Sunday, January 21, 2007

Where and When...?

Here I go again, back to my favorite "deceit" theme, back to "Market will do what we expect it to do, only not WHEN we expect it to.."

As I was doing my regular "homework" in preparation for the next week, I spotted so many stocks that are at the final stages of forming classic chart patterns - mostly triangles, many of which (according to classic interpretations ) are quite bullish.

Such a great news for me, groomed by Investors Business Daily perpetual bullishness, but wait - something does not feel quite right, what is it? What is it???

I got it - most of "bullish" patterns I've recognized are very short in duration and IBD's classic statement says: "Short bases FAIL". That does not sound good - is it?

Well, it does not sound too bad as of right right now, there is still money to be made on a bullish side, those "short bases" do not fail tomorrow, they still might breakout on the upside - but after that LOOKOUT - if breakouts will fail to maintain their upward stance - bulls will run for the cover really fast.

Speaking of bearish chart patterns - as of right now a lot of those surprised bears, eagerly awaiting juicy profits, a lot of bearishly looking stocks resolved to the upside, the problem is - where is volume, where is continuation of an upside move?

Lets stay alert, lets be flexible, don't get caught asking naive question: "Why market did not do what I expected it to do?"


P.S. I will post some ideas on the Members Site later tonight and most likely will readjust a lot of stops, this time of the year I like to cut my losses even shorter than usual.