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31 Cards in this Set
- Front
- Back
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support line
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point at which most buyers have shown a greater than average willingness to buy
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resistance line
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point at which most sellers have shown a greater than average willingness to sell
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shorting a stock in a downtrend
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clear channel downtrend where you buy on the high price(entry) and anticipate the next down which becomes the support line(exit)
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long a stock in an uptrend
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when the stock breaks through the resistance and retests what has now become the support line more than once(entry); wait until %gain or new resistance line is tested(exit)
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long a stock in a downtrend
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stock breaks through support and tests a new low and begins to recover (entry); wait to rise to previous support, what is now the resistance (exit); very short price changes
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shorting a stock in an uptrend
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when the stock tests the resistance line the first time(entry) and declines back %(exit); very short price changes
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volume in a bullish phase
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should expand on rallies and contract on declines
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volume in a bearish phase
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should expand on declines and contract on rallies
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when a stock advances and volume declines - Or stock declines and volume expands
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result is almost always a sharp reversal - ideal setup
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distribution phase of a stock
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stocks rally to new highs amid slow or progressively weak volume
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accumulation phase
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stocks decline to new lows amid slow or progressively weak volume
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consolidation
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slowdown in volume
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upside breakout
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in its purest form, it is the period immediatly following a consolidation; volume MUST expand for the if the move is to be considered valid
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downside breakout
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at the end of the wedge, the stock takes a dramatic turn down with very little volume to justify; good sign of a short opportunity
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on a healthy uptrend stock, volume swells on up days and contracts on down days
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on a healthy downtrend stock, volume contracts on up days and swells on down days
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one day reversal signs
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- volume accelerate as the stock moves lower
- stock must close on the day of reversal at or very near session lows |
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trade the one day reversal
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- short is initiated the day after the reversal day
- it mst open modestly lower (1-2%), any more and you missed it - if it opens higher, it was not a reversal - place a stop just above the mid point of the previous days trading range |
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island reversal
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stock gaps up, sees increased volume buy doesn't hit new highs, then gaps down and volume dies off; usually trend killer and will redirect a stock the other direction from where the island started
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large changes in price often follow large declines in volume
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During the wedge creation, watch volume and if it is overall declining or advancing
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in its purest form, a breakout is the period immediatly following a consolidation
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1. Stochastic on the 5 min $INX (S&P) cash index 14,3
2. Moving average on the charts’ 50 and 200 ema on 5 min 3. Chart pattern ie: double bottom, inverted head & shoulders, cup and handle, etc 4. Pivot points S1 S2 R1 R2 Pivot 5. Time of day Others - Relative strength - Trend lines - Candle sticks - General market timing and feeling the pulse of the market |
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If looking at the s&p, when the macd is below the ema selling only. Try not to trade.
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Cherry Picking
- Check for acceptable fundamentals - Always study graphs. what you see is what you get. - Check industry group price performance - Check rank within the industry group by (VST-Vector) and by RS - Consider buying only the highest ranked stocks - Check news for additional info |
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Market overbought – above 80 stoch
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Market oversold – below 20 stoch
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- Market about to bounce
- Holding right at 50ema on 5 min s&p chart - Not making a double bottom but would have been ok - Making a higher low, which is a bullish chart pattern - Not making a lower low - Break in the downward trend line - Set stop at 20 period ema |
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3 of the 4 indicators
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choosing sell time
___________________ head and shoulders 80-90 overbought 20 oversold stoch @ 20 market pulling back to trendline stoch go back to oversold level but equity high is lower than past high (head vs right shoulder) (diverengce) equity croses 20wma and then 50ema that is a classic bear flag |
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LOOK AT SECTORS!!
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