Overshoots and Overreactions
One of the features of financial markets is that they often react to new information with emotional volatility, and overshoot extremes. Understanding this element of price behavior can give us…
Free bars: little patterns after big moves
Bands or channels are usually set up around some type of moving average. They define what is normal for a market, so excursions outside the bands are potentially interesting. There…
This is how breakouts work: lessons from the S&P 500
Just a brief blog post here to share some pattern lessons from the S&P 500. First, context matters, and that context is: Bullish because of the existing uptrend from the…
The Anti: a trading lesson from ROKU
Stepping in front of a strongly trending market is one of the best ways to lose money. But trends do end, and sometimes those endings can offer great trades. How…
A Trading Lesson in Pullbacks
I have found, over the years, solid results from trading a handful of patterns put in the proper context. Perhaps the most useful of those patterns in the pullback, which…
Chart of the Day: Not a Bubble
The media, both major and social, seems to be filled with people proclaiming that stocks are in a bubble. Bubbles do occur, but the current market shows no signs of…
Too Much of a Good Thing
A simple pattern often marks the end of trends.