Saturday, November 13, 2010

A Perspective on Wide Range Days

Swing Trade Update - Monday Nov 15 ( my birth date )
Long from 1092 initiated on Friday Nov 12
Current price : 1201.50
Open Profits : + 109.50 Pts

RSI ( 2 ) Reading :  7
Prices above the 200 MA ( RSI Requirement )
Long Term Bullish Trend Line tested
Other Clues as emailed to Subscribers and qualified Followers.

James need your opinion on the last twenty posts. Thanks. Hope your doing great in Singapore.

Looks like the Range Theory goes out the window.The Market likes to prove that we are wrong sometimes, LOL

Swing position is doing great. RSI ( 2 ) Setup worked as a champ !. Current profits are now
 + 113.75 Pts.

The simple definition of a "distribution day" is a down day on higher volume than the previous day. Many investors pay attention to these days because when a number of them occur over a short period of time, it flashes a potential warning sign of a near-term top in the market.

To expand on that subject the distribution day must meet additional parameters:

1. It must be the Widest Range Day of the last 5 days
2. It must close near the Low of the Day
3. There must be an increase in Volume compared to the previous day.

Looking at the last four months, there was only three days that meet the criteria and they were all followed by lower prices.Therefore it is reasonable to assume that Friday sesssion will be followed by lower prices and will be a great opportunity to go Long.Must likely it will occur during the Sunday Globex session.

1 comment:

  1. Rarely see this type of analysis ... makes for a great way to front run the 'crowded' trades.