This entry was posted on Tuesday, March 20th, 2007 at 9:50 pm and is filed under chart patterns. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Today while sitting at my screen trading I saw one those absolutely clear and concise patterns on the SPY 1 minute chart that I took a screen shot. In Japanese candlestick terms those are referred to as “shooting stars”, but before I knew what Japanese candlesticks were I used to call them “church steeples” and if they were at a bottom I called them “tent stakes” , as a group they were generally referred to as “stickout bars”. Those names have kind of stuck with me through the years and though probably technically incorrect, thats what they look like to me, and they can be quite profitable if used properly.
Stickout bars for me offer opportunities when they are as clear and concise as this example. Todays were. Clearly resistance was coming into play as sellers stepped on price rapidly to send price back to the low of the bar in quick fashion with rapid and hefty volume action. But the opportunity not only lies in going in the direction of those sellers, but also if the tops of those bars do get taken out they can become solid support levels for future trades. These become important lines in the sand that I keep an eye on. Not only with intraday bars but with any timeframe from daily to weekly to monthly.
As you can see subsequent action throughout the day wilted to the resistance and created solid swing levels for the future going into tomorrows FOMC meeting.
Speaking of, If your a gambler and like to let trades fly around the FOMC release then this may be strategy is for you (not for me).
Also if you have seen some of the intraday videos I recorded recently you can expect more to come. I am working out some details as far as which video site to host with and the format to save those videos in. I created a page where I am going to load these so we don’t clutter up the front page on the site. You can see that page in the upper left hand side of the page near the email link. I posted one video as a test. I will try to get a new one recorded tomorrow.
Have a Great Night!
Dave Johnson