Saturday, December 06, 2008

The Trading Range Continues In The Dow Jones Industrials

The trading range continues in the Dow Jones Industrials which is why I haven't taken a trade in any of the stock indices for the past 2 months. It feels like the market is trying to rally here and I think we'll see the indices test their 50 day moving averages. These averages will be a key area to watch because the seasonal tendency for this time of year is bullish so I am on the lookout for any signs of seasonal strength. So far all I see is a powerful bear who has taken control of this market so let the buyer beware!


Tim Chen said...

What's your favorite combination of indicators to trading?

Kevin said...

My favorite indicator is the stochastics ... I like to combine the stochastics with a moving average which keeps me on the right side of the trend.

Benjamin Lee said...

Hi Kevin,
Do you guys use any other market timing or projection methods in your trading?

Kevin said...

Yes....I like to use cycles and price patterns.

Benjamin Lee said...

My personal favorites would be chart pattern, fibonacci, gann, elliott. Very valuable tools.

Kishore said...

Hello Kevin
I am reading your detailed discussions on ATR, (published long time back). In the posting, "on a stop" phrase is appearing quite often. like the following -
"Exit at the highest high since entry minus 3 ATR on a stop."

Can you please explain what does "on a stop" mean? An example with respect to the above statement will be very helpful.

Thanks a bunch.


Kevin said...

Hello Kishore,

A stop is another word for market order but only when a certain price is reached. For example, lets say the stock is trading 62.10 and you would like to buy this stock only if the stock rallies above resistance which may be at 62.25. You would then place an order to buy this stock at 62.30 on a stop. This means if the stock rallies to 62.30, you will then buy the stock at the market.


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