Tuesday, March 24, 2009

And Now for Something Completely Different...

Hey guys! I just found this cool, new thing! It's called, Moving Averages!!! It's SOOOOOO cool!

Ok, seriously. I've been placing EMA's in my charts for years, now, but never really used them. I just put them there because some big-shot money-makin trader told me to a while back. Now, thanks to dshort.com, I've realized a little better how to use them to time entries and exits. Also, checkout iBankCoin.com for true, expert knowledge.

I've put up a 10-MA and 12-EMA on my charts and started browsing around. Visual back-testing has helped me come up with a few clues on how to use them, so I'll be trying it out in the near future.

With that in mind, I think I am ready to call a local top to this rally. XLF is breaking down, and I'll be looking to get back into FAZ tomorrow after the morning pop (Stewie, are you reading?).

20 Day XLF. I see a Megaphone Pattern expanding for a week now, combined with declining trends in MACD and RSI. Blue EMA curve is also leading a bearish sign, and I'll be looking for confirmation after tomorrow's opening.

5 Day XLF. I'll be watching for price to not penetrate the Blue EMA line, and for that line to lead a decline. There's a good chance that XLF will break through the channel support around 8.75.

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