Interesting Chart Patterns To Monitor In Coming Days...

[MR]

I have a good friend who emailed me this question:

"I have a technical question for you, why did Goodyear (GT) stock trade almost four times the normal volume today and still only change in price a few pennies. I know the simple answer is that there were an equal number of buyers and sellers. But it's not normal to have such high volume without a big change in direction, so what's your technical analysis say? I'm just curious so no hurry."

Is there anyone out there who can help me answer it? I have some ideas on volume, but am not confident I can answer this question accurately... any help or insights here would be greatly appreciated.

Thanks, marc

[gspiker]

Hi Marc!

IMHO Often when you see this with no major news (I assume there was no news but didn't look) and no major trend to reverse it is either because:

1) There are a lot of options positions at a strike price that the MM's are trying to defend (so they don't have to pay out the options). This is even more true at option expir...but we are at option expir and there are no 9.00 strike price options for GT

2) It is an institutional swap. This seems to be the case. If you look at volume and sizes it looks like there was some major money involved...and it looks like this started mid to late Monday.

Thompsons I-Watch also seems to confirm that big money had a lot buy and sell interest today...

Not sure this says which way it will go. If you could determine for sure who was selling and buying and for whom it may help.

My .02

Garth

[theplumber]

http://biz.yahoo.com/rc/040628/manufacturing_goodyear_1.html

[jims_id]

Volume

As gspiker alluded to, heavy volume probably indicates heavy intitutional trading. When mutual funds want to buy or sell a stock, their footprints are as notable as an elephant jumping into a bathtub. The real question is, once one becomes aware of heavy trading in an issue, is the trading positive or negative from a technical standpoint? The best volume based study I've found is Chaikins' Money Flow. The interpretation is as follows:

"Market strength is usually accompanied by prices closing in the upper half of their daily range with increasing volume. Likewise, market weakness is usually accompanied by prices closing in the lower half of their daily range with increasing volume.
If prices consistently close in the upper half of their daily high/low range on increased volume, then the indicator will be positive (i.e., above the zero line). This indicates that the market is strong. Conversely, if prices consistently close in the lower half of their daily high/low range on increased volume, then the indicator will be negative (i.e., below the zero line). This indicates that the market is weak."

[MR]

Thank you all for your input. Really appreciate it. I sent my friend a reply late last night with what I thought it might be, but wasn't very confident I was correct. All your input is very helpful, will forward it to Mike. It is very nice to have you all here... thanks again.

Marc

[MR]

An acquaintance called a few days ago and asked if I thought CAKE was a good Type 1 Sell. I said, "Yes, it had good qualities." So far, so good it looks like....

[pj909]

Money Management and Exit Sstrategy

Marc,
RE GM, what are you using for a target time and price and a stop? The MOB at 63 by Jul/Aug and the w4 low at 43 or more agressive stop.
The minor w1(d) high on 5/27 is 46.05 and the current 200, 50 day MAs are hovering around 46.50. (Which also closes a gap from Apr.) One concern is the advance was held by the w4 ellipse .
Actually, the pattern looks more like an ABC than a Type 1 but I'm not sure about the MOB time targets.

[MR]

Try taking a Normal Ellipse from 5/17/04 low to 6/23/04 high and will focus on its arrival. If really aggressive, you could use this Short Ellipse as guidance. It is a very simple approach, yet it can be very effective.

If the Normal Ellipse does not hold upon arrival, then I suspect I am wrong about GM's near-term potential to rally more before this year is up.

I sold my GM for a $600 loss, but am still planning to get back in it somehow, but this time with a better risk/reward entry. I thought I was buying into a breakout beginning Wave 5 but it did not follow through immediately.

[MR]

One more idea with GM and ellipse idea... you could activate the 'Long" Ellipse setting as well for one last idea if trying to pick a possible swing move..... if the Normal does not hold, it could provide one last alternative idea before giving up totally on my earlier idea. For dynamic swings, the Long ellipse can sometimes be helpful. I am still out of GM.

[MR]

Could I ask for some help? I have been doing research for a good friend of mine.

He wants to find the top 5 companies he can invest operating in Europe in the recycling and waste management sector?

Am finding a lot of information, but really could use some help discerning the best of the best. Specifically interested in companies operating in France, Germany, Belgium region.

If anyone who reads this has any insights, I would be grateful in learn more from you.

[MR]

Hi, just a little update on this CY Short idea posted earlier ....

Originally posted by MR - Posted: 06-14-2004 11:38 AM
While I was watching President Reagan's funeral last Friday I came across an aggressive Type 1 Sell setup on CY daily chart. It is a little bit away from my optimal sell entry now. If I had seen it three days earlier I would have shorted it there, Stop above Short Ellipse, top of a MOB, approximately $16.50. My target would have been $12 or lower, with the W5 target realistic. Don't know if this helps anyone, but who knows, maybe later if you watch it, you might be able to make something still out of this idea?

[DuaneG]

Is anyone else seeing this? Broke the 34 day MA, and sitting ever so gently on the 50. The rally over the last hour has been quite good for a few points, question is.....how will we close? Anyone?

[MR]

The close will be a little weaker then when you posted the chart, but not at the low of earlier today... is my guess.

[MR]

I might also add, even if we don't close lower near today's lows, I strongly suspect we are not ready for any kind of a strong rally yet.....

[MR]

Hey, Jim-- just between u and me-- remember our discussion here in earlier posts, approximately a month ago? So far you have been really on top of things... cudo's (congrat's) to you... marc