Tuesday, June 9, 2009

Inside Trendline

This chart was posted in a chat room but the trendline was poorly drawn. After scolding the poster about it, I though I should tell my blogees about it with my better-drawn trendline..

What this shows is a line that supported previous lows - lots of them - and now looks be coming through the level I have been writing about as the target for this rally. It is but another reason I think the upside is limited.

6 comments:

paulocuana said...

Hi Michael,

Apropos to a "limited upside" Investors' Intelligence is reporting sentiment readings that haven't been this high since the first week of January.
That's January "2008".

Paul O'Cuana

Mike said...

Some traders today were commenting on a NR7 candlestick on the SPY daily chart yesterday, and now looking for the potential today of a bearish outside reversal day today.

Quick Takes Pro said...

Paul,

You got me thinking about that so I expanded it a bit into my column today. My sentiment expert source verified it although he said Dec 2007.

Quick Takes Pro said...

Mike,

What's NR7? Did I forget something from TA 101?

So much for the bear reversal. I sent my column in clinging to the short-term bullish argument, when the Dow was down 90. Needless to say, I won't have egg on my face for at least one more day.

paulocuana said...

Michael,

It all depends on how you look at it. If you go by the simple reading of percentage bears the highest number before today's 47.7 was the reading of 48.4 on January 8th.
Your sentiment expert is probably using the popular Bulls divided by (Bulls + Bears) method which indeed is the highest since the last reading of December 2007.

Paul O'Cuana

Mike said...

I just learned about NR7 today. It signifies the narrowest candle in the last 7 days and suggests range expansion is likely. The trader I was following thought it may also lead to a bearish reversal day today, given the action in the morning. But the close was pretty strong today.