Thursday, February 5, 2009

Here is a new chart for us to discuss... RTP

This recent pattern is called a saucer. I used well understood pattern power to take some good profits. I managed to buy my shares during the low part and ride it up until today. Life is good!

Actually, it wasn't entirely a bed of roses. I was very busy trading the shorter time frames and not focusing on the bigger picture. When the market took a dive, I would sell, even if at a loss, just to protect the principal. Then, when the market completed its little tizzy fit, Price would improve and I'd get back in, often at a higher Price. This is called buying high and selling low.

More recently, I decided that a Market Fu master would not behave like that. With my long term goal of Mastering Market Fu in mind, I began to do some mental exercises. When the mind is not focused on a bigger picture, it is justifiable to exit a winner early. When the mind is calm, little turns inside of a powerful up-trend are easily recognised as noise.

While I have not yet perfected mental stillness, I have been well rewarded for the progress made.

Oh, by the way, I'll be keeping an eye on this stock for another reason... another chart pattern.

I am expecting a small Price pull back tomorrow for reasons discussed in my future Bollinger Bands article(s). I am not expecting Price to fall below today's open. If Price falls below $100 and closes, then something very very bad must have happened. Once Price has recovered from this pull-back, I'll be looking for at least a week of raging bulls running and crashing through anything that resists them.

The larger picture, just barely visible in the accompanying chart, is possibly the formation of a "W" pattern. W's (more-so than the saucer) are well know patterns. Since this current saucer represents... ummm... 119 - 79 = 40 dollars of movement, (wow) The completed pattern should be at about.... ummm... 119 + wow = 160 dollars! Another $40 dollars of up-age could be possible.

Now, lets check that... On a larger time-frame, has the stock ever been that high before? On the four year, weekly chart, we see that in May of 2008, Price was a whopping $558 and change. So, is it possible to make $40 on this one trade? Easy! I'll take a bunch of those please.

I'll be looking to re-enter tomorrow or Monday. Then I'll try my best to stay calm and focused on the bigger picture through the little setbacks the market occasionally experiences.


  1. mike,
    On 1/28 I told you I wasn't bullish RTP. I spoke absent mindedly and too soon because though RTP is on my watch, I didn't check the data before speaking.
    So from 1/28, it went from 90ish to 85ish to now 110ish.
    Lighter than vol 2/5. Am I right in saying resistance @ 119ish if the bulls continue?

  2. I'm totally with you... the saucer has not yet completed. My sell-off today was a Bollinger Band play; since the volatility of the $119 peak, the bands have contracted some. Today's rally is bumping its head on the upper band. This is not an ironclad sell signal, however, it is a strong warning to not buy at this time. I am being careful (possibly to excess) and locking in the profits.

    Thanks for reading!