The Beauty of Technical Analysis - A short review

The Beauty of Technical Analysis - A short review of last March's rally


As you may already know, last March we also got a nice rally. Below is the chart of last March's up wave.

The two lines are drawn last June. The yellow line is the warning line. That means when it is broken, bulls should be alert. The black line is the Bull's life line. It means bulls should change to bears when it is broken.

And this March, we got another rally again, but much better rally. Isn't it ? The chart is posted below.

Now it is the time to look back at the black line, the life line of bulls, since it is already 1 year now. It is amazingly remarkable ? Isn't it ? At the black line, if you shorted the market then, you have won all the time down to this March, and even now.

So Technical analysis is amazing ! It really helps us to trade well !

By the way, do you think the time for this year's rally starts again in March is predictable ?

I think it should be predictable, at least last March's rally gives us some clues and alerts !

I have read many trading books and technical analysis books to date. And I feel really benefited from them, especially reviewing them very often after some real tradings can refresh and enhance my understanding of the chart and market behaviors.

History will repeat again, and again, even though every time there are some differences. The major parts are very similar.

If you are interested in learning more on the trading and investment. Here is a list of books, in my own opinion, worthy reading !

I will keep the reading list updated once I find more good books.

All right

All right, even though there is a nice reversal during the day, the NASDAQ still closed down, as predicted this morning.

In addition, the NASDAQ is below the magic green line for 5 days now.

PPCO hits 2.50 today. Up almost 25% since the call.

ETFC becomes crazy, up 18.67% today.

CLFD up more than 50% since it appeared on our 10 bagger list.

Great day. Isn't it ?

A nice intra-day reversal

A nice intra-day reversal !

The financial sector is pretty strong today.

ETFC up ~15%.

BAC up ~ 7%

But I still think NASDAQ will close down today, as predicted this morning.

A down day today

A down day today !

As mentioned last night, the magic green line has kept the bulls under 4 days, today will be the 5th day.

Euro hitted a high, then a big down last night and now is about 1.39.

Oil is around 70. Gold ~ 939.

Shang Hai index down ~1.9%, and all European stock markets are down now.

Fortunately, we forcasted this morning's gap down correctly. Hope you have taken some profits yesterday, or set up some short positions yesterday.

Based on the moving pattern of QID this morning, I feel that yesterday 's 1,879.92 of NASDAQ may be a top/high for some time. More confirmations will be developed and posted here.

The magic green line

The magic green line has successfully kept the bulls under for 4 days so far ! What a magic line we have drawn !

The first time we showed this line is here, about one week ago. Just after the 3-levels of support for the bulls are presented in the blog.

Later, we presented that the magic line is broken. Since then, we predicted that this magic line becomes a major resistance of the bulls.

Last night, we moved forward and said the bulls need to break out this magic line in order to achieve a home run !

Today, The bulls failed again to break out the magic line. Moreover, it seems the magic line is becoming further away from the market close.

As a result, today we make another important prediction. Please remember this since it will be very important.

Here is the important prediction: The Market will find the top when it touches the magic green line but failed to break out it.

That's the way to spot the market top just based on chart. I am glad to be able to share with you and sincerely hope you can understand it well.

Finally, today a new high is printed, so it is a pivot day.

Ok. I think that's all for today. Tomorrow will be another day. Every time is different, every day is different as well.

what a wonderful day for bulls !

what a wonderful day for bulls !

Now look at it back, my this morning's market sentence makes more sense now.

I still expect the market closed up today.

Once QLD breaks out 40, it will run to 41.

Only 20 points away from 1900 today, isn't it nice ?

More analysis later !!!

Very nice day. Yes, it really is.

so far so good

so far so good

Bulls are back today

Bulls are back today, and today could be a good day for bulls. That's my view on the U.S.A. stock market this morning.

Not like past days, today may be a well trended day.

Euro is ~ 1.40 now, a new up trend is formed.

Oil is above 71 now. Gold is ~946.

Shang Hai's index down 1.12%. But European stock markets are all up now.

What's the target for both bears and bulls ?

What's the target for both bears and bulls ?

That's a key question I try to answer tonight, just based on the chart.

First of all, since we mentioned the broken of the first support level (the green line in the chart) Monday, this line has become a key life line for the battle between the bulls and the bears.

So far the bears have successfully kept bulls below this line. Unless the bulls become crazy again, this line seems hard to get back by bulls. That's why I called a broken out of this green line is really needed by the bulls for a nice home run.

So far, the bulls have retreated 3 days from the green line. Do you think the bulls are tired now ? In my opinion, I think such retreat is very good for the bulls. A broken out of the green line is very expectable. Once broken out the green line, the bulls target will be the red line as marked in the chart.

My years' chart reading experience told me that the correction before the important broken out will always help out the breakout and will always lead to a successful brokenout.

Another important thing, I think I should mention here, is that the ~10 MA is today's low and the ~5 MA is today's market close. It's not accomplished by chance. It is so because these levels are very important levels, and many traders are watching them.

On the other hand, if the bears keep the green line well from the touch of bulls, bears will push the market down to test the support of 1770, which is marked as a key support about 10 days ago in this blog. It is also plotted as a black line in the chart.

More fun are coming ! Enjoy !

A great day

A great day !

Really, it is.

Not only for bears, but also for bulls.

