Higher
high again, but will it be the end of the
uptrend?
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Before I start into this Newsletter discussion, I thought I'd answer a question that a few folks have sent me. That is" Why do I always have my educational CD listed as the last thing on the newsletter? Answer: It is really very simple. First, I want to pass on a tip or two that I think may cause you to stop and think about your trading, next I want to let you know about the tools I use everyday and how you can get them. Finally, If you made it all the way to the end of the Newsletter then you are probably interested in improving your skills. So the last thing I want you to remember is to check out my CD. Its priced at $249 but its worth thousands when compared to what others are charging for education. So if you want to look it over before reading the newsletter just click the Tradingourway CD or checkout the FREE RT-Alerts or even the Worden Products And
now on to the real
reason we send this Newsletter out.
A few week ago, I said we may very well be the top based on my Elliott wave software. We now know it wasn't the top but we did get a shallow pullback. We made a higher low and followed with a higher high. That , of course, is the very definition of an uptrend. Where will it end? Quite frankly, I do not know but like all self-proclaimed GURU's I have a guess, that is an educated guess based on Elliott wave. For whatever that is worth. On the StockFinder daily chart (taken intraday) below I added the ZigZag indicator and marked the percentage for each leg up and down over the last few months. I manually calculated and added the percentage for each leg in order to illustrate the strength of the uptrend. I, also, have on the chart Wilder's ADX along with the +DI and -DI which Wilder uses to identify the trend. These work very well together to identify the trend except it does create excessive crossovers as shown by the yellow circles. As with any indicator it is important that you define your trading time frame and adjust the indicator to the appropriate setting. Wilder recommended a 14 bar period. As he did with almost all of his indicator. His reasoning was that it was one half of his trading cycle. Remember, he created these indicator in 1978 and the only trading then was much longer term than today's crazy markets. I, also, added my own simple "Trend" indicator that tells me, based on my time frame, if the market is in an uptrend or downtrend. At the present, I do not identify a "No trending" market. Future implementation, maybe. My trend indicator keeps me from getting out of trades and then having to get back in.  So the short term outlook is for more upside. I would not consider shorting this market just yet. But, what about the longer outlook. For that we need to look at the weekly chart. Below is a weekly DJ-30 chart from my AdvancedGet software. The blue line just below the 11,000 is an area of very strong resistance. Based on the Elliott Wave theory the best "Guess" is that we are in a 5 wave down pattern and that we are presently in a bear market rally or a corrective wave 4. I have noted and circled the GET Wave 4 channel bands (blue, Green and Red). The significants of these bands is another indication of how likely the wave 5 will create a new low . Thus taking out the wave 3 low that occurred in March 20009. If the rally stays below the Blue channel there is an 80% chance of a new low in wave 5, If the rally stays below the green channel there is an 60% chance of a new low in wave 5 but If the rally goes above the red channel there is a very slim chance of a new low in wave 5. You can see we are well above the Red channel which is just another indication we are in a strong uptrend. So if you are like me and subscribes to the theory that price tends to go to the next major moving average then the 200 SMA would be the target. That would make the 11,200 area our potential upside target. However, keep in mind the weekly chart below is telling us that our old support/resistance is 10,800 to 11,000 area.  Best we not forget to protect the downside. One of the best tools I have found for that is Worden Brother's FreeStockCharts and the Volatility stop. As you can see in the chart below when you use the trend lines and the Volatility stop it works very well. Maybe someday Worden's will put it all in one tool for us.  Once again, this "GURU" is not telling you this is a top. I'm just telling you to be aware that it "might" be. So tighten your stops and get ready for a pullback. I think the above charts demonstrate very well why one needs more than one charting tool. |
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Ramp
Real-Time alerts now Available FREE
with the Bronze Membership 
As you know I am a big fan and user of the RAMP program and I promised
you that when Andy Skinner of www.nebadawn.com
had his RAMP Real-Time alerts working that I would let you
know.
Subject:
New
Ramp
RT-Alerts Free Bronze Membership You
can now install the new
RT-Alerts Real Time Chart Pattern Recognition Program and run it
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free to find intra day major support line touches on daily and weekly
charts. This is the new Bronze membership level.
There is no
obligation. Just install
RT-Alerts,
leave the user name and password blank, and enjoy the intra day
notifications of great support line touch trade setups. You
can even have
the alerts sent to your email or text messaging service the instant
support
lines are touched. Also
check out new lower
pricing on our new Silver
and Gold membership levels. If you are a current
member, your cost
has already been automatically reduced.
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| Worden Brothers Telechart and StockFinder software | ||
 
I
mentioned before that I had been studying and creating new trade
strategies using Worden
Brothers' StockFinder Well I am
getting a lot better with it . Like anything
there is a learning curve.
If you are a new user or are already a Telechart or StockFinder user you can take advantage of the sale price. I can't recall ever seeing Telechart or StockFinder priced this low. I think what really makes this a great deal is you can get StockFinder for an additional $10 a month with Telechart. It is listed as the Gold Suite or Platinum (Real-time) on the order and Pricing page NOTE: The best pricing is when you pay annually. If you let me know when you purchase either or both and I will glad to provide you assistance with the products. Send me an email at Kermitp@tradingourway.com and give me your user name. If you want to talk one on one about the products or any other subject include your phone number and a best time to talk.
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Summary:
As you can tell I don't spend a great deal of time trying to make these newsletters look pretty. I'd rather concentrate on having useful content. As always I want to hear your thoughts on these and any subjects. Please, feel free to send an email with your suggestions, complaints, and comments to kermitp@tradingourway.com Thank You, for taking the time to read our newsletter and good trading to all, Kermit Prather |
