Tiger Gao Market Watch: 08/30/2009

GIGM - review chart

Below is a GIGM review chart:

50/250 golden cross three times forming a round bottom
Then kiss three times before hit the all time high
The 50/250 death cross marked the new DOWN trend.

Other technical analysis tips are linked here.

Some key points to watch a stock price development

The stock price development is a pretty complex thing in nature due to many uncertainties and unknown events. But, still, there are some clues to understand how it is moving and why. It's very similar to treat a sick people as a doctor. One important thing is to remember: dynamics

In addition, don't just rely on some simple rules. Combinations of many tools are much more helpful and reliable.

Below is a short list of key points I always keep watching:

50MA and 250MA (the positions, movements, etc.)
trap-zones vs. money-making zones
chart patterns
price relative positions
previous substantial waves (UP or DOWN)

SPPI - a nice breakout and run chart

SPPI - a nice breakout and run chart to review please note the following key points (other breakout charts are also linked)

Gap ups
50 and 250 MA
V bottom line
/\ top line
trap -zone and money-making zones

ETFC - the bottom line

Below, the read line in the chart is ETFC's bottom line for the bulls.

Previous posts on ETFC can be found here.

The unemployment rate rose to 9.7 percent in August

which is a 26-year high.

But the market is still in green. Pretty good !

Grand view of the current stock market: S&P500 as an example

Many people got lost in the market up and downs, especially after some measurable moves. Fears and greedy desires are coming up very very easily. But if you apply my unique stock price development model, which can be found here if you are new to it, you can easily grasp the market's motion and quickly understand why the market is moving this way, not that way!

Below is a daily chart for S&P500, which is perfect for today's grand view on the current US stock market. Below I will list several key conclusions based on my unique stock price development model and theory:

Since 2000, and actually until now, the US market is forming a perfect trap-zone
Technically, this trap-zone has been completed, just wait for the confirmation
We are partly in the Bull's money-making zone, this Bull's money making zone will make a new higher high, if the upper boundary of the trap-zone is broken out successfully
The dynamics of the trap-zone is the leading force for this range of the market motion

Beautiful yet powerful symmetry principle - GIGM as an example

Previously, I have mentioned the powerful symmetry principle for several times. Here is a beautiful chart of GIGM to demonstrate the power of it:

From ~2002 to ~2004, a trap-zone is formed
Broken out of the trap-zone signals a reliable trend reversal
Then GIGM goes up with ~ 2000% gain in several years, forming a symmetry round circle line

The stock price movement always follows some beautiful nature patterns, it is really an art work of people's hearts !

SVA - a typical stock price development chart

SVA - a typical stock price development chart need to study well

accumulation stage: from 0.75 - 1.02
push up stages
the previous V bottom line is the life line for the bullish run
250 MA is another key
The topping process is very interesting

SVA initially caught my eye when it has a nice chart set up. The set up chart is here.

Previous SVA charts, analysis, and snapshots are listed here.

Gap down - a sign of weakness

Gap down - a sign of weakness

Gap down is an effective sign of weakness of bulls, especially closed down that day, if you apply it to the daily chart.

It is especially useful for a straight gap up move ( at least 3 gap ups in a row) in a almost 90 degree angle ! Once the gap down appears after a gap up, especially with a close down, then a measurable retreat is coming. A real example is ETFC, please refer to the following chart.

Other technical analysis tips can be found here as well.

A reply to the comments

Recently, a friend has the following comment:

"based on your theory, there are two dimensions, time and price move. Yes, you predicted the down-up-down move, but that is only one dimension. with different time dimensions, what you predicted can be right or wrong. What is more important, without knowing the time dimension, even though we know the price dimension will be down-up-down wave, we still don't know how to trade since we don't know when is the pivot point."

Here is my reply:

All my analysis and predictions are free and just for sharing my market watch purpose. How to take advantage of it is your job.
I have more than 5 trading and investment accounts to take care of, which is my first priority. So my market watch sharing may be not very quick. Please just read them for fun or try to learn how to follow the market trend, how to analyze the market. But don't follow my trading. Please read the "Disclaimer and Notice" at the end of the page, which is quoted below

"Any ideas or opinions expressed by the website are for informational purposes only. Trade at your own financial risk as we assume no responsibility for your investing decisions.
Please keep in mind that any recommendations and revealed trades may be paper trading without real money involved. So trading stocks at your own decision since only you can control the RISK of your own trades."

For the time dimension, I have some theory and rules to analyze them, for example, symmetry principle, magic number theory, etc. It's far more complex to explain in several sentences. It's extremely hard to understand and master also. I will share more on that when I feel it is ready to do so.
With this sentence "with different time dimensions, what you predicted can be right or wrong." I think you are totally lost in my theory. You'd better read them again, especially read with the chart. The beauty of my stock price movement model is its distinct conclusion on the market movement. Otherwise, it is not applicable at all.

Finally, I think bokchoy's comment is very good for you: "thx tiger for the posts. My 2 cents for the above coments, my understanding of tiger's theroy is: you also need to look at the trap zone vs. money making zones. So right now, we may be out of the trap zone and move into the $ making zone to the down side."

At least, the combination and correlation of the trap-zone and money-making zone has been clearly demonstrated.

The stock market just moves as predicted before

The stock market just moves as predicted before !

I quote some words from Last week's post below:

"Usually, this is not good for the bulls, especially when the Nasdaq market breaks down ~1990 again. "

"Currently, the market is in the stage of the UP, and I am expecting a DOWN wave to come once this UP wave is completed ! "

" It is exactly in the predicted order DOWN-UP-DOWN. "

Now we are in the DOWN wave, as I expected after the DOWN and UP waves.

The first target of this DOWN wave is to hit the 50MA ....

A typical stock top pattern - STAR

Please notice that:

Divergence for the top
V bottom line broken down
Transition of the trap-zone

Such top will produce a measurable correction. Other technical analysis tips can be found here as well.

ETFC - measurable retreat

This is a very measurable retreat in ETFC. If you sold it at above 1.80 then bought back at 1.50. You didn't lose your shares but gain 30 cents per share. Very good opportunity to reduce your position cost to zero.

Once you see a V is forming, and smell that the V bottom line will be broken down, then take your profits first since such patterns will surely let you buy back at much lower prices.

The gap up is almost filled today. For more ETFC analysis and predictions, please follow the link here.

Important top and bottom chart signs

For the top signs, make sure that the price can immediately drop for a measurable amount after you sell.

double heads M pattern
V pattern bottom line is broken down with new lower low
divergence for the top
Wait to sell at about or above the V pattern bottom line, when the price is in a UP wave

For the bottoms signs, make sure that the price can immediately climb up for a measurable amount after you buy.

double or multiple bottom W pattern
/\ (the reversal V) pattern top line is broken out with new high higher
divergence for the bottom
wait to buy at about or below the /\ pattern top line, when the price is in a DOWN wave

The KEY is to buy a stock when it is at the end of a DOWN wave, and to sell a stock when it is at the end of a UP wave.

Other technical analysis tips can be found here as well.