7 Rapid Fire Stock Analysis is Back!
Posted on July 8, 2008 by Rick Swope
We’ll publish the new podcast on Wednesday July 9th with the market comments from the end of Tuesday’s trading day. We’ve identified several bullish engulfing patterns and hammer reversals that we want to watch closely through this week’s trading. Please feel free to listen to the broadcast and post your questions and comments here so that we can respond.
7 Responses to “Rapid Fire Stock Analysis is Back!”
Hi Guys,
Thanks for the Podcast. It’s a great resource. I have followed TMG for some time and enjoyed reading your book.
My question is regarding the first 3 trade suggestions you made in the podcast.. DIA, QQQQ & SPY … The first thing that came to mind while listening to your commentary was.. hey guys… shouldn’t we be trading with the trend?? Go where the money is going !!
At the moment, the trend for these 3 symbols is down. Even though the candle stick patterns were indicating that we could have a short term bounce. My thinking was… don’ trade against the trend… If price does bounce up, then look for a short entry if the candle sticks give a signal at a good resistance point such as the 50 and/or 200SMA.
Your thoughts on this would be very much appreciated. Keep up the good work.
Cheers,
Pete
Im also wondering if the downtrend isnt over yet. I now see, at the end of today (7-9-08), an obvious BEARISH engulfing pattern on DIA.
PS. Rick and AJ, THANK YOU for everything you guys do. You guys are awesome!
Great podcast guys, thanks a bunch!
I was puzzled by the exact same thing as Pete. I went back over your 5 points for success and the very first one was “trade with the trend” showing rising 50 and 200 day m/a’s.
Are you saying there are exceptions sometimes or were you just using the Q’s and SPY’s for instructional purposes?
Thanks for the great info and sharing your knowledge…. JT
Hi Guys!
First of all, it’s great to see you picking up on the 5 Points as the basis of your questions! You’re all asking about the same thing - why aren’t you guys following the trend?? The main point is that we wanted to use the major indices in our first round of analysis and - as you know - the daily charts simply don’t have the uptrends. Since most of our listeners only trade long (no short selling), we wanted to identify the *best* opportunities to buy in a weak market.
At about 4:20 in the program, we mentioned that we were actually focused on the weekly chart to help us find historical support levels. Overall, this market does provide better short opportunities in the major indices - which is in line with the prevailing trends. Interestingly, even with the bearish engulfing patterns today (7/9), none of the indices broke below support so the buy may still prove OK.
Second, the two individual stocks that we picked (TRA and POT) both followed the trend rule in our 5 Points. And BOTH were up today when the Dow was down 236 points! So, we’ll use that as a reminder that following the trend is still the best rule in trading.
Thanks for the great questions and comments and keep listening and sharing the broadcast!
Best,
Rick
Rick, thanks for the detailed explanation. Makes sense as always.
Keep up the great work!!!!!!!
JT
Rick, after reading your reply it brought to mind one more question…
Do you use the indices as your first measure of whether you are going to enter a trade?
ie, lets say you found the long opportunities in POT and TRA that you discussed in the podcast, but the QQQQ and SPY were not showing the bullish candles. Would you go ahead and take the trade, or would a negative overall market picture override any potential trades and you’d wait for a turnaround before entering any longs?
Thanks again, JT
Hey JT,
If you don’t mind, I’m going to jump into this question even though you addressed it to Rick.
There are many times I will take a long position in a stock when the broader based markets are showing weakness. In fact, many stocks are inversely related to others. As an example you can look at the Oil stocks relative to the Airline stocks or, during hurricane season, you can look at the home builders relative to the insurance companies. Yes, it is important to see what the rest of the world is looking at with regard to the market as a whole, but don’t be afraid to take a stand in a stock that is showing signs of support. Especially ones with pivot points forming on the buy side. The most important thing to remember is to protect yourself below those support levels in the event you are wrong…and please count on the fact that you are going to be wrong once in a while. Sometimes even more than just once in a while.
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