Friday, October 10, 2008


There were 22 new highs and 4,340 new lows made. We had no breakouts and we had hundreds of breakdowns. If this keeps up, I’m going to have to change the title of my articles to ‘Today’s Breakdowns’. That’s it. No point in having the word ‘breakout’.

I’ll do a separate article on today’s market action and what can be expected as early as Monday. I think we have a good thing going in terms of the technical signals that I see.

Here are breakdowns with comments for future reference. Since the vast majority of stocks are already in free fall, be aware of these patterns in the future because they are all the same.

Don't forget to try out the Free Trend Analysis. It's FREE, so give it a shot!


Anonymous said...

Hey Lee,

I have a few question about your trading strategies.

1) Do you pick one stock and have the chart set with 5 to 10 days SMA ( so when the 5day cross over 10 you go long, vice versa) throughout the whole day?

2) Do you use a one day 5 mins chart?

3) When you trade a stock, do you pay attention at the fundamentals at all?

4) Since stock goes down faster than they rise. Do you think it's always good to shorts stock who just reported a bad earning?

John C. Lee said...

Hi (you can call me John),

No I just rely on the patterns themselves. Any stocks nearing the 50-day or 200-day MA, I definitely put those up.

I do use them. For indices, I also use 3 and 5-day charts. Individual stocks, I also use 1 min charts, but if the days are volatile, I stop using the 1-mins...they'll drive you crazy.

No fundamentals..a trade is a trade, and most of the times, I don't even know what the company does (that I'm trading). Who cares, as long as your banking.

Depends on the pattern. Typically, bad earnings form breakaway gap downs. I don't suggest shorting right there because there could be a dead cat bounce (DCB). I recommend shorting at the top of the DCB.

I love to short, and I find it more enjoyable than going long.