EWZuber
1,373 posts
msg #30968
- Ignore EWZuber |
2/5/2004 2:24:11 AM
nktanaka
I think you have a pretty good handle on it.
When Weekly chart stochastics are oversold and the fast line has crossed below the slow line it indicates that typically there is a longer term distribution phase of the cycle beginning.
If the daily chart stochastic cycle becomes oversold at the same time, it indicates that a shorter term accumulation phase is likely beginning.
Typically the Weekly chart influence is longer term, more sluggish in action but more influential over the time frame involved. In other words the fluctuation from high to low over the entire cycle will be greater than the shorter term daily chart fluctuations but will take a longer time to complete. ( Same with Monthly chart. )
Usually what will happen is the chart will rise to test resistance on the Daily chart and confirm it at some point then drop to test a support area on the Weekly chart. Like the 15 or 25 Week Moving Average or possibly some long term support like the 200 DMA.
In this case the NASDAQ moved up to test the 25 DMA as resistance and bounced down confirming it for now then dropped lower to test the 15 Week MA.
If you look at a close up of the Daily chart ( about a 1 month chart ) you will see how the NASDAQ formed what has been called a 'head fake'. What it really is though, is the effect of the Weekly chart in distribution keeping the daily chart from effectively going into accumulation. This creates a deeper and longer distribution phase on the daily chart.
Until, that is, the two time frames are once again in phase again in accumulation. When this happens it will be our best shot at a move above the last cycle high. ( 2153.8 in this case ).
Since the NASDAQ was so extremely oversold back in Oct. 2002 the long term Quarterly chart was also oversold. Back in Oct. 2002 the accumulation phase began when the fast line crossed above the slow line in that Quarterly chart time frame. This cycle can last a long time. This has been driving the market higher in such a fashion as to mitigate all the distribution phases in all shorter time frames.
For a real eye opener look at a 10 Year ( or longer ) Yearly chart. In this time frame the fast and slow line are just converging indicating a possible start of a really long term, possibly several year, accumulation phase.
You can also see the distribution phase began in early 2000.
That said however, notice that the Quarterly chart is becoming overbought and the fast line is starting to converge with the slow line. Because this is such a long term cycle the effects will not be immediately felt but I suspect we will see a gradual leveling off of the rising curve.
Just noticed that today NASDAQ tested an 11 month Supporting trendline. This is an extremely important development, IMO. If this is broken on the daily chart ( on a closing basis ) it is very significant.
If it is broken on the Weekly chart ( on a closing basis ) this has longer term implications.
On a Monthly chart is extremely significant, longer term.
Notice this is all happening as the Quarterly chart stochastics are coming together in an overbought condition. Things are looking a bit toppy here long term.
JMHO
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EWZuber
1,373 posts
msg #30971
- Ignore EWZuber |
2/5/2004 12:48:12 PM
wallman
Thought to look at IECE today.
Looks like its testing the 50 WK.MA as support and looks like buying volume is coming into the stock.
JMHO
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EWZuber
1,373 posts
msg #30972
- Ignore EWZuber |
2/5/2004 3:03:48 PM
So far todays action in the NASDAQ has just been a testing of resistance. Sellers sold into short term strength from the oversold bounce. JMHO
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EWZuber
1,373 posts
msg #30979
- Ignore EWZuber |
2/6/2004 12:57:14 AM
CRUS...Looks about ready to go. It has bounced upoffof the 25 WK.MA. Missed that so waiting for a break of TL. Res. on the hourly chart w/stochastic confirmation.
ZONS...a screamer in an oversold condition on Hourly chart and sitting just a tad above support at the 25 HR.MA.
RCO...Very oversold on Hourly chart and trying to hold support at the 50 HR.MA.
Don't think its quite ready yet as it is in the middle of a very mellow wedge pattern but stochastics on Daily and Hourly chart look nearly perfect for a move.
Wedge TL Sup. @ $0.73 & Res. TL @ $0.81. Good liquidity. I really like this Daily chart.
ALL JMHO
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moonshadowus
1 posts
msg #30983
- Ignore moonshadowus |
2/6/2004 5:34:22 AM
EWZuber 2/5/2004 2:24:11 AM
very easy to understand and very informative for me, thanks, im a new subscriber of this site. moon
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EWZuber
1,373 posts
msg #30984
- Ignore EWZuber |
2/6/2004 10:03:53 AM
Picked up CRUS @ $7.28 as it became oversold on the 5 min. chart.
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EWZuber
1,373 posts
msg #30988
- Ignore EWZuber |
2/6/2004 12:55:02 PM
Sold CRUS @ $7.64. The 1 Hourly chart was overbought and up against a resistance trendline @ $7.65. The 5 minute chart was reaching overbought around 85 for the second time near the top of the hourly chart cycle and overhead supply was still plentiful.
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EWZuber
1,373 posts
msg #30989
- Ignore EWZuber |
2/6/2004 1:03:04 PM
Looking at GLGS again. Played it yesterday from $1.11 ~ $1.17.
It's looking very oversold on hourly chart at a stochastic value of 0. Selling volume is all but gone.
The stock has already confirmed support at the 25 Week MA.
JMHO
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travlr
80 posts
msg #30994
- Ignore travlr |
2/6/2004 4:30:47 PM
EWZ,
Hey there. I get amazed at how different our charting sources read. I've been using eSignal and find that your analysis' sometimes differ, in a big way, from what my charts read.
On your last post(2/6 1:03) you saw Hrly Stoch @ 0, and supported by 25WMA (GLGS).
On the Hrly stoch You must have been refering to the Fast(5,3), because I have the Slow (5,3) at 10.
And the 25 Wkly SMA.. I have the entire Wkly candle BELOW, w/ the open of that candle "kissing" the 25 Wkly SMA as resistance.
I've made these observations several times in the past, as well as, noticing that my quotes from eSig and IB will also differ. Even though I realize the delema of different sources providing different data, it simply antagonizes wanting to "Be On The Same Page".
Later,
travlr
P.S. Nice call on CRUS... you nailed that entry!
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nktanaka
5 posts
msg #30999
- Ignore nktanaka |
2/7/2004 2:12:55 AM
EWZuber....Thanks for always posting a detailed response to my questions. Although I don't post a lot, I'm always on this board reading your thoughtful insights and have hopefully learned a lot. Hopefully this will equate into profits.
nktanaka
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