Moving Average Stock Chart ...S$P 500

10/40/200 Time Period Weighted Moving Average

Click on chart to Enlarge

The Moving average is buy far one of the most useful and popular technical indicators.
The WMA Weighted Moving Average uses past price performance as a predictive tool for future price movement .

To use this tool properly, it is important to understand and be aware of the chart time frame you're viewing.

The moving average calculates the past 10, 40, 200 time periods and generates a line on the chart. If you're on a daily chart the 40 ma will be a line representing the past 40 (days).
If you're on a 15 minute chart the 40 ma will be a line representing the last 40 (15 minute time periods).

There are several ways to calculate moving averages

Simple Moving average.......is the basic moving average.
Exponential moving average...is a simple moving average with a deviation component used to smooth the line out.
Weighted moving average...is an exponential moving average where the most current time periods are weighted to be more relevant or significant.

Signficant Points:

1. Look at the Above chart......notice how the 10 wma follows the price closer than the 40 wma.

2. On the left side of the chart the 10 wma is well above the 40wma(this is a Bullish trend).
also notice the rising volume.

3. Then notice how the 10 wma begins to turn down toward the 40 wma and continues to cross over the 40 wma . Again notice the volume.

4. Once the 10 wma passes under the 40 wma the trend is then considered Bearish.(Sell Signal)
also notice the red volume selling spike the first time the 10 wma touched the 40 wma.

5. The 10 wma continued to move down to the 200 wma and bounced twice (double bottom).
Notice the long red sell candles as the price moves down. (indicates high volatility ).
Notice the 2 red sell volume spikes when the 10 wma first touches the wma 200.
Also notice the second bounce was not as low as the first. (first confirmation of a bottom)

6.Then 10 wma moved back up to and crossed over the 40 wma where the trend becomes bullish again. (Buy Signal)


Always....Always.....Always .....BE Aware of the time frame you are looking.
It is very important to remain in context with the prevailing trend and overall price movement.

The 10 wma and 40 wma are in months on the above chart.. but on a Daily chart the wma's would be the past (10) one hour periods or the past (40) 15 minute periods...

this the biggest mistake a new chart reader will make....The wma's are still relivent but only for the time frame of the specific chart time frame.....

Don't get in to a trap of looking at weekly chart and make your trading decisions based on the hourly chart.... or visa versa, they're two different worlds.

As you look at different chart time frames , you will notice the same kind of price movements
on a 30 minute intraday chart as with the weekly 5 year chart...

As a Swing or Day Trader,

I use the yearly,monthly and weekly charts for over all perspective.
I base all my buying and selling decisions on the intradaily- 30 minute and 5 minute charts.
I will use the 1 hour and 1 minute charts to gage the rhythm of cycles.

To keep my perspective, many times I'll print off and put up a 3 month and a 2 year chart while trading the intraday 30 minute chart.
It is easy to get so close to the bushes, you lose track of where the trees are.

If I make a decision to buy stock on the 30 minute chart, I will stay with the 30 minute chart until I make the decision to sell....Don't buy in on the 30 minute chart and then jump over to the 3 minute chart to decide when to sell.....Every time I tried it , I got confused and ended up losing money or getting out too early or too late.

Avoid The Wipe Out!

The market is indifferent to all.

As the moon is to the Ocean, so is the market to the trade.

The wise trader is indifferent to the trade.

As the tide is to a sand castle , each trade is as a straw dog.



Market sectors are as oceans, each with their own kind.

Rise and fall of a wave, as a clock in time.

Space between the waves are as sleeping volcano's.

Compressing down yet building up.


The Fifth Constant Market Trader Tao

"Large waves require patience and commitment.
Medium waves expect endurance and strength.
Small waves demand attention and agility.

When searching for starfish in the tide waves, A wise trader always
knows where the big waves are."

Neboxian

READING THE CURRENTS ......For Beginners

S&P 500 Volume 20 Year Annual


















This is A Moment for Great Opportunity...
The Risk is being on the right or wrong side of the trade.

Volume is Like A Tug Boat Pushing the Price Barge UP And
Down the Chart.

The Resistance line is like a narrow passage in the river .
The resistance Current can be very strong against forward progress.
Once the price is pushed through the resistance line, the strong
resistance current lessens significantly and the price will continue
to move easier in the same direction. There will also be an extra
spike in buying volume.

