Paul J Singh

Category: overbought

  • Monday’s Game Plan and Free Trade Report

    I am offering today’s Trade Report, which features my plan for Monday and the coming week, free to blog readers today. Enjoy! January 5, 2008 Market Notes The market is overbought. I’ll get back to that, but first let’s take a look at the overall picture. The market (via SPY-SSO)…

  • Trade: FAZ

    While not at extreme levels, the market is starting to get a little overbought. The T2108 reading is above 70 and many individual stocks are posting stochastic readings near 70-80. While not making any big bets yet, I took a small probing position in FAZ (entry at $35.09), which gives…

  • The Six Indicators

    I am getting a lot of questions about the 6 indicators I use to measure market extremes. Most seem to think I am talking about stochastics, TICK, T2108 and a few others. It’s not that simple. I’ve created the indicator I mentioned, and 4 of them are combinations of some…

  • Overbought Sectors

    Here is a list of sectors with the highest stochastic readings. I use this information for three setups: 1. To find sectors with good chart patterns and await a pullback for entry 2. Find sectors with bad chart patterns that are bouncing to resistance and ready to short. 3. Find…

  • Don’t Overpay for POT

    Ag related stocks are finally starting to pullback. Those of us who missed the recent run (I raise my hand in shame) are starting to get itchy trigger fingers. Rest assured, I’ve got my gun set on safety. Take a look at Potash. Even with the 10 point pullback from…

  • Sectors Analysis

    The 20 most oversold sectors: The 20 most overbought sectors How do I use this information? In the overbought sectors, I look for charts where stocks are near highs and wait for a healthy pullback. In oversold sectors, I look for stocks oversold near support that have good risk-reward potential.

  • Trade: Gold’s Sell Signal

    Over the past few months overbought stochastics readings have given reliable short term sell/short signals. We are just about there right now. I used today’s strength to short gold via DZZ (300 shares at $29.22), which is a leveraged gold short. Here is the GLD chart. Pay attention to the…

  • Thesis for Fed Day

    Everybody is gearing up for Fed day. There will likely be volatility and an overreaction to the decision. Even if the Street gets what it wants, a positive price move will likely be short lived. As Rob at Quantifiable Edges points out, positive reactons to the fed tend to fade…

  • Market Notes

    I received a few e-mails today asking if today is an “orderly pullback” or the end of the “bear market rally” that I’ve mentioned. Well, it could be both. There is still room to move higher and still remain in bear market mode. However, in the short term, all today’s…

  • Chart: SID

    SID looks like many of the charts in my longs watchlist. A bit extended but attractive on a low volume pullback to support. Take a look at the stochastic reading. I don’t like to enter on overbought conditions, and the has reached that level with the fast line above 80.

  • How Can You Not Bet Against Gold?

    I am hearing a lot of bullish chatter amongst bloggers and media about the near future for gold. This seems to always happen when a former leader (momo stock) breaks down and prints a dead cat bounce. I love it when this happens. Let’s ignore the talking heads and take…

  • DBA Analysis Revisited

    On February 26th, I noted my skepticism about the ag sector. At the time ag ETF DBA was trading at $43. As of this posting, it is at $39.50. I received many e-mails disagreeing with my analysis. This post is not to boast, but to point out how important it…

  • Agriculture: Now What?

    Well, it seems the whole world knows about the ag sector. For me, that means it’s time to get the *blank* out. If you take a look at the chart of DBA, an agriculture ETF, it is hitting a level where it typically pulls back from. While there are more…

  • Better to Play the Second Bounce

    It’s easier to play the second bounce, as opposed to trying to time the first. If you take a look at the chart above (SPY vs T2108), it is obvious that there is no sure fire method in timing the bottom of a correction. The T2108 indicator (via telechart) measures…

  • Thinking Out Loud About Amazon

    Like many, I am kicking myself for not entering AMZN yesterday. On Thursday, I featured it as a breakout-pullback candidate. When I made my trades yesterday, I came very close to taking a 500 share position at around $44.40, but decided against it for two reasons. First, I had made…

  • Deja Vu

    EWO, an Austrian ETF, is looking eerily similar to the way it looked at this time last year. The stock had broke out of a base in late ’05, pulled back to the breakout point, and made a move in early ’06 that measured 6 points from breakout. A negative…