Here’s A Way To Be ‘Street Smart’
In this day and age of ‘fast
money.’
you’ll often find that classic tests and
patterns typically break tradition with the examples that you often find in
textbooks of days gone by. Most often, if ‘you’ know about the
stock, there’s going to be some ruthless competition to keep the stock away from
any weak holders before ‘the move’ takes place.
What this means is that
shakeouts and probes that ‘just’ destroy the textbook support or resistance
lines often take place in the real world of trading, as ‘fast money’ and/or weak
holders decide to call it a day with stops that are easy targets for market
makers and specialists.
Sometimes, of course, the ‘break from tradition’ is the
real deal, and as the stock changes character you have to be quick to act in the
other direction. More often than not though, the real move has still yet to
happen, so try to stay ‘Street Smart’ and look for that entry after the easy
money has been burned.
10:47:55
Intraday Setup Alert
Interactive Corp (IACI)
gapped lower in today’s trade, moving below key daily chart price supports–down
1.09 at 31.16. The intraday action has the stock putting in a weakening
symmetrical
triangle pattern on the 5-minute chart (see attached). Triggers for short
continuation plays are currently set below pattern supports of 31.
Think of it this way, ‘if they can, they will’–
but just because it doesn’t look perfect (after an attempt to shake out weaker
holders, long or short), don’t discard an entry just because a line was broken.
If the original pattern’s intent is still in place, it probably still makes
‘cents.’