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| The author shows how to use the stochastic failure, twice in Aug. for AMGN, to short or play the short side on these weak signals. MACD too. It is tough to find classic signals because there are always minor variations, lots of cross currents that muddy the signals. It is very difficult for traders to manipulate these very large caps and so the signals tend to run true to form. I am sure the front running programs used by GS and others exacerbated the selloff from 65 to 58 after a major gap open buy signal that was never filled, making it a continuation bullish gap signal. The front running programs now inflate the moves up to highs that should not be reached and the moves down to lows that should not be reached in an efficient market. Of course these programs make the market inefficient which is great for traders but lousy for investors. Unless the investor has the discipline to buy on weakness and sell into strength. Most small investors and surprisingly many big investors due just the opposite. |
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