Neural Market Trends

$DNDN is routinely making all time highs and the question I pose this morning is, would you buy it now?

 A lot of people are scared to buy all time highs. They think that since its at an all time high, it can't go higher and maybe its run its course.  

From the weekly chart you can see that it just keeps on making all time highs. 

But the reality is that ONE day it will have reached its all time high and then sell off. The real question then becomes, when has it truly reached its all time high?  No one knows the answer to that question!

So the moral of THIS story is to always use a stop IF you buy an all time high, because you never know if THAT all time high was ITS last!

I wrote about $PMCS back on 1/14/10, the day after it made a nice hammer formation at its 200 DMA.  It made the hammer at the bottom of a trend with very little volume or conviction for me, and I reviewed the weekly chart for additional clues.  At that time I suspected it might test its lower boundary of about $7.94, and it did yesterday.  Too bad I didn't short this one.

Rules of candlestick formations: Volume is always key indicator of how meaningful the candlestick formation is.

I entered Visa ($V) back on 12/22/09 after it made an all time high, with heavy volume, the day before.  It then went sideways for a month and I was finally taken out on 1/22, right below its 50 DMA.  I did manage to move my stop a bit higher over the course of this trade, per my trend system, but lost -0.7R on this one.  Such is life I guess…

I wonder if Chris got taken out of V on Friday as well?

I've been posting a few candlestick chart scans and asking my readers, "would you buy them" here and now or just posting some basic commentary about them being screwed.  Let's take a look at how one of them faired after I wrote about them. Today's review is $NEP, which made a wicked hanging man on Jan 7th, and I thought it was in trouble based on its parabolic move and then hanging man.

Well it was in trouble, see how's breaking down from here? I think its gunning for the $8 area…

Another candlestick chart pattern for your eyes this morning.  SMBL made a nice hammer at its 50DMA and right at the bottom of its trend line BUT volume is unconvincing for me…  So, would you buy it?

And yesterday out of a total of 5 positions.  One position was a good gain (FDM) but the others added up to slight losses; add them all up and I'm down only $5.  I'm not upset, just satisfied my system is working.  Of course I'd hope for more of a gain but sometimes break even is just as good.

Well would you punk?  BIDU made a gap up under heavy volume after the anouncement that Google might leave China.  The first candlestick after the news was a hammer at the top of a resistance line, which brought out the Bears.  But the Bulls broke through that resistance the very next day with vigor.  So, would you buy BIDU here?