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Fractal Trade
  • Head and Shoulder formations on the indicies.
    Interim Head & Shoulders Forming???:  A look at bar charts for the SPY (daily, 2-day, 3-day) all show a POSSIBLE (not inevitable) Head and Shoulders formation forming.  The right shoulder has not yet started to form, but there is a good left shoulder and head pattern with a strong neckline (ca $103) already in place.

    IF A RIGHT SHOULDER FORMS followed by a threat of the $103 neckline in the near future (about another quarter worth of price activity), THEN by the end of the summer we will have a good idea of whether or not this market is planning to retrace significantly into the last year’s worth of price bounce.  If this does form a topping H&S, then the projection for the retracement will be ca $85.  That would be the range of Q2 2009 (ca $92/$82). 

    IF A RIGHT SHOULDER FAILS TO FORM then the market will build whatever base it needs to move forward into a new leg up.  It will be interesting to watch the unfolding of The Drama Of The Bulls and Bears.

    Disclosure: None currently
    Jun 18 3:27 PM | Link | Comment!
  • ISRG
    This one is high up on my watchlist.  The fundamentals of ISRG are outstanding.

    Its attributes include accelerating earnings, sales, and even earnings surprises the last couple of quarters, upward analyst revisions for the next quarter, solid annual earnings estimates for 2010 and 2011, high and increasing margins, solid ROE, excellent cash flow and no debt.

    The Medical sector is only behind Retail as a leading sector.  ISRG is the top-rated stock in the Medical-Systems/Equipment industry sub-group. 

    There seems to be strong support at the 200-day line.

    ISRG's action from the bear market low (March 2009) has been very impressive.  I would interpret the stock's current base as a first stage one.   Other interpretations are welcome.  There was talk last fall about an ascending base, but I can't see it.

    The stock hit new highs on low volume for weeks last November and December, yet kept plowing along until the current correction finally took it down.

    Notice the 5 "skyscrapers" on the weekly chart since the bottom, i.e., huge-volume weeks which tower above the surrounding weeks.  This is clear institutional buying.  Also, in the 15 months since the bottom ISRG shows only 2 distribution weeks - very impressive.

    In looking for a leading and potentially winning stock one question you should ask yourself is "do institutions have to own it".  In the case of ISRG the answer is clearly yes.  The company has a NEW product with almost no competition.  The stock has been a leader since the bear market bottom, and looks likely to continue its leadership role once this correction has run its course.

    Disclosure: No long/short positions at this time.
    Jun 09 10:52 AM | Link | Comment!
  • Marekts drifing further downwards.
    TODAY the Market drifted further toward Basing EQ as SO in Utilities dropped in our indicator and caused another slight tick down in the overall average of the components of the three DJ indices (DJ 30, 20 & 15 = DJ65).  The significance of today’s slight down tick in the overall average is that the fractional value of today’s reading created the possibility of rounding the whole value downward further to the lowest Support reading for our indicator.  IN OTHER WORDS, the market (in DJ65 terms) is now BARELY SUPPORTIVE as a whole,  ALTHOUGH Transports are still tenaciously holding onto their fairly-strong Supportive indication (!!!).  So then, today was a significant move down in technical value for the overall market.  This implies that the short-term downward momentum is threatening to further reduce the Supportive thrust of the last year. 

    We may be in for a long summer of drift as the market seeks a true Price-Related Bottom. 

    Disclosure: No current positions.
    Jun 02 10:53 AM | Link | Comment!
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Latest Followers


  • Its been a great run so far in the latest uptrend. I'm sure now all the Canslimmers will begin buying.
    Nov 4, 2011
  • After several up days a pull back should be expected.
    Oct 31, 2011
  • . But a bottom was hit just before lunchtime in New York, and buyers dominated from there.
    Oct 26, 2011
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