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Strategies & Market Trends : Charts!
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To: Jim Battaglia who wrote (35)5/28/2006 10:47:00 PM
From: Tom Swift  Read Replies (1) of 75
 
Long-term, I have a bearish outlook - I think a commodity bubble is forming that will result in fairly high inflation that will cause China to sneeze.

What I think I am seeing over the past couple of years is hot money rotating through the sectors at an increasing rate as money managers play "follow the follower" and increasingly use program trading to scalp small profits on intraday moves.

That said, I am mostly interested in identifying swing trades in highly liquid stocks and ETFs.

The system I am working on is based on the 5-day RSI and the 5-day SMA.

Simplistically stated, if the RSI(5) is low and the closing price goes above the 5-day SMA, buy the next day and hold till the price closes below the 5-SMA.

There is a certain amount of whipsaw loss related to this system, but overall, all of the good runs I have seen in the past couple of years for "real" securities would be captured by this somewhat objective system.

Techs signaled a couple days ago - I am a little vague on when right now cause I was travelling and in many different time zones but there is a profit to protect on the 5-day SMA signal from both the DOW and the Qs at this point from that signal.

I see techs going up to test upside resistance and failing - but what do I know - the hot money makes it difficult to predict.

-Tom
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