Tuesday, April 20, 2010

To err is human to forgive oneself and move on is economical

I have a lot of respect for commodity traders.  The leverage is much higher in currency and commodities than equities hence one has to be quick to accept a mistake much faster than in ETFs and stocks.  After the Goldman story all indicators were crushed but a fresh new life sprang up today.  Yesterday's low on SPX was 1183.68 the DMRM was at 1206.20.  It happened rather quickly in the morning giving the rest of the day to buy.  Also FAS gave a buy signal at 104.47 yesterday but I was in cash this morning and waited till after 7.20 to buy. Generally if there is gap open up or down at about 7.15 a.m. there is a counter move that is a good time to hop on.  FAS is back inside the envelope. That is the commodity trade.  Wait for the issue to go out of the envelope and when it comes back in at the lower line one buys and at the upper line one shorts. Also a third reason to buy was FAS crossed the 60 min DOMA 77 and the fourth reason was positive Dino's KOD on FAS I got yesterday.  With such high scores on buy the decision was simple. Chart on the right is FAZ.
I see a triple top. Blue portion gives the height and the duration. If it takes a long time to develop then they are not that good.  The bottom is generally as far away from the support line as the top is.  There is a ton of great information on this and many other topics at choose chartschool.  I make it a habit to visit here and read for about 20 minutes when not a whole lot is going on in the market around 9 a.m.  Based on that the FAZ should show a sharp reversal at around 10.80.  I am bullish. 

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