Seeking Alpha

Jeff Pierce's  Instablog

Jeff Pierce
Send Message
I’m a swing trader of momentum stocks with a holding period of anywhere from a few hours to a few months. I run a number of screens to locate the strongest/weakest stocks out there, using technical analysis to determine my entries and exits. Trying to calculate the intrinsic value of stocks in... More
My company:
tradewithZEN
My blog:
zentrader.ca
  • Initial Resistance Levels Tagged 0 comments
    Aug 19, 2012 6:51 PM | about stocks: DIA, SPY, QQQ

    By All About Trends

    Friday we said:

    "Trend channel support is 40 to 60 points lower on the S&P 500 so we could easily come down there and bounce right back up. Keep in mind tops are a process,not an exact. Look at the market top of March 2012. It chewed around there for about 2-3 weeks before giving way (SPX). And even then it came back to the scene of the crime a month later. The question is will we stage a chewing around topping process here (blue circles on the daily index charts) or just fall like a rock. If we are going to fall like a rock it's probably going to be some news driven event out of the EU or something."

    (click to enlarge)

    (click to enlarge)

    (click to enlarge)

    Don't get us wrong here, we could just as easily have started topping here too, but lets look at what's worked best for us over the years - that being support, resistance and trend channels. But for now don't kid yourself this is late summer, low volume, most traders on vacation, complacency trade environment that is not optimal for trading.

    To sum it up, let's hone in on what to do with a much needed pullback and should the market fall like a rock we're positioned for that as well. The blue and green lines in the daily charts above are what we want to key in on here as they are support. Currently we're nowhere near them so now is not the time to chase stocks. Given they are support, we'll have to honor them baring any humpty dumpty news out of the EU.

    When and if we get there? We look at our shorts and see if we should be covering, and we also look at who do we want to pick up on the long side at that moment in time, but not now. Should we need to adjust in order to maintain flexibility with the markets, we'll do what's needed to protect our subscribers.

    The following is an excerpt from this weekend's premium update by All About Trends. Subscribers receive daily commentary and a weekend wrap-up. I personally recommend their service for their accurate market analysis, trading methodology, and stock selection. Zentrader readers receive a 33% discount with no time commitment.

    Stocks: DIA, SPY, QQQ
Back To Jeff Pierce's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.