Teach Talk Trade Day Trading & Technical Analysis

04-20-08  DOW Directions:  A Daily Technical Analytical View of Stocks, Futures, Eminis and Forex for online and day traders.

Weekly candlesticks and trend point to a rally in the SPY stock index.

As the trend changed to positive, the weekly candlestick pattern posted a bullish engulfing pattern.  This is always seen as a positive sign. Equally as postive is the trend turning up.  This positive turn in direction is hint of upside since last November.

The daily CMO, our momentum oscillator, turned up and could assault its upper boundaries over the next few weeks. once again. The important fact is that the CMO moving in a positive direction once again. This could result in another couple of weeks of rally.

The T8 (maroon line), our moving average that defines trend, changed direction last week. This new leg to the upside is significant.  We haven’t had a hint of upside trending since last November.  different story.  We expect price to retrace to the uptrending T8 and at that point we would love to buy this market.

Last week’s candlestick formation was a “bullish engulfing” pattern. The can be a very significant candlestick pattern. Bullish engulfing patterns are usually followed by strong market movement to the upside. 

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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DOW Directions 02-29-08 (Friday): A Daily Technical Analytical View of Stocks, Futures, Eminis and Forex for online and day traders.

DIA (Dow ETF): Dow trips, falls and begins to bleed.

Thursday’s turned negative and we anticipate further downward drift. Negative technical clues hint tough sledding ahead.

The daily StoRSI, our momentum oscillator, has turned down at its upper trigger level. Typically, the StoRSI draws large sine curves that trace from top to bottom of its range. After reaching the upper trigger levels of the momentum oscillator, momentum has waned and now is gathering steam to the downside. This usually means the market will find it difficult to rally.  As long as the StoRSI continues its downward travels, the market will have difficulty rallying.

The T8, our moving average that defines trend, continues to point in a slightly upward direction. Without a strong angle pointing up or down… identifying a trend can be a very tricky proposition.

Thursday’s candlestick was not significant. What is significant is the wicks, above the candle bodies, posted on Tuesday and Wednesday. Markets tend to move against large wicks. The wicks should now become a resistance area.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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DOW Directions 02-29-08 (Friday): A Daily Technical Analytical View of Stocks, Futures, Eminis and Forex for online and day traders.

DIA (Dow ETF): Dow trips, falls and begins to bleed.

Thursday’s turned negative and we anticipate further downward drift.    Negative technical clues hint tough sledding ahead. 

The daily StoRSI, our momentum oscillator, has turned down at its upper trigger level. Typically, the StoRSI draws large sine curves that trace from top to bottom of its range.  After reaching the upper trigger levels of the momentum osicllator, momentum has waned and now is gathering steam to the downside. This usually means the market will find it difficult to rally…as long as the StoRSI continues its downward travels.

The T8, our moving average that defines trend, continues to point in a slightly direction. Without a strong angle pointing up or down… identifying a trend can be a very tricky proposition. 

Thursday’s candlestick was not significant.  What is significant is the wicks, above the candle bodies, posted on Tuesday and Wednesday.  Markets tend to move against large wicks.  The wicks should now become a resistance area.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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DOW Directions 02-29-08 (Wednesday): A Daily Technical Analytical View of Stocks, Futures, Eminis and Forex for online and day traders.

DIA (Dow ETF): Dow bumps up +114.70 as market becomes technically overbought.

Tuesday’s market climbed steadily during the session, leveling off and closing up over one hundred points.  This push has caused some of the momentum indicators to be overbought.

The daily StoRSI, our momentum oscillator, is now approaching its overbought territory.   The StoRSI is very close to being overbought.  Any turn down in this indicator, before it reaches the upper trigger, would be very negative.  We could see market weakness, any time in the near future, due to this overbought situation in momentum.    

The T8, our moving average that defines trend, has turned flat during the last two weeks.   Yesterday’s action turned the T8 to the positive sign.  I certainly would not “bet the farm” on the upside.  With momentum topping out and the consolidation of the last month continuing….we’d be very cautious at this time.

The white candle, posted on Tuesday, is of no significance.

 ***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its cyclical period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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DOW Directions 02-14-08 (Thursday): A Daily Technical Analytical View of Stocks, Futures, Eminis and Forex for online and day traders.

DIA (Dow ETF): Market claws its way to higher close.

Tuesday’s market saw the DJIA close up +22.40 points. Wednesday’s action saw the weak market rally … continuing its move from the oversold momentum situation. The trend remains positive, but we are entering a relatively flat period with the T8.

