Tuesday, November 13, 2007

Counter-trend rally

Today was a low volume counter-trend bounce that is giving everyone a chance to unload or get short. The selling isn't over with a single big day, so look for a bounce up to the 20 day or 50 day moving average and think about getting short. I know I will.

Despite the huge day today, there were only two signals given by my recently devised trading rules. First we have a breakdown in Core Labs (CLB). It is holding its 50 day moving average, but I suspect this has more downside.

On the bullish side, Priceline (PCLN) flashed another buy signal today. This chart is simply amazing given the current market conditions.


EFB said...

could you elucidate on your recently developed trading rules?

Paul Stiles said...

You can find more on a previous post: http://novicebear.blogspot.com/2007/10/volitility-breakout-using-ibd-100.html

Paul Stiles said...

I don't want to go into too much detail because I'm starting to talk to possible backers.

The system is basically a volatility breakout with some short term trend and volume filters. The real key to the system is the choice of stocks to follow. I would read up on this by checking out The StockBee blog.