The "top out" pattern has been the setup of choice for the past quarter, for obvious reasons. To me the classic top out pattern is long upper-tails forming on the fourth and fifth bars, but failing to close above the OR (opening range) high. The smaller the real-body and closer to the actual OR hi ... Read more

I was looking at charts this morning, and a few key levels to note on the Dow are: The Fibonacci Extension (FE) of 2008's high/low: 5222.26 (seems scary and impossible, but who thought we would be under 7000 6600?) The halfway point between 2008's low and the FE: 6335.82 (just a stone's throw ... Read more

There were some good trades this morning. I just closed my last open position for ~5% gain (HOTT, a "top out" pattern). I will post some charts this weekend. This may be the most amazing video I have ever posted. Regardless of your feelings on Rick Santelli's now famous rant, watch this video to s ... Read more

Last week I did a "Quick and dirty analysis" of the Dow. Readers seemed to enjoy it, so this week I thought I would take a look at AIG. I am still trying to wrap my head around a 4th Quarter Loss of $62 BILLION (which - as you can guess - is the single largest quarterly loss in history). And o ... Read more

First, thanks to Tom C. for an informative post on the "u-turn" setup. Next, RJ's daughter sent me an email and said she downloaded all the comments (no Internet access in the hospital) and read them to her father, and they both appreciated it very much. We are close to 40 comments - I hope we c ... Read more

posted by Tom C. Trader-X has mentioned the "u-turn" setup several times over the past week and given me more credit than I deserve for it. I want to point out a few things: 1.) It works best on a gap up. Why? Because price is usually falling into - and making the "u-turn" on - support from the ... Read more

All- As we go into the weekend I wanted everyone to send out positive thoughts to RJ. RJ has been a frequent contributor in "Comments" for years, and he is always there to answer questions and lend a helping hand. He has faced some health problems in the past and fought them into remission. Unfo ... Read more

Promoted from "Comments" Doug wrote the following in "Comments" of the last post: "X, the "push through" setup works on the 15 minute charts too. I know you don't trade that timeframe, but STT was a great setup and my target was the fibonacci extension of yesterday's low to the high of the first ... Read more

I was talking to someone today, and one thing I am realizing is that people do not understand the severity of the decline/correction we are going through. It is easy to look at the Dow chart I posted a dozen times over the past six months and say "well, we are back at 2002/2003 lows". True, but to ... Read more

MVL was discussed in "Comments" yesterday. I traded MVL on the long side...here was my rationale: 1.) The first bar closed green and above the 50% retracement of its range. 2.) The second bar was a "fill in the tail" pattern that closed above the halfway point between the 50% retracement and the ... Read more