PurelyTechnical

The following is a quick update to the S&P-500 chart featured in the Nov 14th blog article "The Secret to the Stock Market for the Rest of '08", as of the close of the Nov 19th trading session.

The first thing you need to notice is the fact that support at 845 has been demolished as of Wednesday's close. The bulls better be on their knees praying that this was a false break because if they are unable to pull the index back above 845 immediately (as in on Thursday), this index is headed towards the 650-700 area in a hurry.

Now, that reading is based on the descending triangle pattern, of course. The crux of our showing you the chart that has been presented above is the trend in the Bollinger Bands, of course. In the Nov 14th article, we'd laid out a number of reasons why the movement in the Bollinger Bands was to be seen as being more important than perhaps even price action itself.

Well, the lower Bollinger Band started falling several days ago and, as such, predicted that support would be broken sooner rather than later. If you'd studied the Bollinger Bands, you would have know that there was a high probability that it was only a matter of time before support at 845 would be taken out.

Our Short Stock Picks list and Volatility Options Picks lists have been chock full of bearish trading picks for the past several sessions - even well before the actual breaking of support at 845 - and there have been virtually NO bullish picks on any of the lists whatsoever. Why? It is simple. The Bollinger Bands were providing us with a very good indication that all hell was about to break loose to the downside. Buying stocks made no sense whatsoever; shorting stocks (or taking on volatility-based options positions) did!

This foresight has been especially useful and, as a result, our lists are filled to the brim with profitable trading picks (as they have been for the past several months, may we add...).

Technical Analysis is a great art and science but it is NOT one-dimensional.

Too many chartists use price action (patterns and formations) alone to guide them in their analysis. We do not relegate ourselves to the mundane chart patterns alone. Instead we follow a more holistic approach utilizing Chart Patterns, Volume Analysis, Fibonacci Analysis, Bollinger Band Theory, Momentum Indicators and Sentiment Analysis (strictly via studies of the VIX and P/C Ratios).

None of these methods is our creation. The great technicians before us have given us the gift of these great technical analysis tools and all we have done, through years and years of painstaking study, is learn how to use these tools to our benefit.

If you have never tried our services prior to this, we strongly urge you to take a look at our services, which are available completely for free for the next two days (you do not need to sign up; it is absolutely free), and provide yourself not only with the opportunity to pick up a few good trading ideas but also to learn with us how to become a better trader.

Don't waste this opportunity!

Simply visit our home page - www.TheMarketMessenger.com - and click on the 'Members Home' tab near top-right of page to take advantage of our Stock Picks, Options Picks, Model Portfolio and Stock Market Commentary absolutely FREE (for 2 more days only).

We're providing you with this opportunity because we are absolutely certain that you will enjoy what you see and strongly consider signing up to a better future for yourself as a trader.

Thank you for your support!

The following is a quick update to the S&P-500 chart featured in the Nov 14th blog article "The Secret to the Stock Market for the Rest of '08".

Note that as of mid-afternoon (1:50 PM EST), the S&P-500 is trading below the crucial support level of 845-850. We'll have to see where the index actually closes today but if it closes below 845, the lower Bollinger Band is going to continue to point lower and, as mentioned previously, that paves the way for a potentially sharp drop over the coming sessions.

For a more in-depth reading of the technical picture of the markets, check out the most recent editions of Weekly and Nightly Commentary in the Members Area... Do not forget that our Membership Services are Currently FREE (for 4 more days only).

So please take the opportunity to read our market commentary, access current Stock Picks and Options Picks and follow changes to our Model Portfolio, simply by visiting our home page - www.TheMarketMessenger.com - and clicking on the 'Members Home' tab near top-right of page.

Hope that you are having a good trading day!

An update to the S&P-500 chart featured in the article "The Secret to the Stock Market for the Rest of '08" has been provided in the latest edition of 'The Big Picture' Weekly Commentary, available for free as a promotional feature until Nov 21.

Also covered in the latest edition of Weekly Commentary, is a rundown of the most significant developments on the daily and weekly charts of the S&P-500, the Dow Jones Industrials and the Nasdaq-100, as well as of the daily chart of the VIX. You can access 'The Big Picture' by visiting our home page - www.TheMarketMessenger.com - and clicking on the 'Members Home' tab near top-right of page.

Hope you had a good weekend.

Various theories - both fundamental and technical - are floating around the investor class, regarding what the markets will do over the remainder of 2008.

