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Posts Tagged ‘technical trading’

DJIA Chart: Classic ‘Head and Shoulders’

Posted by Larry Doyle on August 11th, 2011 9:01 AM |

Recent market volatility is clearly unnerving.

I believe the volatility is exacerbated by the general decline in broad based participation in the markets over the last few years. Additionally, the growth in derivatives, both within the equity and fixed income markets, has served to accentuate the swings.

I described these swings and the accompanying spike in volatility as the equivalent of an Adult Swim Only a few days ago when I wrote, What Caused the Market Meltdown?.

What are the implications for a market in which there is a lack of broad based participation?

To an ever increasing extent, professional traders study the charts and perform technical analysis to determine likely levels of support and resistance.

On that note, let’s navigate and review a chart of the Dow Jones Industrial Average which takes us back 5 years and provides a fabulous view of the recent cliff dive along our market landscape. (more…)

“You’re Playing with Sharks”

Posted by Larry Doyle on July 22nd, 2010 6:20 AM |

Is it safe to go in the water? In other words, is it safe to play in the markets under the current construct? Do small retail investors truly stand a chance against the ‘big boys’ on Wall Street running high powered algorithmic trading programs and assorted other high frequency trading mechanisms? Are fundamental traders being thrown around amidst the ‘high waves’ and ‘strong surf’ pounding the shore?

No doubt, the scene on Wall Street has changed dramatically over the years. The onslaught of high frequency trading complete with a wide array of ‘bait and tackle’ such as flash orders, dark pools, naked access, co-location, and much more make it extremely challenging — if not downright daunting — for those who believe they can navigate these waters with simple ‘rod and reel.’ (more…)






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