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Gold/Mining/Energy : Big Dog's Boom Boom Room

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To: Broken_Clock who wrote (101791)	5/31/2008 4:03:28 PM
From: chowder	Read Replies (2) of 206085

>>> Do you use trend line/support in those trades set ups? <<< I use trend lines, but not in those situations where I'm buying a 3-5 bar reversal. Here's what I'm looking for in a 3-5 bar reversal. I want a "rising" 20 day moving average "above" a "rising" 50 day moving average with a "comfortable distance" between the two. This indicates a strong uptrend! Then (not than), I'm looking for price reversing off an all time high, a 52 week high or (a 30 day high if trading very short term.) "Most" of the time when price pulls back off an all time high, it pulls back due to profit taking. It isn't consolidating because of overhead supply coming to market. Since there aren't any shareowners at that time who are losing money on their position, we don't have any supply to offset. Price is being demand driven at that time. "Most" of the time, when you get that 3-5 bar reversal, you will then see those who missed the run up enter the market. They were waiting to buy the correction. Now, if price is pulling back because of a news related event, or something fundamentally wrong has arisen, then all bets are off. You leave it alone.

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