On the other hand, if the price fails to push through the
resistance, the prevailing current will reverse
the price very quickly and price will be pushed back toward a
previous level of resistance along with a spike in selling volume.

When the price action flattens out for 4- 9 time periods that
means the Tug Boat is working very hard to break through..
This a time for patience.
.....There are a number of terms for this .activity.
Consolidation, coiling (tighten like a spring), distribution.
All these terms convey the building up of energy.

A good example of this is the moment before opening of the
nozzle of a garden hose under pressure.... Once you open the nozzle there is
a blast of water volume under a lot of pressure...it's also
to notice the direction the nozzle is pointed.

Many times it is difficult to tell which direction the price will go.

I will anticipate the price will go with the prevailing trend but
also watch closely for other evidence of of my predilection.
I am always ready to quickly move out of my position should
the market say otherwise.

If there Questions ....leave them in the comments section ... NeboXian

Week end Fun Time...Just for Girls

A large Majority of my readers are Women.
So Here's Yours Girls.

Goodbye Summer!

Music by: Peter Cincotti
Goodbye Philadelphia
_____________
Have a Great Week End and
Go have some Fun.

Dont Get All Tangled Up!

There are many places you can make it fast or lose it faster

Options, Futures, E-minis, Forex...all these
products work great! But jumping into the
water to soon could easily produce an outcome

we can only imagine in this picture.

These products have GREAT potential
to make money in theskilled traders' hands.

With Common Stock one can purchase and walk away for
months or in some cases years and can return having a
reasonable expectation of all the money plus growth will
be waiting.

On the other hand, the above mentioned trading instruments
are not designed the same way. They are heavily leveraged
Instruments as much as 200 to 1.
This 200 to 1 leveraging can work
with you or against you in equal magnitude!

Many new and some older investors don't really
understand the concept of leveraged Instruments.
But they will try to trade the market and very quickly
realize the market is cruel.

To give you a better picture of this, lets look at the house
equity you used to leverage your home loan.

To keep it all simple, the value of your house drops and
the bank calls your loan in.

There are three options.

1. Come up with the cash to cover the difference.
2. Put up other property of equal value.
3. They take your house.

Imagine how this would play out if your house house
value dropped from $300,000 down to
$150,000 in a few months?

Leveraged Stock market Instruments can do this Quite
often and in fact do.

The old mind set of buy'm and hold'm Will NOT Work
with many leveraged products.

If you're not able to hover over the trade like an
Eagle, ready to pounce at any moment, then most
leveraged investments will in most cases become
a big disappointment.

Market Trader Tao

"The Wise trader walks the path easily seen.
It is best to learn the potential of the Lion
before stalking, to prevent becoming the prey."
NeboXian

Volume is the first place to look... Lesson 2

Beginners 101...

A significant change in volume is telling us something is happening
to the opinion and emotion of the people holding an interest in the stock.

This could be Good.....or ..This could be Bad.
That depends on the number of sellers vs buyers trading.

If the high volume is a result of more sellers, then expect
the price to begin to fall.

If the High volume is a result of more buyers, expect the price to move up.

Many times the stock price will continue to move in the current
direction, while the volume, is showing the momentum is changing...

A good example of this is, if you throw a ball in to the air, as it
reaches the highest point, the ball loses upward momentum (slows down) but
continues to move up for a very short period of time.
Then the ball reverses direction ...and increases momentum again in the opposite
direction.

We are looking for this type of divergence of price direction and volume momentum.
In stock price /volume comparison, this principle works in both directions.

Market Trader Tao

"The wise trader always travels with the trend as a mountain stream.
Watching for the change in the current ahead will keep you on
the right side of the trade."

NeboXian

IT's Always about VOLUME!

Large changes in volume mean something
is happening...it should get your attention.

Powered by ScribeFire.

Market Trader Tao... Eight...

The strongest position is with the Trend
Flow with it as water.

Do not struggle with the correction
move smoothly without hesitation
Treat the reversal as a bolder in the stream.

