Market Watch for week of July 13, 2009

[Dr. Dave]

I guess that's why penny stocks are tough to play, the stuff happens so fast. A pump on the big boards moves slower - ie. a couple of weeks before earnings you'll see the formation of a classic pattern, and a bounce off an intermediate level trendline - you have can have several days, or actually even anticipate that, so perhaps a week to get in. I think I glanced at AMZN and PCLN and if I remember right, they are at the tops of a couple of triangles - their earnings should be around the corner, so there, i would look for the bounce up out of the triangle, like mon-weds, as that was happened with AAPL, which is why I bought the calls. That also would be time wise, a good time to get the nasdaq to hit the gap resistance.

[Sean]

looking back on my good stockchart game i bought on every "Green" hanging man/hammer in a downtrend (closed higher than open) and sold on every "red" hanging man/hammer in an uptrent (closed lower than open)

[Dr. Dave]

yea when i played the stock game and started to do good was after i watched a video about the hanging man / hammer, in a downstrend hammer=good and uptrend hanging man=reversal it worked almost every time

Nice - now next time you play, zoom out on the 4 year chart - if the trend is down and heading to a long term support level, hold off on your buys altogether, or just play, but pay attention - then watch how half the time the support will be hit, and when it does, its a hammer. Usually, you want a confiramation of an upday the following day, but on major support like that, you usually don't have to bother.

Same with the top - watch how many times a resistance line ends with the same thing but with the man.

Then when you learn classic chart patterns, you'll see it happen or be able to start picking out triangles and stuff before they happen with those candles.

Don't get me wrong though, they don't work every time, otherwise, I'd be doing something else right now, but they are great entry/exit points - particulalry when combined with supprot and resistance or being played with a classic chart pattern - or fundamental event - ie. look for run ups for an earnings report that comes out - then look what happens afterward - a lot of times, you may see a gap up big white candle, then next day, the spinning top,etc. Same with other news.

[Sean]

mglg and bcle are weird because they don't really have any of the signs or signals of other i guess more stable charts have, but i guess its more fundamental rather than technical with those two, and the TA would have said for me to not buy mglg yet, and buy bcle on monday i think?

[Sean]

i guess another question about chart symbols is. if you see a hanging man form on the support half way through the day do you buy, or wait until the day is over, and vise/versa for resistance, unless you wait for confirmation the next day? but then after that day everyone could be buying/selling on that confirmation and you could be outta luck :S,

[Sean]

if.... bcle runs up... holy smokes, just thinking about that for me is probablly like shots thinking about that $100,000 on ifsl... it'd be amazing

[Dr. Dave]

i guess another question about chart symbols is. if you see a hanging man form on the support half way through the day do you buy, or wait until the day is over, and vise/versa for resistance, unless you wait for confirmation the next day? but then after that day everyone could be buying/selling on that confirmation and you could be outta luck :S,

That depends on different things -

1) your risk tolerance and exit strategy - if its not confirmed immediately the following day, would you have the discipline to exit the trade

2) how major is the support or resistance - if its a retest of an alltime high - it would be best to wait for confirmation - there could be many bailing at the high but more stepping in waiting for the breakout - in that case, I'd go with confirmation. Now in a falling market and a major resistance line, I could see going in on that day... but if there is a lot of volatility, a better play isn't after the confirmation, but during that morning

again, your risk tolerance and experience, also strategy - could always go half in.

On about march 9 this year, I went from being short - was short everything until - you'll love the chart - the NYSE hit a 30 year trendline - there wasn't a hammer, but a bunch of doji's so I went 100% the opposite and went long without confirmation and it payed off. See in that case it was ultra major resistance. so I didn't mind going in without confirmation - and canceling all shorts - Though, I didn't go all in money wise, I think i made a trade also the following day - maybe I didn't, whould have to check. Too bad I still thought there was way more bear left - I cashed out on those longs way too early - hahaha - hell, I should still be holding them!

It's just experience I guess - but again, the market has a tendency to make you pick wrong - so actually, for classic chart patterns these days, my strategy is let it break out, then go in on what's called the retest if there is one... or go 1/2 in first, then wait to see if there is a retest. The turning point for the retest should be a reversal candle if you're lucky.

[Dr. Dave]

if.... bcle runs up... holy smokes, just thinking about that for me is probablly like shots thinking about that $100,000 on ifsl... it'd be amazing

BCLE is in a chart pattern called a reverse symmetrical triangle - pretty rare, if there is an upswing, we're in the prices to get in. No pattern is guaranteed, they just make good entry/exit points some of the time - but I feel more comfortable in those than going blind and just buying/selling anywhere. I haven't looked at MGLG closely, but it was in kind of a channel before. I'll check it out later. I'm more bullish on the BCLE chart.

[Dr. Dave]

I guess Brazilian jiu jitsu is out of the question manana -

Great talking to you, but I do have to hit the hay, more work tomorrow.

[Sworntwofun]

Whats up Guys, Mr Bill, Mr.Behl, Tripp, Dread and the rest of the crew..

Getting ready to go to Warped Tour concert with the family at Monmouth Park. We go every year and I play bodyguard to try to keep the kids safe from the marsh pits because you never know when one is gonna forms around you! Anyway I hope you all are having a good weekend....

There is one stock I hold and have mentioned it a few times to you all but nobody seem interested so I will say it one more time and leave it alone....I dont want anyone to think its a pump....Its ASFX which make a lot childrens heath products that can be purchased at a number of big department stores...but is best item is this thermometer that is growing around the world...Its one that can take a tempeture from up to 10" away from the patient....I have 300,000 shares @ .0055 which is high but you can get it now from .0022 to .003 I have a buy in for another 100k @ .0022 to try to adv. down more, the company is getting its business model in order to getting ready to be uplisted so I believe it will become very profitable....so Check it out.....Tony