Friday, July 10, 2009

My 2 favorite technical entry signals

I do NOT trade soley off technicals. I trade off what I feel + the charts.

What I am saying, is I am NOT a "pure chartist", I have to have my gut and the chart agree to enter. (which many times they dont, which means I dont trade!) There are some people I know who trade the chart only and use nothing else, they dont even watch or read the news at all, they dont even turn on the tv or read the newspaper, just pure chart and nothing else. (that is not me. I am like most others, all those are used to gauge when broad sentiment is too excessive or growing or waning)

(For those of you who have been reading my blog a while, you probably already know these, from a decent portion of calls)

But on the technical side, these are 2 of my favorite simple signals that make me much more prone to go enter the trade. (especially if my gut agrees). I look at alot more signals than just these, however these 2 are definatly at the TOP of the list.

Actually the way I enter almost every single trade is
#1. Select a stock that I "feel" should be at a higher or lower price
#2 Chart it and watch it and wait for a technical strong signal to enter in that direction

(if my text explination is sub-standard, :o)

1: An RSI failed backtest (to go short, I like alot this as a reversal signal)


2: A breakout from an RSI narrowing wedge, especially when the rsi also crosses >50 (or is >50 at the time of the wedge b/o (I use it for both long and short, but it's most beneficial as a continuation signal, to resume its prior trend)


**** The trades are all PAST TENSE, I do not share the same current sentiment on any of these 3, they are examples, I am neutral on the entire market currently short term.*****

My Current Sentiment: I am totally flat, 100% cash and neutral the entire market.
The charts to me to not have enough conviction to want to lean heavy either way short term
The feel to me says WAIT till a couple momentum stocks report and watch the TREND of their reactions to the ER.

Have a great weekend!
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