The fundamental crowd typically says something akin to "as goes the housing market, so goes the stock market". That is both evasive as well as missing the point, in our point of view. We could list a number of reasons why that view or any other economy-based view is of absolutely no use to the investor with a timeframe of anything less than several years (even perhaps a decade or longer) but the foremost of them is the fact that the stock market leads the economy by 6-9 months. In a scenario like the present, the markets could drop a further 50% or rally 50-75% in 6-9 months.

Accordingly, a shorter-term view is imperative if one is a trader/investor with a horizon of anything less than 3-4 years. One needs to try and envision the path of the markets over each 4-6 week period and then plan his/her allocation strategies based upon the potential paths over that period.

We've done our research and are absolutely convinced that the action over the next 4 to 6 weeks depends largely upon the answers to the three questions listed on the chart below.

As you can see, we've given price action only secondary consideration (notice the low opacity of the candlesticks) on the chart of the S&P-500, above. The Bollinger Bands, the 20-day Moving Average (in the upper pane) and the Bollinger Band Width (in the lower pane), have been given primary importance.

Click to read more ...

TheMarketMessenger.com congratulates the new President of the United States Barack Obama on his landslide victory and wishes him and Veep-Elect Joe Biden, the very best and God speed in their quest to challenge the status quo in Washington and bring about the kind of change that America needs.

A thank you is also in order to John McCain for his graciousness, after a tough campaign and we appreciate his offering to help President-Elect Obama achieve his goals in the years ahead.

We'd also like to take this opportunity to bring to your attention the website of the Office of the President-Elect - Change.gov - where you will not only be able to learn about the latest items on the  agenda of the new President but also to share your ideas about how to help move this country forward.

Additionally, for those of you interested, you can apply for a job with the White House through that website.

The markets are showing potential buy signals, at present. Mostly these signals are seen in the form of positive divergences on MACD.

Those divergences have not yet completed themselves - a new failure swing high is needed in order to complete a positive divergence - but it won't take more than one or two days of gains within the next couple of sessions in order to bring about such completions.

The majority of the following setups are primed to provide huge trading profits, if the aforementioned stock market buy signals eventuate. (A few setups that will gain from any continuation of the declines have been provided at the end of this write-up as well).

Each potential trading pick has been provided with a rundown of the technical analysis on it's stock chart, buy (sell) trigger points, stop loss parameters and initial targets. Each of those elements is malleable according to trading style, of course.

Stock picks that have triggered or are close to triggering will be moved to the respective stock picks list in the members area immediately and will be followed until either the target has been met or protective stop loss has been triggered.

Long Stock Picks

The following are several stocks that could be expected to do well given a rebound in the markets:

Long Stock Pick - ATK

Click to read more ...

There has been a huge number of stock picks on which profits have been booked so far in the month of October. In this write-up, we'll take a look at 30 of the mentioned stock picks and try to provide a bit of insight into why each of the trading setups was considered attractive enough to be featured in the list of trading picks at TheMarketMessenger.com.

-------------------------

As you know, the trend leading into the month of October was an extremely bearish one and, as such, it will be of no surprise to note that the vast majority of trading picks were on bearish setups that were placed on the Short Stock Picks list.

The first trading pick featured below is a short pick on ERIC. 

Short Stock Pick: ERIC - descending triangle

ERIC was about to break out of a descending triangle in mid-Sept when this bearish trading pick was featured. The height of the pattern was just over 2.50 points. The stock traded sideways for around a week before moving in earnest towards the target of 7.50.

Click to read more ...

The S&P-500 came within points of making a 50% retacement of the 420-pt, 3-week crash, this morning. See chart below.

A very interesting development has crept up on the weekly charts after Monday's move and I thought that I should bring it to your attention immediately...

The weekly chart of the S&P-500 (SPX), as well as those of a few other indices, is showing a relatively rare event that almost always signals that a near-term bottom is barely days away. The chart below is a snapshot of the weekly chart of SPX, taken mid-day on Tuesday. While there are several compelling reasons to believe that a short-term bottom is nigh, the one that I want to point your attention to is the fact that the whole candlestick for this week is outside the lower Bollinger Band.

Before we scrutinize the chart in more detail, let me make it unequivocally clear that I continue to believe, just as I have for the past year, that the major markets will be cut in half over the coming year or two and that this is purely a short-term to medium-term trading call.

With that caveat out of the way, let's take a closer look at the chart.

Click to read more ...

INTRODUCTION:

The Rectangle is a neutral pattern; it can show up as a continuation pattern or as a reversal pattern. Rectangles are seen during uptrends and downtrends and are often referred to as trading ranges or congestion areas. They share some of the qualities of symmetrical triangles. 

Click to read more ...