The RSI Effect

As long as the lows hold, the bottoming thesis is in effect. I have focused on more short term 3-6 month charts lately, but here is a two year chart showing the power of the oversold RSI, even in a longer term down trending "topping" market.

Trade Entry: POT

I entered POT today as a bounce play at $125.10. As I have been preaching, postion size is small. Reasons for entry:1. Stochastics oversold2. Extreme weakness today3. Positive divergences in RSI and OBV (indicators are making higher lows while price is a lower low).Risks:1. Continuation of downtrend2. Negative market reaction to tonights bailout plan.

Postive Divergence in Apple

Today I entered AAPL at $124.92. I like the way the stock has handled the retest of the recent low, holding the level and printing positive divergences in a few indicators. While the primary trend is down, I expect that resistance will be tested. The range marked on the chart below provides a good idea... Continue Reading →

Today’s Trade: USD

Wow, what a morning. As I noted in the Trade Report last night, it is not the time to make any big bets. However, today's reaction may provide some good opportunities.I came into today with very few setups. One was to buy USD on weakness based on the oversold bounce idea (though it is a... Continue Reading →

Final Exit in Pot Trade

update (11:57am): typos fixed. Thanks to those who pointed them out.I exited what was left of my POT position at $159.89. The final details of the trade.100 shares of POT bought at $139.22Exit 50 shares at $150.04Exit 50 shares at $160.06Average exit $155 for 11.3% gain.Total Profit : $1583 Recent POT and commodity related posts:Commodity... Continue Reading →

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