Others fear the low places.
Be as water and seek the low places

Trade in that which you like and understand.
Be kind to your self.
Encourage your self in speech.
Govern your self in thought.
Work earnestly, skillfully and diligently.
In trading, be efficient, act only when the time is right.

Do not compare your self to others.
Above all, do not place blame when thing go wrong.



Market Trader Tao Eight

"The Wise trader is patient, always seeking the trend. Moving as water over the obstacles, have faith in the planning. Always be ready to act when the time is right."

NeboXian

____________________________

Nebo

Trade School For Beginners... Day ONE

BEGINNIERS ONLY .. S&P 500.. Class 101 ....Day 1

Between now And the First of the Year We will Study The S&P 500.

So by the time Things Really Get Rollin again ....YOU ...Will be ready to..

Trade The Market with the Wisdom of the TAO.

Now Most Big time Traders Will think this stuff is a Bit Hooky. But ....They Have already made all the money so there's probably not gona be any left for the rest of us...anyway.

There are Zillions of Bucks out there, and I'll Be Happy to Share the Crumbs with all of you.

OK Let's get started.......

WHAT is the Standard and Poor's 500 Index? (S&P 500)

Simply put...you average the value of 500 companies each worth over 10 billion Dollars...

It is used as a Weather vain to Gage the overall Health of the economy. Kinda like a daily Weather report.....And we all under stand Weather......It Changes all the time....But always stays in a seasonal range....just like the stock market....the Index is a relative number to the total of all 500 companies considered....right now the S&P 500 is at 1489.42

The S&p Report Doesn't mean much to most people, but if you have money in the markets.....its a way to compare every thing else..... a place to begin...a point of reference.

Now to the Chart.....This is a chart of the S&P over the past 70 years....

1. First Question class....which way is it going? ( up or down)

2. From 1930 to now, how many times did it reverse direction?( count #___ peaks some big some small) about 14 -16 times

3. what dose the top look life it's going to do next? (up or Down)

Fortunes have been made and lost on each one of those little Peaks and valleys.

_________________________________________

That's the lesson for today.....if you want to read more ...start with Market Trader Tao :ONE.

Market Trader Tao

Lesson 1:

"There are Thousands of Stocks , Thousands of Terms And
Thousands of Experts.

All designed for and desire to make Money yet desire less of your personal
participation.

in other words... it makes no difference to the
market if you're in or out, make money or lose .It doesn't care if it
knows your name or you know theirs.

Yet it exists for one single purpose......to make
someone MONEY

Herein lies the Pivot point the fulcrum if
you will...

For every dollar made, there is a dollar lost and for
every buyer, there is a seller.

These Two Spring from the the same source... "

NeboXian

LMT Relitive to S &P

This Is a Relative % of performance chart of LMT and S&P 500...
notice the Double top of the S&P as well as the great divergence of
price action sense Aug of 2006.....You don't stay that far ahead of
The S&p with out It catching up ...or you Slowing down...If the S&P
dose Not Move Higher out side of the Yellow Range Then It"s not
very likely LMT or Most other Defence Stocks will continue to
see significant Gains.

Charts: LMT

LMT is at a major resistance level as well as the beginning

of a diamond top formation, in addition, the trend
direction has stalled out.The trend began around
April 2004 and has had 4 major lifts.
As a rule The 5th is usually the final and
weakest peek prior to a correction (small reversal of trend)...
Lmt as well as many of the Defence Stocks Will most
likely continue to trade relatively
flat until early 2008...The next 6 months  will be
a good time for swing traders .
there will be plenty of volatility . 

Didn't President Bush get mostly "C"s in Collage?

Mathematician has President Bush all figured out.

From correspondents in Tehran

September 03, 2007 06:14pm

Article from: Agence France-Presse

PRESIDENT Mahmoud Ahmadinejad has sought to justify

his confidence the US will not attack Iran, saying the proof

comes from his mathematical skills as an engineer and faith

in God, the press reported today.

Mr Ahmadinejad told academics in a speech that elements

inside Iran were pressing for compromise in the nuclear

standoff with the West over fears the US could launch a

military strike.

"In some discussions I told them 'I am an engineer and I am

examining the issue. They do not dare wage war against us

and I base this on a double proof'," he said in the speech

yesterday, reported by the reformist Etemad Melli and

Kargozaran newspapers.

