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Sunday, May 16, 2010

Butterfly



The chart on the left is FAS 30 minute envelope(9,9) with DOMA 77.  After going outside the envelope on the computer glitch day FAS came back in (great point to go long) with a gap and is back testing the lower line of the envelope. For FAS to continue to go up it must reverse and start a move.  Fas appeared to be doing that on Friday at close.  I do not count the DMRM  that happened at the very end of the day.  That could have been large buy or short covering.  It is negative for now.  This brings us to the next chart which is a 5 minute FAS chart.  The gap down down Friday created a stranded Island formation.  This a true one for I can shoot a arrow from right to left.  FAS and many 3x ETF do gap up and down a lot but not one where I can draw a line thru.  Borrowing from  commodity traders they fail 15% of the time and have decline of 22% on an average roughly 7 points and that would put FAS 23 which is another negative.  I have included a monthly chart on SPX  A continuation of the rate decline from 1576 to 1220 in the 3 parallel channels first bring the spx to 1044 and subsequently to 850.  This is not very positive now the non-confirmation comes if we were to move above 1220 about 100 points.  Lastly FAS recorded a very negative DKOD on Friday.  Reaching the high in the first 5 minutes and never trading above it all day.  This is decidedly negative.  I am quite bearish

6 comments:

  1. Hey Dino -

    You are keeping an eye on that FAS low RSI mark of $23.48 yes? That's where we are goin!

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  2. your 31 month top to bottom , bottom to top is consistent with someone elses work, though they didnt count the months, they displayed it differently

    jxxd

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  3. not to say your work isn't original, it just reminded me of other work - the 2002-2007 period, etc

    jxxd

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  4. Hi Dino,

    Thank you for providing all this great info. I wanted to ask you, what software are you using in the first chart?

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  5. bio7
    That is chart from Schwab

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  6. Thanks Dino. Have a great day trading tomorrow!

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