As I get a better understanding of chart patterns, I see more and more trading opportunities. I thought it would be a good idea to document some of my ideas, to see if I can improve my predictions.
I am looking at this short position for Monday, April 21, 2014. It may be a coincidence, but the market always seems to be up just before a holiday weekend. The following week will tell me if I was correct or not.
Here is my idea to short SPY. The market has been on an uptrend, but temporarily on a down trend. See how it went down in February, and then just kept going up. That's why the idea to be short is temporary. In general, it is a good idea to follow the market, and stay long for the long term, but there could be some quick opportunities, if you know when to get in and out. I don't think the indexes are as good for shorting as individual stocks, but I like what is developing on the charts.
Notice that the index breaks down as it tests the support level (blue line) for the third time, and then comes right back up to the resistance (green line).
I think it will not stay around $187 for more than a few days, at most. Then it should be down to my first target of $181.50 within a few days.
I made a few notes on the chart, that seem to support my thesis, but we'll have to wait and see, won't we?
Here is the daily chart of SPY for Apr 17, 2014. Notice the price and volume action at the close.
This is close to what I was expecting. The intraday action was forming something similar to a shooting star, where it opened near the previous close, shot up, and then headed back down in high volume. It didn't close as low as I had hoped, but we may not be at the top of the resistance level yet. I think it will be there in a few days.
My idea is to be short for the next pull back, then look for a chance to get long.
I tend to be most successful with long term investments, where I don't have to be concerned with a few price fluctuations. This type of short term trading is more risky, so be careful to use a small percent of your portfolio to trade for the short term vs. a larger amount to invest for the long term. I started late, so I am looking for ways to improve my tiny retirement portfolio.
Disclaimer: I may be holding some of the positions I discuss, so this information is not meant to be a recommendation to buy or sell anything. It is more of a log for me to see how my trades have gone. The charts are from freestockcharts.com, which I find very useful
I am looking at this short position for Monday, April 21, 2014. It may be a coincidence, but the market always seems to be up just before a holiday weekend. The following week will tell me if I was correct or not.
Here is my idea to short SPY. The market has been on an uptrend, but temporarily on a down trend. See how it went down in February, and then just kept going up. That's why the idea to be short is temporary. In general, it is a good idea to follow the market, and stay long for the long term, but there could be some quick opportunities, if you know when to get in and out. I don't think the indexes are as good for shorting as individual stocks, but I like what is developing on the charts.
Notice that the index breaks down as it tests the support level (blue line) for the third time, and then comes right back up to the resistance (green line).
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| SPY 1 Month, Daily Chart for April 17, 2014 (click chart to enlarge) |
I made a few notes on the chart, that seem to support my thesis, but we'll have to wait and see, won't we?
Here is the daily chart of SPY for Apr 17, 2014. Notice the price and volume action at the close.
This is close to what I was expecting. The intraday action was forming something similar to a shooting star, where it opened near the previous close, shot up, and then headed back down in high volume. It didn't close as low as I had hoped, but we may not be at the top of the resistance level yet. I think it will be there in a few days.
My idea is to be short for the next pull back, then look for a chance to get long.
I tend to be most successful with long term investments, where I don't have to be concerned with a few price fluctuations. This type of short term trading is more risky, so be careful to use a small percent of your portfolio to trade for the short term vs. a larger amount to invest for the long term. I started late, so I am looking for ways to improve my tiny retirement portfolio.
Disclaimer: I may be holding some of the positions I discuss, so this information is not meant to be a recommendation to buy or sell anything. It is more of a log for me to see how my trades have gone. The charts are from freestockcharts.com, which I find very useful
, by Robert T. Kiyosaki
, by Joel Greenblatt
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