Just an observation on what I saw in my walk through the daily charts.
A large number of stocks hit peaks on Sept. 20, declined to lows on Oct. 4 or 5 or thereabouts, and then have since bounced up sharply.
Technically, however, by my rules none of these are playable. They've yet to set a higher low, so I can't draw a trend channel. And they haven't yet broken through the previous high or the 20-day Donchian level, so I can't call a breakout.
Absent at least one of those criteria, I'm left with a pretty chart but no signals. That keeps me sitting on the sidelines, and with earnings announcements on top of us amidst a swamp of negative forecasts for the broad economy, perhaps the sidelines are the best place to be.
About my trading methods
Read a detailed explanation of my analysis method, including trading rules.
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.
The trader’s greatest sin is inaction. Sleeper, awake! Seize the Nietzchean moment. Roll out of bed and trade.