JASO continues UP.

Euro bounced back finally. But the stock market still closed down, as predicted this morning.

More analysis tonight.

Three best ways to trade stocks

Three best ways to trade stocks, in my own opinion, among many trading methods.

1. Breakout play

• Safe, quick, and nice profit
• You have to wait until the right moment to get in

2. Value play

• Safe, and higher profits, may be a 10 bagger
• Need good insight and patience

3. Day trading play

• Safe, quick profit
• Time consuming, need good market sense for a short term

So, I think a mix of the three ways mentioned above is a good strategy, namely, using around 1/3 of your trading cash for each.

Even in bear market, these methods still work well. You can apply them to the inverse index ETFs as well.

Will yesterday's history repeat today ?

Will yesterday's history repeat today ?

Yesterday, the market gapped up, running down and then completed an intra-day reversal, at the end of the day closed with small gains.

Do you think today will repeat yesterday's history ?

So far, the Nasdaq is very weak. Not like yesterday. So I guess today will not repeat yesterday's story.

Euro is about 1.40 now. Oil is above 71 and gold is above 963.

JASO made a new higher high today. Congratulations to those who are riding up now.

Bulls need to break out for a home run

Bulls need to break out for a home run.

As shown in today's NASDAQ daily chart, as well as previous daily charts. The three supprot levels for bulls, which is presented last week in the blog, so far works pretty well. As long as these levels holds, the bullish trend will be safe.

As mentioned last night, the first level of support was broken yesterday, and today, the bulls have not brouht it back, as shown in the chart. This is not good for the bulls. However, today the next two levels of support for bulls performed very well.

Last week, we have called NASDAQ 1900 soon ? So far, it seems very expectable, especially if the anticipated breakout is successful.

Remember, bulls never die if the bears are still around !

A very nice intra-day reversal

A very nice intra-day reversal, as predicted this morning.

Euro seems crazy now, about 1.41 high now. My goodness.

It seems QID will test 30 now.

JASO, after breaking out, is in the consolidation stage now.

FAZ may break down 4 any time. Our predicted target is $2. Hope it can be completed.

Nice day ! Very nice, actually. The day is working very well.

JASO broken out

I hope you guys who have followed my blog very closely, already in JASO and enjoy the riding UP now.

But now don't chase it since the risk is high. If you are already in, just enjoy the ride up !

So wonderful !

Here is one of my recent calls on JASO, the link is here. There are some previous posts on JASO. If interested, you can browser them yourself.

JASO has been on the breakout watching list for a while.

Be aware of the intra-day reversal

Be aware of the intra-day reversal today, the gap up today will be filled, the probability is very high if not 100%.

Euro up last night and is around 1.40 now. Oil is above 69. Gold is above 959.

China stock market is up, but Hong Kong and Japan stock markets are down. European stock market is slightly up now.


JASO, one of our watching list, broke out this morning. I have mentioned JASO several time before, please refer to my previous posts.

Bull's level-1 support is broken, keep your eye on the next 2 levels

Bull's level-1 support is broken, keep your eye on the next 2 levels
support of bulls.

As mentioned before, a 3-levels of support have been formed for bulls recently.

I hope you all have watched these levels very carefully. That's why we do the technical analysis here. If you can not understand them, you will never be able to read the cahrt and use the chart as a tool to help your trading.

For example, to illustrate these support levels' importance, I will use today NASDAQ's market behavior, just to name two observations:

• The gap down just passed the first support level of bulls, which is marked in green
• Today's high is created when the the first support level is touched

Do you still think these price behavior happened just by chance ? Absolutely not. That's why we need to understand the chart well because chart tells us everything, tells us where to buy, tells us where to sell, and tells us what will happen next. Please trust in the chart! The chart never lie to you.

Then, what will happen next ?

From the chart, very simple, I can tell you here:

The the first support level now becomes the resistance of the bulls, unless it can be successfully taken back by bulls, a heading down to test the support strength of the next two levels are very expectable.

A nice intra-day reversal at the end, but still closed down

A nice intra-day reversal at the end, but still closed down today.

Today's market close prediction is correct again. Please notice that our predictions focus on NASDAQ and SPX. As you already know, DOW has deleted GM and C. So tracking DOW is meaningless now.

Today's intra-day reversal is no surprise at all. Actually, according to the special report, such intra-day reversal can be very easily spotted.

A more detailed analysis and predictions will be presented later.

Enjoy !

What a day - Gapped down and is running down now

Good morning !

What a day - Gapped down and is running down now ! I hope all of you have noticed last Friday, we forecasted a gap down this Monday. Hope it can help you to profit from such gaps.

Euro steadily dropped down to ~ 1.38 now. It may be very possible for Euro to drop to 1.37 level very soon.
That's our prediction for Euro here.

Hang Seng index down 2.28%. European stock market is heading down. China's Shang Hai index up 0.52%.

QID may hit 34 soon.

Since last Friday's intra-day reversal, as predicted, today's gap down and running down is really a warning sign for bulls.

If a big close down candle is formed today, then last Friday was the pivot point for a correction. So, stay alert, bulls.

More analysis and conclusions will be posted later.

Some forcasts regarding the unemployment rate

Some forcasts regarding the unemployment rate

• may pass 10% by the end of the year
• the unemployment to reamin elevated at least into 2012