Price Action History Repeats Itself - Market Update
Posted on November 19, 2010
All prior market price action tells a story of how we can gain an edge within our trading plan for future trades we are analysing. The major resistance in April has definitely helped us with our trading this year and allowed us to maximise our profits in our last set of trades. This April's high showed us the point in which the bull market weakened and the relevance of this, is the price action moved below the longer term Moving Average.
Because of this price action, at Stock-Market-Strategy.com, we can view our historical data and evaluate levels of support resistance which we have been highlighting to our paid members for some time.
Profit from Understanding Historical Price Action
Historical chart pattern analysis helps you understand key areas where historically profit will be taken and also stops you from jumping into a trade that is not there. Because of our technical analysis we can advise our members through our stock market update videos. These highlight why we are not interested in buying at these levels and it gives a clear understanding of how we think as traders.
This is our style of trading and is the way we trade our trading plan. However, this is not to say that you cannot trade this type of market but you really have to decide what type of trader / investor you are. We are traders and buying on strength is not what we do.
The current price action is showing a retracement after coming out of the strongest two and a half month periods since March 2009. We really don't consider this to be a big enough pull back to shake out the weak longs for us to be looking at trading our Endurance Portfolio. We did mention this week to our members that we could be considering some shorter term Rapid Portfolio trades if the setups present themselves.
From historical data analysis small pull backs equate to small rallies. This is not always the case but as mentioned above, coming off one of the strongest periods the SP-500 has had in over 12 months, you have to be weary when entering a trade. We consider break out stocks to be extremely low value trades in these market conditions.
On the 60min chart this week we did see a nice base form which was the platform for yesterday's rally. This could be short lived as pointed out above and we could quite possibly see a retracement back to the longer term daily MA which is 150MA in our case.
As far as we are concerned it's sit on hands time until we see some price action. It is at this time that we can evaluate and achieve a better risk to reward on our longer term trades and if we see some pocket money to be had on the Rapid Portfolio, then we will take it.