A blow-off top is a ballistic run where a stock makes its final, ballistic move in a long run and then rolls over and gives most of the final run back and even more in some instances. It is thus a good thing to recognize when it occurs as it can cost you some big […]
This is a great question. We have had many subscribers ask if they can “buy late” into a stock or option if the stock has moved beyond a designated buy point. We make the same point as you about chasing it too far up: we time our plays in order to jump in at the […]
The classic double bottom pattern is one that typically forms in choppy markets. It is a quickly-developed pattern at its best, and can result in explosive breakouts. It is an exciting pattern because of the extreme price swings and the speed at which it can sometimes form. The description of the pattern fits its name. […]
Yes, you can make money in the stock market by learning what the important signposts are. Your question is a good one, and we will go into detail in more Subscriber Questions over the next few weeks. Basically what you are looking at is the amount of stock that is for sale versus that amount […]
Over the years, playing options has taught us that the trend and time are your friends, particularly when the market turns choppy as we have seen of late. With options, time is very important because options expire. Thus time works against you on options you buy, and you need time. Time to let the play […]
Excellent question. It is easy to get too focused on volume for a particular session. As with everything you have to fight to avoid getting tunnel vision, to avoid getting too focused on any one aspect regardless of its rank in importance. The key to a stock moving higher is big money, i.e., institutional money, […]
One of the most important things to understand in the market is where the big money is moving whether that be into or out of a stock in particular of the indexes in general. The big money tries to accumulate shares quietly as in during a long price base, but there are times it moves […]
Breakouts have about a 50-50 probability of coming back to test their breakout point after making the move. The stronger the breakout move, the less likely it will make a full test, but that is not always the case. In a weaker market there is more often a test. If you get a test you […]
Great question. We have stated more than once we do not like gaps higher as they are more of a crapshoot. Early enthusiasm tends to wear off, and a gap higher can come right back on you. Unless the market is still in good position to rally further and the stock is in a strong […]
First we look at market conditions. Is the market uptrending or downtrending, is the trend strong or modest? If we are playing upside in an uptrending market ourtargets will be different from an upside play in an overall downtrend. In the latter case we will shorten our initial targets simply because good moves attract short […]
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