Memorial Archives

Things That Make You Go Hmm
posted Jul 12, 2004 at 11:33PM

A very interesting analysis put by Sol Palha that I think is worth reading can be found HERE

On the basis of that article I decided to look at some charts I haven't been keeping up with.

Is this market getting geared to rally? Hard to believe but a scenario to be aware of. Guess I might have to put some techs back on on my watchlist

The Importance of Market Depth

Since the start of the year, most of my trades have the short term main problem is not finding charts that look good...but finding a chart that looks good with some decent bid support..i.e. market depth to go along has been much harder.

Monday morning was a classic example. Sunday night I was doing some stock strolling and one chart that I thought looked interesting is shown below

Here we have marginal lows accompanied by positive divergences even a dragon fly doji... a set-up that has really worked well for me over the last year

But this AM when I looked at the market depth..same old was just YUK...lots of supply..weak on the bids. Sure enough when I checked on it later in the day...

Again..charts and TA alone do not make a trading system...and given that I am a closet deflationist I am finding the lack of bid support for speculative type stocks is just another warning sign that liquidity is drying up

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