Keep An Eye On These Stocks
After Wednesday’s late
day surge the markets appeared to take a breather albeit not giving
up anything from the day before. A few attempts to breach Wednesday’s highs
were tried early on, but were offered on each occasion. All in all (I hate to
say this) a relatively quiet day. As of this morning here is where we stand
from a technical standpoint:
S&P’s:Â Â Â
1112 (bull trend line from Aug ’03, solid resistance)
               1101 (Wave low in March)
               1104 (Bear trend line from early
May)Â
Technically Wednesday’s late day performance was
impressive. However, the daily chart is still rather bearish. Solid action
will need to develop in order for these resistance levels of above to be taken
out. Â
Depending on which way the market decides to
direct itself today, you may want to keep an eye on these stocks as intra-day
plays. These are not HVT stocks per se, rather they should be viewed as
intra-day Swing Trades.
^next^
Longs:Â Â Â
Analog Devices (ADI)
Avon Products (AVP)
Shorts:
Clear Channel Communications (CCU)
Chico’s (CHS)
Centex (CTX)
Dow Chemical (DOW)
Lowes (LOW)
National Semiconductor (NSM)
Omnicom (OMC)
Bank One (ONE)
FX (Forex)
If you need to see an illustration next to the
definition of the word “patience”, simply turn your attention to the 60-minute
charts of the EUR,
GBP and AUD at present. A
range-bound market that is just ripe for some action. Unlike
HVT, FX is a game that is better suited to
Swing and Position Trading. The result of course is far fewer trades and
periods where you simply need to get yourself comfortable.
Nonetheless, if you are diligent in your analysis
and take mental and actual notes while this pattern develops, you will be
surprised to see just how many clues can be had. The easy part is identifying
the technical levels which the market “may” respond to, pulling the trigger is
the hard part. Reacting to break of a level is much like the ever popular but
rarely successful break-out trade. The best entries come to those who
anticipate these breaks..ahead of everyone else.
It is impossible to do that if you are looking at
a couple dozen currency pairs. For the most part, the EUR, GBP and to a lesser
extent the AUD are the most “tradable” pairs in my opinion. My trade logs prove
this, for me at least. The pairs where I have the highest win/loss ratios as
well as a lopsided edge in terms of pips gained vs. pips lost per trade is also
in these three pairs. To me, that makes my life easier, only needing to focus
on three pairs gives me a huge advantage. The other benefit, just like in HVT,
is that you gain an insight that is somewhat intangible by looking at the same
charts each and every day.
With that in mind, let’s review what I am seeing
presently in FX.
EUR:Â
1.1840 (Fib level, resistance)
           1.1860 (bear trend line)
         1.1760 (Wave low from mid-April), a
break of this should allow for a test of 1.1670
GBP:Â
1.7566 (Fib level, resistance)
         1.7510 (200 day EMA)
The CPI Number came in 0.1% below expectations of
0.3%, this appears to have been enough to knock the Dollar lower in yet another
knee-jerk reaction in the FX markets.
As always, feel free to send me your comments and
questions.
Dave