"I tell them: 'I am an engineer and I am a

master in calculation and tabulation.

"I draw up tables. For hours, I write out different hypotheses.

I reject, I reason. I reason with planning and I make a conclusion.

They cannot make problems for Iran."'

This video pulls it all together

it's ok...It's OK !... I SAID!... IT'S! ... OK?

This was published late Friday in The Guardian

It may not be a good idea to jump out there first thing Tuesday....give it a few hours and just watch..don't be like Butch and the Sundance Kid...


Barclays admits borrowing hundreds of millions at Bank's emergency rate· 'Technical breakdown' in clearing system blamed· Pound falls as news swirls around money markets Ashley Seager, Larry Elliott and Julia KolleweFriday August 31, 2007The Guardian
Barclays has been forced to borrow hundreds of millions of pounds from the Bank of England's emergency lending facility for the second time in a fortnight, it was revealed last night.
In a hurried and emotive statement after London's markets had closed, Barclays attempted to calm fears that it faces a cash crisis. Rumours had circulated all day that Barclays was forced to go to the Bank of England after the central bank said it had lent £1.6bn at its penal rate of 6.75%. It is thought that Barclays borrowed the entire amount.

Trading the Wedge

Trading the Wedge

By Toni Hansen

Description: This is a specific type of triangle that has a noticeable slant to it with higher highs and higher lows for an ascending or rising wedge or lower highs and lower lows for a descending or falling wedge. The characteristics detailed below apply to a rising wedge for a short setup, but can be easily reversed for a falling wedge buy setup. The wedge formation is typically a reversal pattern, meaning that the trend within the wedge itself will reverse when the trend breaks, although it can serve as a continuation pattern if the trend is new. For the purposes here, however, it will be discussed in terms of a reversal, with a rising wedge viewed in terms of a break lower and a falling wedge breaking higher.

Criteria: Uptrend with higher highs that break by a lesser degree than before, while the higher lows are still separated by greater differences in price, creating a triangle that slants higher when the upper and lower trend lines are drawn.

Entry: When the lower trend line breaks. Alternate entries are when the last uptrend within the wedge breaks lower or drop down to a smaller time frame and watch for a 2T or Avalanche and utilize those entry criteria.

Stop: Over the highs of the rising wedge, or over the highs of the base on an Avalanche formation if the wedge begins to hug the lower trend line after pulling off the highs before breaking lower.

Target: The target on the wedge depends on where it occurs in the larger trend. The main support levels in a rising wedge will be at each of the pivot lows within the wedge itself. When a downtrend is new and the rising wedge is a continuation pattern, then an equal move out of the wedge as compared to the drop into the wedge is the larger target.




Ideal 5 Tech Tools Traits:

Pace: Above average pace heading into the start of the wedge, followed by a slower trend for the wedge itself. In the case of a rising wedge this means a strong drop lower, followed by a slower rising wedge. Within the wedge itself it helps if the pace slows on the upside as the wedge nears completion. The best circumstance is when the security pulls strongly back into the lower trend channel from the wedge and then hugs that support just prior to breaking down out of the rising wedge. The reverse applies to a falling wedge.

Volume: The volume will ideally increase heading into the start of a rising wedge formation and then decline as the wedge progresses. If the wedge hugs the lower trend line from the move higher just before breaking, then that volume should be the lightest of the entire wedge.

Correction Periods: Higher changes for success when the highs of the wedge correspond to a correction period or the trigger for the wedge corresponds to a correction period.

Support/Resistance: In a rising wedge, it is good to have strong upside resistance, followed by a pullback to the lower trend line. The security then has higher odds for a strong follow through when it hugs that lower trend support just prior to breaking down. A lack of significant support, such as a previous low or congestion zone that would hit right away will also increase the odds for a successful move.

Trend Placement/Trend Development: A rising wedge is common in a downtrend as a correction within that larger bear move. It can also be located at highs as the last move up within a larger uptrend before a larger correction off highs takes place. A rising wedge is higher risk as a short setup when it occurs at the beginning of a new uptrend, since momentum can be building and any break lower at that point out of the rising wedge can easily be just a small base before the wedge then breaks to new highs.

