I'm thinking I would be looking to take a profit here.
Thanks for stopping by and good luck next week!
Labels: BRIC ETF's, candlestick charts, decisionmoose, sp500
Sunday, February 3, 2008
Weekly Update
This is one hell of a correction or the beginning of the next Bear Market. The WARNING SIGNS showed up some time ago. The reverse H&S pattern target was hit in October '07 on the WEEKLY CHART . But if you look at the bounce off the the 38% retracement line and the bounce off the lower bollinger band on the MONTHLY CHART you would think this is only a correction. I'm treating this as a bear market beginning due to the fact the charts tell me to. I've been somewhat defensive since July 2007 and the repositioning helped. My retirement fund is up for the year and so far I'm beating the S&P500 by about 6%. Carl Swenlin has some interesting comments on the markets in his latest interview. Enjoy the Super Bowl and have a great week.
Labels: candlestick charts, sp500, Super Bowl, technical analysis
Sunday, January 27, 2008
Weekly Update
By the look of last week's candle stick there appears to be indecision in the market. The upper and lower shadows are long with a small reel body squarely in the middle. The bullish signs are that the market looks to have bounced off the 38% retrace line and finished above last weeks close. The bearish signs are that we are technically in a downtrend by being below the red-green trading band. So therefore Bear Market Rules must be applied. It's at times like these when discipline must be in your bullseye. I've been hiding out in my fraidy hole and the last few days have been pretty SAFE. Just in case this is an F-6 Bear Market I've been searching for an even safer fraidy hole. Like Carmer says," there's always a bull market somewhere." This is one area that is interesting to me. I've added it to my Red Dirt Trader Charts List. It's one of the few indices that show Big money is betting on. Select the Nikkei 225 and click on "GET CHART". Be safe out there in this here storm. See ya'll next week. Thanks for stopping by.Labels: candlestick charts, sp500, stockcharts, technical analysis
Thursday, January 24, 2008
Some Positive Divergence
I know this chart looks like a drowning victim, but I'm starting to see some positive divergences in it. This is not one of my public charts listed on RED DIRT TRADER CHARTS but it is one I keep a close eye on. You should be able to click on the chart for better view if your equipped with the software to do so. Sorry I can't provide a link at this time to enable you to track the movement on a daily basis. You can enter the ticker symbol at one of your favorite STOCKCHARTS sites to keep track.Labels: candlestick charts, stockcharts, technical analysis
Thursday, January 17, 2008
CAPITULATION
Have we witnessed true capitulation in the $NDX. I believe so. The breaking of the trend line and the most volume for a single day in years. Seems so weird to see this happen so close to recent highs and nearly 38% Fibonacci Retracement level above 2002 lows but it has happened. Thank God. Now for some really big gains. I warned of the SPINNING TOP on 11/02/2007 and laid out several support area's for a bottom. It now appears one of the major resistance area's will soon be the new support. QID up about $13 since November 2nd.
Labels: candlestick charts, growth stocks, major indices, Nasdaq 100, stockcharts, technical analysis
Tuesday, December 18, 2007
Update
As this latest shake-out continues to unfold it makes it easy to place bets with very little at risk. As I see it the gap and the neckline are there for support and the upside takes us back to the June highs. The one thing I really want to see is the ChiOsc make a lower low and the support hold up. That would tell me, and all the Sovereign Funds, that we bought at a good level. If this works out all those who have bailed out will get a chance to buy at a much higher ask. If I'm wrong, oh well, it was worth the risk.Labels: candlestick charts, major indices, technical analysis
Tuesday, December 11, 2007
Everyone should get a 2nd Chance!
Any close below last years high should be a wake-up call.
Labels: candlestick charts, major indices, technical analysis
Sunday, December 9, 2007
Sometimes Gaps Get Left
The gap on the 60 minute candle chart never got tested for support. I really expected it to happen early last Monday morning but it did not materialize. Instead, early last week the profit taking that started when the market touched 1489 continued but found support quickly along the 35 period ema trading band about the same time it crossed the 140 period ma. That led to a test of the neckline on the Reverse H&S pattern which was easily put in the rear view mirror on Thursday. The old Bull/Bear war zone of 1490 is behind us now, once again look for that area to provide support. If so, expect the target price off the reverse H&S pattern to get hit very soon. Gary over at Between the Hedges as been saying he expects the "Mother of all Short-covering rallies" to materialize. I tend to agree and believe it may have already started. Thanks for stopping by and you can check out my stockcharts.com public list at RedDirtTraderCharts .
Labels: candlestick charts, major indices, sp500, stockcharts, technical analysis
Monday, November 26, 2007
Nearing the BOTTOM
I'm sure the capitulation day is close. Babies being thrown out with the bath water. We may still yet be a week or two from the bottom so I am 66% long this market. Up from 0% just a week ago. Just keep a very close watch on the 1400 level of the S&P 500.
Labels: candlestick charts, sp500, stockcharts, technical analysis
Tuesday, November 20, 2007
Added an old chart to my Public List @ Stockcharts.com
The chart to the left is a new addition to Red Dirt Trader Charts. It appears to me we are now in the 3rd and final wave of the unwinding of the carry trade. I've watched this chart for sometime now but just decided today to make it public.
As we enter the final hour of trading today the S&P is down 11 points and the percent of stocks trading above their 50 day ma is @ 18%. That would put the number below 100 on the Secret Recipe Chart. I'm putting money back to work in chunks. I feel like the upside potential from here out-weighs the risk. We are so close to the support trend lines on chart #11 for the daily S&P 500 that this seems like a good buying opportunity.
Labels: candlestick charts, major indices, sp500, stockcharts, technical analysis
Wednesday, November 14, 2007
GARP SCAN
It's been a couple of weeks since I last ran the GARP scan so a couple of days ago I decided to see what else may be showing up with the recent decline in the overall market. This was by and far the most stocks I'd ever seen show up in this scan. (33 stocks) Some are familiar names and some I've never heard of. I've always had trouble posting Excel spreadsheets on my blog so I built out another googlepage for a better view. I think this is much better. Just click on this LINK and once your there click on the GARP STOCKS hyperlink. I've also embedded the link to the title of this post so can just click it if you wish. Also be sure to check out the 60 minute candle chart at RED DIRT TRADER charts. We have a set up candle on the trading band.
Labels: candlestick charts, stock scans, stockcharts, technical analysis
Tuesday, November 13, 2007
GETTING DOWN TO DIRT CHEAP?
The Nasdaq 100 has under performed the S&P500 as you can tell by the chart to the left. However, we are getting very close to testing the breakout on the $NDX:$SPX ratio chart. It is now time to start looking for a reversal pattern on the Nasdaq 100 as well as some of your favorite tech stocks. Look for a hammer, bullish engulfing or bullish piercing candle with much higher than average volume for a signal that the bottom is in. HERE_ are some examples of some other reversal candle patterns. Some are stronger than others,,for example the hammer with very high volume most likely is THE Bottom. Sometimes a weaker reversal only leads to a temporary bounce (which is a playable trade) and then the downtrend continues. The SECRET RECIPE chart shows that the $SPXA50 has not yet reached my buy signal for the SP500. I'll continue to wait patiently to put some money back to work in my retirement account, which could be tomorrow, who the hell knows. I'm sure the chart will tell me when. But for now my money is drawing interest at a very low rate, still that's better than it disappearing into thin air. Be sure to check out at least the 1st four pages of charts @RED DIRT TRADER CHARTS for some insight to the market.
Labels: candlestick charts, Nasdaq 100, sp500, stockcharts, technical analysis
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