Sunday, April 10, 2005
Issue Contents:
| 18:55 | Swing Scanner Results Friday April 8th closing data |
| 18:56 | Market Statistics For Friday April 8, 2005 |
| 18:58 | Swing Trade Setups Featured charts for Monday April 11th |
| 20:35 | Quick Take: Gold Revisiting the Yellow Metal |
Friday April 8th closing data
Click on the title above to expand this document.
Statistics for Friday April 8, 2005
Note: Statistics are compiled based on our custom symbol universe of the most heavily traded stocks.
| Symbols in Up Swings | 430 |
|---|---|
| Symbols in Down Swings | 323 |
| Up/Down Swing Ratio | 1.33 : 1 |
| Advancers | 21% |
| Decliners | 77% |
| Unchanged | 2% |
| Up Bars | 38% |
| Down Bars | 35% |
| Inside Bars | 13% |
| Outside Bars | 11% |
| Close > 20EMA | 21% |
| Close > 50SMA | 37% |
| Close > 200SMA | 56% |
| 20EMA > 50SMA > 200SMA (trend up) | 34% |
| 20EMA < 50SMA < 200SMA (trend down) | 29% |
Featured setups from Friday April 8, 2005 closing data symbol scan
Jump to: Long Setups | Short Setups | Special Situations
Notes for the Day
- Despite the big down day Friday, price remains in chop and is still within striking distance of an upside break out. While my bias might now lean toward more downside, until the chop is cleared one way or the other I’ve no choice but to stalk both directions. Such times are frustrating for short and long term traders / investors alike!
- Keep an eye on Gold and the US Dollar – while longer term gold charts indeed look terrible, the US dollar is stalling at resistance. Economic news starting Tuesday this week will again bring the Greenback into international focus. See seperate article posted following this.
- It seems everyone believes oil has run its course, and indeed the charts suggest this. For this very reason we should be ready for any surprise to the upside. More aggressive swing traders may wish to avail themselves of any weak bounces that show up for a short, perhaps starting Tuesday (an up day is first required). All oil stocks are in Special Situations today – extra care and caution required.
Long Setups
General common strategy: Unless noted otherwise, buy stop just above the “high” value, with an initial protective stop at the low value of the bar, not below the bar.
Retracement or Pause in Up Swing / Up Trend
YHOO – note Feb reversal signals suggest that a lasting bottom has been put in – now the challenge is to find an acceptable entry. Here the principle risk will be a minor wiggle up which triggers new stops, only to see price reverse into the close. Nonetheless its worth stalking – we can’t earn without risk. If this attempt does not pan out a retracement to former resistance will be the next likely location for a trade on the long side.
CAE:C (TSX) – probably belongs in “special situations”, as this sometimes thinly traded stock will likely need more than one attempt to catch a viable long. I’ll be stalking this waiting first for the trigger above Friday’s high to be hit – will then set a long order above the first retracement of the day, more than likely as measured off 10 or 20M chart. Tight stops.
I’ve included the weekly chart as a reminder that “success” here may not account for much – its in a 1 year long consolidation. Still, the recent activity gives reason enough to stalk in case it is ready to emerge from this long period of sideways trade.
Test of Top – Continuation
BCE:C (also on NYSE) retracement after a “breakout. Seems likely to fail however communications companies have been generally trending higher lately despite overall market conditions. Caution, low volume on breakout suggests buyers may be on strike at these prices…
Short Setups
General common strategy: Unless noted otherwise, place a sell alert at or just below the low of the setup bar, and look for the first failed intraday bounce after the low has been broken. What we are looking for is price to push down, bounce a little, and fail again – this is where we want to get short.
Test of Top – Reversal
JNJ – Dark Cloud Cover. Caution, this has been one of the stronger big drug cos, not having quite the same issues as MRK and PFE to worry about.
Retracement or Pause in Down Swing / Down Trend
QQQQ – if weakness persists, the daily chart gives us reason enough to stalk a short. Target of a rising wedge is the lower base of the wedge.
AFL – bear flag to overhead resistance
FCS, note comments on chart.
Special Situations
OIL – intended as a reminder to watch the usual suspects on the off chance that Crude manages to find support in the 52–53$ range despite all expectations…
ECA:C (ECA:NYSE)
CVX – integrated oil – remains above support on the weekly
VLO – retracement from new 52 week high remains above former resistance that may yet prove to remain new support.
Its time to dust off our Gold playbook again, while keeping a close eye on the US Dollar.
ABX – Daily, a horrible chart but less horrible than many gold charts. Note price has hovered under resistance for two weeks now without breaking down further, while quite a few large and small Gold producers have revisited the February lows.
ABX – weekly, having made new multi-year highs has pulled back – a little farther than we’d ordinarily like to see if this trend is to continue, but then Gold is at the mercy of the US Dollar more than any other factor, so we have to accomodate our thinking some what to this reality. Of primary concern are the three mountaintops leading into 2004—we frequently see three distinct rally phases prior to the end of a longer term trend. More on this later.
FCX – weekly, a situation not unlike ABX. where price over the long run has remained solidly under resistance set last year.
Gold Indexes
S&P Toronto Gold Index
HUI Gold Bugs Index
The indexes themselves paint an even more sobering picture. It may be that the best longer term gold investors can do now is pick stocks that lose less rather than gain – there are very clearly some dogs within the indexes.
US Dollar
As fears of inflation superceded fears of a burgeoning trade deficit and current account balance, the dollar found friends at home and abroad betting on a faster-than-expected rate of interest rate increases in 2005. Clearly this has not been good news for Gold – from the moment the Federal Open Market Committee changed their tune, albeit ever so slightly, Gold was put under significant pressure. Until the fear inflation takes a back seat to other, more unsettling, concerns, Gold isn’t likely to do much for long-only investors.
It is however time to at least be prepared to exploit a surprise in dollar/gold trade. This week investors will get fresh insight into the state of the economy, international trade, and inflation starting with Tuesday’s International Trade report and release of the last FOMC meeting minutes. And looking at the chart, it seems that other forex traders agree, as the US Dollar dances on the line between support and resistance:
Following the parabolic drop in the Greenback over the back half of 2004, the dollar has continued to trade in the lower half of the range established by that significant decline. Last week, price pulled back below resistance – shown here off the rising wedge.
Knowing that the ultimate target of a broken wedge is the base of the wedge itself, there’s reason enough to consider exploiting dollar weakness either in forex or via Gold. Of course, if need be we can take the other side of the trade and short Gold and be long the Dollar if the data so suggests.
We merely need a catalyst for action, perhaps coming up this week…