In last night's Trade Report, I highlighted commodities as an oversold bounce setup. I used POT as my primary example and entered today based on last night's analysis.I bought 300 shares of POT at the open at $176.31.Setup: Oversold bounce setup, within a longer term topping pattern. Stochastics are oversold and the stock bounced off... Continue Reading →
I took partial profits in a few of my commodity related shorts and entered QLD this morning. I mentioned QLD in last night's trade report. As noted in the report, the Nasdaq has recently held up better than the S&P 500.Recent free trade reports:July 15July 14
Things are looking ugly and the sentiment seems to be quite negative out there. I bought SSO at $59.96 and PBR at $70.15.Note to anybody playing a short term bounce. You must be willing to take a small loss. I do not make these types of trades without a low risk stop on place.
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 of the indicators many of you... Continue Reading →
All of my oversold bounce indicators are now flashing buy signals. However, I do have some concerns and am not taking on any huge positions here. While I have made some trades to the long side to try and capitalize on a bounce, they are all average or small in position size. Why am I... Continue Reading →
I bought 500 shares of EWZ at $90.06.Setup: Oversold bounce setup. I had a buy stop set above $90. Volume was great today, and the highs held, unlike that of the Dow.Risk: My stop is set under the recent lows. Target is the $94-95 range. I chose the Brazilian ETF over the US markets for... Continue Reading →
I use 6 indicators for deciding when to play an oversold bounce. Today four of them are giving buy signals. If we get a good amount of weakness tomorrow, the fifth indicator will likely give a buy signal as well. For the time being, I am ignoring my watchlist. I am only playing the indexes... Continue Reading →
The 20 most oversold sectors:The 20 most overbought sectorsHow 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.
Take a look at the DUG chart below. Notice that RSI has made a higher low while price action has made a lower low. The ETF, which is short oil and gas, is also extremely oversold. I took a small position this morning.
Long time readers know one of my mantras is to keep on doing it until it ceases to work. Once I see a pattern emerge, I will continually go after it.Let's take a look at the MOS chart to illustrate this point. Over the past 6 months, buying the stock when the stochastic indicator became... Continue Reading →