Friday, November 03, 2006

Fraday Warp Up

Crazy day - but I kind of predicted it this morning so you can forget what the bobbleheads on bubblevision said about oil and the blah blah blah - fact is the market needed a rest. Now IWM didn't but that's another story which we will cover later this weekend.

I made money today - I played HANS. What, you sputter, again?!? Aye, says I, I again played HANS. Why do I play the same stocks day after day? Because they set up for a play and I know how other traders will be acting given that set up. I know because I observe - you can too. Here is a picture showing HANS in both 15 and 30 minute charting modes. Note the similarities.

I'm showing it to you this way because you need to know what a blow-out bottom looks like and it doesn't necessarily have to be a white candle - it can be red. It just needs a lot of volume (one of the few times I will use volume to inform my trades) and it is a hammer-like critter regardless of the time frame. I.E. a long tail or lower shadow which is how it is referred to in polite company.

Where it says "buy here" I did and where it says "sell here" I did also. I was 6 cents early on the sale but that's ok - I picked up 48 cents overall.

For Monday we are looking at a recovery. Again the market never goes straight down - it moves in fits and starts. The interesting thing is the up/down ratio went up today to 45% or into the neutral territory. We added to the 20 day new highs brining it to 423 and we subtracted from the 20 day new lows printing 591. That can only mean one thing - what you didn't see was a market struggling to right itself. The SPY finished in the red but the Q's finished strong as did DIA. The VIX remained in neutral. Prognosis - Monday is an up day. I'll probably play HANS again.

Mr. Magic missed today making him 26 and 13. For Monday he says tails - bear in the air - Sir, I disagree!

See you later this weekend with some more tripe and trivia.

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