Wednesday, March 25, 2009

Technical Picture - Fractional New Recovery Highs

Markets gapped up on favorable economic data, but after setting fractional new recovery highs, they chopped around and eventually succumbed to weakness with steady selling from midday to the last hour, where prices reversed and rallied into the close. As you can see from NASDAQ futures chart below, buyers stepped up when prices came into gap support. The CPC has printed a higher low and is moving back above extreme bullish zone - this could foreshadow more profit taking to come.




Gold is forming a bullish falg versus the $USD which is forming a bearish flag.

8 comments:

Trader-X said...

Dude - I thought I was taking a long vacation. You are gone a month and a half. WTH?

Jamie said...

Yeah - Most of my career, prior to trading, was spent living out of a suitcase. When I started trading and since 9/11, I was comfortable being a homer. Now, I've got to make up for lost time.

Enjoy your vacation Dude!

anothercountry said...

Jamie,

Just out of interest how/why did you start in trading?

Cheers

AC

Jamie said...

Hi AC,

My brother is a professional hedge fund trader and he initially got me interested in swing trading as a sideline. Eventually, I took the plunge into full-time trading because I was tired of dealing senior corporate bosses and their shameless self interests.

Jim said...

Jamie,

What are the primary differences/ similarities between your trading style and your brother's?

Jamie said...

Jim,

My brother is a swing trader. He buys support and sells resistance. He doesn't mind averaging down. Mainly, he trades ETFs. On swing trades, he's usually in before me, because I'm waiting for confirmation.

Jim said...

You brother's fund should hire you to daytrade as a hedge/diversification against swing trades. It would reduce the fund's standard deviation in returns (or beta relative to the broader market).

Jamie said...

Jim,

I was referring to his personal trading style for his own account. The hedge fund is longer-term, but yes, they could benefit from a daytrading account to take advantage of short-term moves.

The fund's focus is strictly biotech, which didn't get crushed as bad as the broader market during the meltdown. Prior to the Obama budget, they were in a relatively good position. Still, redemptions were higher than prior years, given the general investor panic.