Tuesday, October 17, 2006
Follow-up: INDU & RSI
Following up on
prior post. The early action pushed the INDU hard into a mid-day reversal. (See inset on image) During that flush, "classic" RSI pushed thru the first (Oct 17th) trendline, into the next one down, and almost tagged the "Bump" line.
The midday reversal canceled all that and the close was on the second (Oct 20th) trendline. Notice that the fisherized RSI didn't make a perceptible budge.
So...still in strength, reaction down is still positively divergent (ie, pullback not full blown reversal).
Labels: chart-analysis, indicators, RSI
Tuesday, January 27, 2004
Simple Trend Trading: Fibonacci, MACD, STO, RSI
There's quite a bit on this chart, some for targeting, some for learning.
(A) In addition to yesterday's lesson on the Regression Channel to gauge pullbacks, Fibonacci retracements are also helpful. While NOT A RULE, a move off the 38.2 is strong, a move off 50 at times results in sluggish/congestion, and a move below 62 is often weak.
(B) I've arranged the indicators in an order of priority:
(1) Chose a sufficiently long MA (34ema) for direction and a shorter MA (13ema here) for early indication of either trend change or pullback entry opportunity. Other popular combos are 5/25, 9/18, 9/30, 8/13, etc. Suit your style.
(2) MACD-- This is a trend indicator: strong above Zero, weak below Zero, as I've often written about. 'Divergences' on MACD can be deceptive. When the long (34) MA is UP, the lower MACD 'divergence' is often a 'wind-up', ie, a pullback.
(3) STO -- Not always my favorite as it is very misused and misinterpreted. Best to USE IT WITH THE TREND, ie, a reversal out of oversold when the long (34) MA is UP is a decent buy. One could use it reversing out of overbot in an uptrend as an exit, but you may leave $$ on the table or churn up commissions. Experiment and find your own comfort zone.
(4) RSI -- A favorite of mine, used largely for setting price targets from divergences. The channel zones indicated (45-80 and 35-60) are only rough, draw them in for each market and time.
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Labels: indicators, RSI
Monday, December 08, 2003
Monday: +RSI Reversal is getting fulfilled
Shown below is today's 60min chart, which shows the +RSI Reversal being fulfilled. It targets 1075.4, but there are reasons to suspect 1071 may be all it yields:
(1) CCI entered overbot (not bearish yet, but did it too quickly;
(2) MACD is reversing, but sub-zero (can be a weak bullish signal)
(3) Relatively low participation in the bullish move suggests it may not be sustainable.
FOMC meets tomorrow with minutes released on Thursday, both of which may be a sufficient catalyst for some more selling. This is a speculative scenario, so as always, it's best to watch what price DOES not what one thinks.
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Labels: chart-analysis, indicators, RSI