The daily StoRSI, our momentum oscillator, turned positive on Monday and is moving up from its lower trigger level. Usually markets can put on decent spurts when the momentum oscillator is traveling from its lower trigger to its upper trigger. In this case, the market has slowly moved to the upside from its lower levels.

The moving averages, T8, suggest just what the market is doing: waffling. During the last week and a half the trend has gone from down to up to down again. This undefined direction has caused the market to flatten (or vice versa).

Tuesday’s white candle was another “spinning top”.  Spinning tops are signs of indecision by the market.  They are days when the market posts square, little solid bodies with wick extensions coming from the top and bottom.  They literally look like spinning tops and the market usually is unable to put on major points in either direction

Please keep and mind and read the following thoughts on volatility. We have been preaching about volatility since August and we don’t believe that things will calm down for many, many months.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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DOW Directions 02-01-08 (Friday): A Daily Technical Analytical View of Stocks, Furtures, Eminis and Forex for online and day traders.

DIA (Dow ETF): Evidence points to longer term upside for DOW.

Thursday’s action saw the DJIA reverse once again and close up +207.53.  After the FED announced its rate cut, the DOW rallied, only to peel off all the rally points on Wednesday.  Thursday followed with a weak opening and then an all-day rally which turned the trend on the daily charts to the upside. 

The StoRSI, our momentum oscillator, has penetrated its trigger level of +90 and now is waffling over its trigger level. This high StoRSI level and subsequent turn to the downside suggests downside action, yet the market has rallied even though it is very overbought (a strong sign coming from the markets).  The weekly StoRSI is bottoming and this is a very positive sign for the market.  The market must now contend with the overbought situation in the momentum oscillator (downside potential) and the positive turn to the T8 (upside potential).  This clash of major technical indicators usually leads to choppiness.

As the various indices turn up, it is important to buy retracements to the positive T8.  This exponential moving average is suggest a new leg to the upside in the stock indices and should be monitored for buying opportunities.

Thusday, the market posted a large white candle. Even though we had a shooting star on Wednesday, the candlestick supply and demand is not always one hundred percent accurate.  When candlestick defy the direction they hint at, the market is telling us something.  In this case, the market is telling us that it wants to put on a new leg to the upside.

 Please keep and mind and read the following thoughts on volatility. We have been preaching about volatility since August and we don’t believe that things will calm down for many, many months.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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DOW Directions 01-31-08 (Thurday): A Daily Technical Analytical View of Stocks, Furtures, Eminis and Forex for online and day traders.

DIA (Dow ETF): Buy the rumor, sell the fact.

Wednesday’s action saw the DJIA slide down -37.47.   After the FED announced its rate cut, the DOW rallied, only to peel off all the rally points and end in negative territory for the day.

The StoRSI, our momentum oscillator, has penetrated its trigger level of +90 and now is headed in a negative direction.   This high StoRSI level and subsequent turn to the downside suggests downside action for the near term. The weekly momentum is a completely different story. The weekly StoRSI is bottoming and this is a very positive sign for the market. We always suggest and encourage traders to look at and analyze the weekly charts.

The market continues to affect the T8 in a negative fashion.  Although the T8 is trying to turn up, we have no evidence that it will happen.  As long as the T8 is negative, we will continue to approach the market from the short side.

Wednesday, the market posted a “shooting star”.  Shooting stars are supply and demand days when the market traces a large wick to the upside and closes at the bottom of the range, leaving a little solid body.  This is a directional stopper to the upside.  Seldom does the market rally after posting a shooting star. 

Please keep and mind and read the following thoughts on volatility. We have been preaching about volatility since August and we don’t believe that things will calm down for many, many months.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

 DIA: Play Now | Play in Popup | Download (535)

DOW Directions 01-23-08 (Wednessday): A Daily Technical Analytical View of Stocks, Furtures, Eminis and Forex for online and day traders.

DIA (Dow ETF): Capitulation ends with big down gap and stunning recovery.

We have discussed capitulation during the last two days and Tuesday’s action is exactly what happens when capitulation takes place.  After gapping down as much as -450 DJIA points, the market snapped back and ended up being only down -128.11.

The major markets, from around the world, were down 4 to 8 percent on Monday.  The US markets, after their holiday Monday, gapped down -500 to start the day on Tuesday.   During the next six hours, the market rallied and closed down -128.11.

The StoRSI, our momentum oscillator, has continued to come down for over a week. The StoRSI has hit its lower trigger level and could now turn around at any time.  Usually, issues traverse from top to bottom and back again….many times penetrating the upper and lower trigger levels.  Now that we have reached this oversold level, we can expect some type of rally in the near future. 

