My latest investment strategy finally reports profits when commissions are factored. -eom- Get the Fallond Newsletter Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Hello - I'm a new reader to your blog. I am trying my best to increase my understanding of the markets, and I'm curious if you can point me in the right direction. I've seen all kinds of graphs and charts on yours and other blogs (like this for example), but I have no idea as to how to read or interpret it. Is there a book, or series of books, that I can pick up that might help? Thanks for your time! Wade Welcome aboard Wade! If you are looking for reading material, the best place to start (I think) is with John Murphy's " Technical Analysis of the Financial Markets ". I found it an easier read than Pring's " Technical Analysis Explained ". The MTA (Market Technicians Association) have recommended Edward and Magee's " Technical Analysis of Stock Trends ", but I don't own a copy I can't comment on it. The latter book is the most expensive at over $60, Pring's is cheapest with a listed price of $35 with Murphy coming ...

Market set for a higher open following Dow Chemical's shopping trip ? What the market needs is some traction in the financials backed up with some speculative toe-dipping in tech and small caps. Maybe the feelgood factor will help the indices press their advantage . I am reading Richard Lehman's stockchart list for a guide on what it means for the various downtrend channels in play. So much for the bounce. At least those who follow the magic knew that there was a big line above the Dow and sure enough it repelled the index three times! Also, I got the blue minichannel up early in the day and when it broke (the Dow was down about 80 points by then) at least we knew to pull the plug. One thing about watching these minis is they get you out quickly on market turns you may not have expected. Anyway, we are left with some false breakouts on indexes like the SPX, so now we'll need a day or so to figure out where the current channels really are on the short term charts. (Likely i...

Given the extent of the declines I would be surprised if we saw a "V"-reversal from here, but a small handle which held the bulk of yesterday's gains would be very bullish indeed (or a small rise - then a handle). Shorts were likely responsible for most of the buying/covering action. Large one day gains like Tuesdays' after an extensive decline, the Russell 2000 is a good example, is more bearish than bullish. However, Tuesdays' action is a good start, defining the lows as a basis for a bottom on which future risk can be calculated. Tuesday's lows are now a buying point for sideline money waiting to get in. Shorts will be wary of entering a new positions unless there is a decisive break of its low. Together there is a psychological advantage for bulls. The Russell 2000 fell just shy of a bearish " Three Line Strike ", but the suggestion is there. On the positive side, note the resemblance of the March bottom to the one developing now. The eventual ...

Not much conviction on either side but given bears have had the edge coming into the day, one would have to give them the advantage for Tuesday. The one thing which caught my eye was the spike in volatility (and drop in the S&P) midway through the day. The following chart is one frequently seen on Vix and More (in fact, he posted it yesterday !). Just to repeat; bottom nearly here: Get the Fallond Newsletter Dr. Declan Fallon, Senior Market Technician, Zignals.com the free stock alerts, market alerts and stock charts website

Will this be a busy week, or have all the traders taken their summer vacations? Maurice Walker notes negative divergence in volatility: The VIX and the VXN now have negative divergence in place, with both volatility indexes having produced rising wedges. In contrast he QQQQ now has a bullish falling wedge. But candlestick watch is waiting for confirmation: We continue to watch for a bottoming candle pattern. So far no candlestick pattern has gotton confirmation. Last Thursday's candlestick was a Doji on the S&P 500, which could be a bottoming southern Doji. The DJIA has a Harami two-day candle pattern on its daily chart. In order for the patterns to be confirmed prices must close above the intraday peak of each pattern. I do expect a bottom to be seen, and I think we will bounce next week. I have done a little bottom fishing, but unless you have made a mint these past few months, it is in your best interest to wait for a reversal candlestick pattern and then get confirmation. ...

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