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Tuesday, May 5, 2009

Stock Market Charts

Between the blog reading, CNBC, looking at individual stock charts, talking to other people on their current opinion on market direction, government announcements, and world news, there is just too much information to digest.

I plan to write a series of articles to list out various news sources I try to use. The number one source is my friends opinions, primarily Happy John, and to a far second degree Swan. (FAR second! ;) ). So aside from personal spin, there are other pieces of information I try to read up on. The odd thing is no matter how much I read, I end up with opinions that line up with Happy John. I should just save my time and just always follow him. But its important to do your own research to gain the confidence in your stock plays.

It is pretty hard to look at any single stock or trend to pick when is a good time to get in or out of the market. As a computer guy, I am always looking for the "system" to indicate entry and exit points, for which, there is no fool proof way.

However, many people look at charts of stocks, indexes, and other relative financial data to indicate trends. You have seen on this blog my meager attempt to draw channel lines to back up my reasoning. In general, I don't like the idea of using chart reasoning/analysis as a sole method to the madness, but so many people do so, that it almost becomes self fulfilling, and therefore important.

There are many stock market charting sites. Here are a few I found useful.

Basic Charting
For basic chart look ups, I recommend www.bighcharts.com. Click on advanced, on the left click indicators, then choose SMA - 3 line, and to the right put 50,100,200. Fool around with the other myriad of options to find the view you like. You can save your options for using again in the future.

Another great interactive charting tool is google finance at www.google.com/finance. Google allows you to compare multiple stocks, as well as find news, blogs, and other stocks similiar to the one you are reviewing.

Google finance also as a tool called "stock screener" to help you find a stock to buy or short, based upon a wide variety of customizable characteristics.

Advanced Charting
StockCharts.com is a free site that provides a wide variety of charts, plus has a screener to find charts that match known patterns. This is great to help reduce the number of charts you review by focusing on finding stocks that match the pattern that interests you.

Master Data has a wide variety of free charts featuring ability to add the McClellian Oscilator buy/sell indicator. (Click to read more) I don't really like the format, but there is a wealth of charts and data items you can look up.

TheChartStore.com, a pay site that provides some analysis across the over 5,000 charts dating back to 1840+. The analysis is available if you pay premium service. Some of the charts I particularly like is inflation adjusted charts. I just ordered this pay-site, hopefully I'll be providing some examples in posts to come.

Example charts
From Master data, below you can see two charts of GDX with the McClellian Oscillator, one on a daily chart, the other at a weekly view. The Oscillator when up high indicates overbought, when low indicates oversold. From each time frame, you can clearly see how the Oscillator indicates overbought and over sold conditions. You can also see that the turning point does not have to be sudden, overbought and oversold can last weeks before turning.
From a daily perspective, GDX is oversold and should move higher using this indicator.

From WebSurfinMurf's Financial Blog

From WebSurfinMurf's Financial Blog
From the TheChartStore.com below is price of gold back from 1913 to today, adjusted with Producer Price Index (PPI). As you can see with this view, gold has not yet reached new highs in relative terms.

From WebSurfinMurf's Financial Blog
Frankly, there is so much data out there, your head will spin and its hard to see any pattern to indicate when to buy or sell after a while. That is why I primarily rely on bloggers to highlight potential stocks to buy or sell, then use the charts to review. I'll blog on the bloggers worth reading or subscribing to next.

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