Twitter Weekly Updates for 2012-01-29
- Using Sequential Signals to Scan for Classic Support and Resistance Levels : http://t.co/o6l3tEIh #Demark $$ $EL #
- The Sequential Scan: http://t.co/lUg8QzHn #demark $$ $csco #
- Breadth, Price Patterns and Sequential Scans: http://t.co/VFN2TK8w $$ @traderblast #
- Twitter Feeds on Netflix Prompt Stock Service – Bloomberg http://t.co/0ZUyPqir via @BloombergNews #
- Bearish Market Breadth: Nasdaq 100: http://t.co/uyWHC3lt $$ $qqq #
- Interesting TD Sequential backtest article. http://t.co/8rfweHhb #demark #
- Sequential Breakdowns: Trading Demark signals with the trend: http://t.co/DEtr4k8g #demark $$ $quad #
- 10 Thursday AM Reads http://t.co/BhG1GbqO #
- A blog I respect a great deal – stockbee: Money is rotating in to new stocks and new leaders… http://t.co/YEHtzvey #
- Russell 1000 Sequential Breakout Watchlist: http://t.co/0JZEu36h $$ #
- $CSCO is testing its breakout level point. If it holds on light volume, a possible buy #
- Download S&P 500 Sequential Sell Data: http://t.co/S96R5be0 #
- I wonder why Tom O'Brien and the http://t.co/fmcw192i crew don't use the hashtag #tfnn Guess I'll start. #
Download S&P 500 Sequential Sell Data
I added a new feature. You can download this weeks Sequential Sell data for the S&P 500 below. The file contains highs, stop loss, and risk data. Check it out and let me know if you like the information.
Combining Sequential Signals and Gartley Patterns
I saw these two charts in my scan of the Russell 2000. Both are examples of how I like to combine separate signals, which in this case is a combination of a Sequential sell and a bearish Gartley pattern.
So would I trade either of these? No, because the volume is not confirming the signals. Ideally, I would like to see volume shrinking at the highs and both of these charts have very strong volume near the highs. Sure, the trade might work, but I like to have volume confirming all of my bets. This link is a video of Tom O’Brien and it shows how I like to use volume with pattern recognition.
Russell 1000 Sequential Breakout Watchlist
This gallery list of Sequential breakouts was taken from the Russell 1000.
- JCP
- EL
- DHI
- CLR
- LSTR
- DOV
- DNR
- CNW
- JBL
- FFIV
- INTC
- SRE
- FRT
- MSFT
- DTE
- LH
- KLAC
- CBG
I have also included an output list of all the Sequential Breakouts on the Russell 1000. I have also included the risk associated with each stock. The number is the percentage above the breakout level. -10 means that the current price is 10% above the Sequential Sell stop loss. I use the negative sign because I am typically looking for prices that are below the stop loss.
Symbol Sell Risk
BXP -0.01
RPM -0.28
SCG -0.36
SCI -0.36
CBG -0.37
KLAC -0.46
LH -0.52
D -0.59
COH -0.64
DTE -1.38
PRGO -1.82
MSFT -1.93
FRT -2.05
SRE -2.08
IBM -2.08
INTC -2.36
FFIV -2.67
NKE -2.70
JBL -2.83
CNW -2.87
DNR -3.12
ASBC -3.38
MSM -3.43
EWBC -3.44
PLL -3.81
DOV -4.31
WPO -4.31
LSTR -5.38
STR -5.39
FTI -5.44
CLR -5.64
DHI -6.80
NI -6.93
AMT -7.43
EL -8.43
VRSK -9.53
JCP -10.81
SWI chart
Thought I would try out Worden’s widget. I picked SWI because I own it and was disturbed by the action today. I hate it when long positions reverse like this. On the good side, I bought the QID yesterday as a hedge for the expected pullback.
Trade to watch
Here is a trade to watch. The equity is ELON and it broke below the Sequential buy stop-loss in early November. It is moving up with very light volume and if that continues, I would short it at 6.12 with a short stop-loss at 6.50. Here is a breakdown of the money management plan. It assumes a 100K trading stake and putting 1% of that capital at risk.
Sequential Breakdowns: Trading with the trend
The Demark methods are counter-trend by nature and should be used that way. However, it is also possible to use similar methods to trade with the larger trend. I like to call these Sequential Breakdowns (bearish charts) and Sequential Breakouts (bullish charts). The setup is pretty simple.
- A countdown is completed giving a well-defined entry and stop-loss level.
- The price breaks through the stop-loss level indicating that the previous trend will continue.
- A counter-trend bounce occurs resulting in a retest of the breakout or breakdown levels.
- Low volume retests initiate a short position for breakdowns and a long position for breakouts.
Here is a recent example of a breakdown and a failed retest. The chart is for QUAD, which has a very bearish long-term chart. It is always unwise to blindly go long a simple Sequential buy signal when such a strong bearish trend exists. The best way to trade it is to wait for a breakdown and short the retest. QUAD gave you two opportunities. Notice that the previous low (top of the shaded channel) now becomes the stop-loss for the short position.






















