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Chart Swing Trader
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Hi, I am a 33 year old part-time trader that started this website as a way to improving my skills as a trader and also sharing my thoughts on the market. I am a follower of the CANSLIM method of investing developed by William O'Neil, founder of Investor's Business Daily. I have adapted this... More
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  • State of the Stock Market - 9/1/10
    A very bullish session today on Wall Street, as stocks started the day significantly higher and build from that open to establish large gains of almost 3% by the time the market closed.   The intraday action was actually slow for most of the day, as stocks just moved sideways from about 10:30 on, but nonetheless the gains along with an increase in volume qualify this as a follow-through day that puts the market back in rally mode.   As always, that doesn't guarantee anything, but it is certainly a plus.

    Technically, key resistance was quickly dealt with today by the bulls, taking us out of the week and a half long trading range we've been in on the Nasdaq and S&P.   That certainly bodes well for higher prices over the next few weeks.   One thing I will point out, however, is that the S&P stopped right at its 50 day moving average today around 1080.   It would be a little different if the market rose steadily throughout the day and closed right there, but the fact that we rose quickly to that level and then went no further could be meaningful.   Perhaps this resistance will take a few days to get through.   The Nasdaq did the same with its 20 day moving average around 2177 - got to it and then just sat there.   A little rest here is not a bad thing if it happens and doesn't mean today's move won't work. 


     Charts from Telechart, Courtesy of Worden Brothers, Inc.

    I don't know if it is just me, but my volume totals are extremely weird today with Telechart.   It shows volume on the S&P as being the highest of the year and more than twice as high as yesterday.   Meanwhile, it shows the Nasdaq as having heavier volume today but not anywhere near as heavy as the S&P.   It also shows volume on the Dow coming in less than yesterday's totals.   Maybe this will clear up later, but it is confusing me right now.

    As for the gameplan, I remain in cash as of now as only one of my two main indicators for breadth turned bullish today.   However, the other will likely turn bullish soon (baring a big collapse here), so my outlook is to look to buy as opportunities present themselves.   I have no way of knowing if this is just going to be another fake-out that does nothing more than keep us in our trading range, but the signals are there so I have to go with it.   I have three or four names that I am watching closely and may enter a few positions tomorrow.   There are a lot of leading stocks acting very well right now(ISLN, NFLX, CRM, CMG), and that is another positive sign.   I will be going over my scans closely tonight to find others that may work if the market decides it wants to move higher.   As of now, that's what it seems to be saying, so you must respect it.  Good luck Thursday. 
    Tags: SPY, ISLN, CRM, CMG, NFLX
    Sep 01 4:53 PM | Link | Comment!
  • State of the Stock Market - 8/31/10
    We saw another day of volatile action today on Wall Street, but unfortunately the trend of going nowhere continued as the markets ended the day flat.   The day started out poorly with the S&P and Nasdaq once again testing the bottom levels of their current range, but those held once again and stocks bounced sharply mid-morning.   They reached their highs soon after, moving sideways through lunch, falling back after lunch, and bouncing slightly into the close.   The Nasdaq closed slightly lower and the S&P was flat overall, with volume coming in higher than yesterday's totals.  

    Technically, we just keep forming this range here and what is interesting to me is that we are either testing the top or bottom of the range almost every single day for the last two weeks, and as that happens, that range becomes stronger and stronger.   It seems like it will take a lot of effort for the bulls to get us over 1067-1069 and 2155-2160, and it will take a lot of effort for the bears to get us below 1040 and 2100.  

    One thing to watch over the next few days is that the 9 day moving average has moved below the top of this range and could provide an early clue as whether we will breakout or breakdown from this range.   For the Nasdaq, it is currently around 2144 and for the S&P, it is currently around 1060.   A move above this level for me would mean a breakout above the top of this range is likely.   Another test and failure of this moving average would mean we are much more likely to breakdown from this range.

    Charts from Telechart, Courtesy of Worden Brothers, Inc.

    Since we haven't really gone anywhere the past week or so, there really isn't much to do as a swing trader.   I would rather wait for the breakout or breakdown to come rather than guess which one will occur.   So for me, cash is good at this moment and I'll be ready to go when the range is broken.   I am still expecting lower prices and am leaning that way, but we'll see what happens.   Take care and good luck Wednesday.
    Tags: SPY
    Aug 31 4:26 PM | Link | Comment!
  • State of the Stock Market - 8/30/10
    Not a very good day today on Wall Street, as former support continued to act as resistance and stocks fell from the opening bell and stairstepped their way lower throughout the session.  Volume looks extremely light and it looks like the summer trading doldrums are here for at least a few more days.

    Technically, we continue to establish a new trading range here, with the key being this range remains under the support from previous weeks.   I discussed this in the weekend video - until the market gets above these former support levels (again, 1067-1069 on the S&P and 2155-2160 on the Nasdaq) there is not much reason in my opinion to get bullish.   The 9 day moving average continued to hold stocks down today as well.  If a breakout above these levels comes soon, then it could potentially be bullish, but right now the past week looks like a choppy, bearish consolidation pattern to me.  

     Chart from Telechart, Courtesy of Worden Brothers, Inc.

    I personally would not mind another day or two of low-volume, slower action within this range, and perhaps one more test of the upper levels, as I am starting to see some shorts setup in my scans today.  If the market can move back into overbought territory this week without breaking out, I will be looking to act on some of those shorts.   IF we happen to get above this range, I will reevaluate things, but remember, there is several layers of resistance above 1067 and 2155 as well, so it's not like things will be easy for the bulls.  

    We may get a positive bounceback tomorrow with end of month window dressing, but the longer we stay in this area without moving higher, the more likely it is in my opinion that the market breaks last week's lows and tests its July lows.   That's what I am expecting as of now, but if things change, so will I.   Good luck Tuesday.  
    Tags: SPY
    Aug 30 3:49 PM | Link | Comment!
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