The T8, our exponential moving average, would provide terrific opportunities to sell. Although price came up toward the downtrending T8 on Tuesday, we are still a very long way away from the T8. What seems like a tall order for this market (the ability to rally back to the downtrending T8) might not be out of reach. Volatility rules and volatility could gyrate prices back to the downtrending T8. The T8 indicator dictates our thoughts on the direction of the trend. As the T8 begins to decline at a steeper angle, the T8 is even a more powerful resistance.

Tuesday’s candle was a big white candle, the opposite of last week’s black bodies which dominated last week’s trading.  The futures’ market stock indices all posted great looking hammers.  The hammers are exactly the type of candle you want to see at the bottom of a move.  We expect a “dead cat bounce” after this large downside move.

Please keep and mind and read the following thoughts on volatility. We have been preaching about volatility since August and we don’t believe that things will calm down for many, many months.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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DOW Directions 01-22-08 (Tuesday): A Daily Technical Analytical View of Stocks, Furtures, Eminis and Forex for online and day traders.

DIA (Dow ETF): World markets crash as Fed tries to save the day (week, month, year).

Capitulation definition: Webster’s defines capitulation as a giving up after offering resistance. In the markets: capitulation happens after the market has taken a beating and then, finally, there is a breathtaking directional bottom. 

 Certainly, the DJIA was headed to capitulation on Tuesday.  Major markets, from around the world, were down 4 to 8 percent on Monday.  The US markets were on a holiday Monday, but they were trading down over 500 points in the futures contracts before the Fed came in and cut rates by 3/4 of a point Tuesday morning.  This caused the market to rebound 300 points in early futures trading.  Prepare for Tuesday to be a memorable day on Wall Street.

The StoRSI, our momentum oscillator, has continued to come down for the past week.   Yet, the StoRSI still has room to drop. It has not reach its lower trigger level during this current slide to the downside.  Usually, issues traverse from top to bottom and back again….many times  penetrating the upper and lower trigger levels.  In this case, the StoRSI could put additional pressure on prices as the it slides to its lower trigger.

As stated: any rallies to the T8, our preferred exponential moving average, would be terrific opportunities to sell. Unfortunately, we are now a very long way away from the T8.  What seems like a tall order for this market (the ability to rally back to the downtrending T8) might not be out of reach.  Volatility rules and volatility could gyrate prices back to the downtrending T8.  The T8 indicator dictates our thoughts on the direction of the trend. As the T8 begins to decline at a steeper angle, the T8 is even a more powerful resistance.

Friday’s candle continued to feature black bodies and we see no particular features in the candles. The only distinguishing feature is that we continue to post negative, black candles…day after day. 

Please keep and mind and read the following thoughts on volatility. We have been preaching about volatility since August and we don’t believe that things will calm down for many, many months.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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DOW Directions 01-18-08 (Friday): A Daily Technical Analytical View of Stocks, Furtures, Eminis and Forex for online and day traders.

DIA (Dow ETF): C A P I T U L A T I O N?

Webster’s defines capitulation as a giving up after offering resistance.  In the markets:  capitulation happens after the market has taken a beating and then, finally, there is a breathtaking directional bottom.  After what seemed like a bottomless day, the market closed down over -300 points on Thursday.  This extended action to the downside could usher in a “dead cat bounce” … a rally that should be taken advantage of with short positions.

The StoRSI, our momentum oscillator, has continued to come down since Tuesday’s action caused an abrupt downturn.  Even with the possiblity of uspside, due to the punishing slide being overdone, we must be cautious knowing that the StoRSI still has room to drop.  If the market rallies or chops sideways, any approaches of price to the T8 should be shorted, regardless of the momentum oscillator’s position on the charts. 

As stated: any rallies to the T8, our preferred exponential moving average, would be terrific opportunities to sell. That seems like a tall order for this market (the ability to rally back to the downtrending T8). The T8 indicator dictates our thoughts on the direction of the trend. As the T8 begins to decline at a steeper angle, the T8 is even a more powerful resistance.   

Thursday’s candle was a  big, black ugly thing that gives no clue about direction.  It does say a lot about the potential, ongoing, weakness in the market.  Any time you can peel off 2 1/2% of the value of the index, it paints a ugly black candle. 

Please keep and mind and read the following thoughts on volatility.  We have been preaching about volatility since August and we don’t believe that things will calm down for many, many months.

***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 300+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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