Rising Wedge Examples

Example #1: Occidental Pet. Corp. (OXY) Rising Wedge – A Short Setup




Pros on Rising Wedge in OXY:

1. OXY made only slightly higher highs, but significantly higher lows as it rose, creating a narrowing channel for the wedge formation.

2. After taking only 15 minutes to drop off the 10:30 ET highs, it then took three hours to return to that level.

3. The prices from the start of the 10:30 ET decline created a strong price resistance level.

4. Volume was the strongest at the start of the rising wedge and then declined throughout most of the upside move.

5. The rising wedge had three waves of upside within it, which is typical of an exhausted uptrend, making is easier for the stock to form a larger correction on a pullback following the third waves of buying that took place coming out of 13:00 ET.

6. The third move higher was much choppier than the prior two and began to hug the lower trend line and test it repeatedly while starting to avoid the upper end of the channel.

7. Volume increased as the wedge broke lower, providing confirmation to the setup.

Cons on Rising Wedge in OXY:

1. The move out of the rising wedge did not correspond directly to any correction period even though the 14:00 ET one was approaching.

2. OXY is a more volatile stock with a lot of overlap from bar to bar which created a somewhat larger stop since a trader could not drop down and short an Avalanche on a smaller time frame as the trigger to the wedge breakdown.

Example #2: ES Rising Wedge Pattern Intraday – A Short Setup




Pros on 2 Minute Rising Wedge in the ES:

1. The large momentum heading into the wedge was on the downside. It then took 90 minutes to just regain the losses from the gap and immediate selling out of the open.

2. The rising wedge had three waves of buying in it, which is typical for a trend development, creating an exhausted trend before the wedge broke lower.

3. The volume decline throughout the rising wedge and did not increase at all coming out of the last pullback into 10:45 ET, indicating that despite the strong upside, there were not a lot of determined buyers present.

4. The second high in the wedge was only slightly higher than the first and the third high was comparable to the second, whereas each low was significantly higher than the last.

5. The final pivot high within the wedge took place heading into the 11:00 ET correction period.

6. As the wedge hugged the lower trend line leading into the second setup, the volume declined even further, despite the correction to the selling into 11:00.

7. The pace of the moves out of 11:00 and then along the lower trend line indicated a bearish bias since the upside was much weaker than the downside.

Cons on 2 Minute Rising Wedge in the ES:

1. The momentum within the wedge did not slow on the upside until the stock had already traded under the lower trend line, so those taking a trend line break as an entry would have had to have sat on the position for awhile before the stronger selling continued.

2. Volume did not increase much on the selling coming out of the wedge to provide strong confirmation for the breakdown.

Ber blulFFuktard

How Much Money did We Recycle Last Week?
It's not easy to be a $%@*#$! Green Tard

Bear-bull-tard? vs Recycled Money?

Here are some new Words for your Webster.

I was inspired by Tim Knight's bolg Slope of Hope with the word "bultard "to help describe the state of the markets in the past month. Well of course, I felt like this new lexicon needed some friends. So here they are.


Ber-bul: .....little fuzzy creature .....chases anything green.
..looks a little like a gerbil on a wheel..

Ber-bul-tard: bear/bull/trader....a personal mental and emotional state of
utter dumb SH*#$!!.


Ber-bul-tarded: the feeling of what the Hell just happened?


Ber-bul-fun-tarded....the act of staying at the party to long and can't find the bathroom.


Ber-bul-fre-tarded: ......the act of ..Throwing a free beer, all you can drink party....and charging $20 to use the toilet....it's a little hard on the carpet, but it's a great way to get your emptys refilled....


Ber-bul-stop-tard....Refilling beer bottles sure keeps the bar tab under control.


Ber-bul- tech-tard:......Success is the divergence of Refills vs Flushes


Ber-bul-gre-tarded: the act of showing up.


Bul-tard: wishing to get up off the floor.


Ber-tard: hoping no one will step on your fingers.

_________________________


And the Grand Daddy of all.

Ber-blu-tard: waking up on the floor with empty refills in both hands
and f!eeling like a Ber-bul-fuk-tard.



Cheer up! You helped the economy by recycling your money...
So, dose this make us ..........Green-tards?



We all have to get back to work first thing Tuesday ...oh my....

neboxian.blogspot.com