Get the Horns
Sentiment Analysis of RIM
It never fails. The indicators I use to analyze RIMM and gauge the overall indices, that is. The model includes fundamental, technical, geometrical AND sentiment analysis. Many rely on one area without weighting the others. They seem devoted to one as if it were a sports team, while the smarties on the Street weight ALL four areas (plus the rumors).
Ignorance can be costly in this business and those that spend too much time playing armchair economist, waste precious time parsing fundamentals, as if the Street has not yet discounted it. The traders who DO give weight to all these areas are sometimes not conscious of when to give one area MORE weight than the other. This creates the mental trap of trading their own "preferred" reality when they should be trading the "perceived" reality on the other side of the trade. Read the previous sentence one more time. It is what will separate great traders from the the average ones. This is called duality thinking, being able to divorce yourself from your own thesis and limiting beliefs, though it may conflict with your current thesis.
(To read more about this fascinating process, great article at: http://home.pacbell.net/moorty/viability.htm ) I know, heavy stuff . But your number one enemy is always yourself, not the tape.
What took place the last few sessions was a classic bear trap. Even the brightest fell for it. Why not? Because we're supposed to be headed for recession, right? Because another investment bank will implode or write-down, right? Or perhaps because the sun will explode next week, right? Not so much. There were simply too many bears going into this earnings week and the Street loves that opportunity around op/ex. Intel and the fundies were just the vehicle not the cause. Read between the tape folks...
Technical Analysis of RIM
(click image to view detailed TA)
A bullish gap up yesterday on below average volume. Expecting follow through today as opposed to the usual RIMM snapback. Notice how perfectly pattern adheres to the FIB retracements. Wednesday's bounce off the 68.2% was confirmation that we found a base and would move higher. The walls of the fortress are at 122.50 resistance and once that is broken it should be a quick move to 125. A heavy volume day is required to confirm this move has legs , however. I have provide resistance levels to watch for today (see chart).
Technical Analysis of NDX
(click on image for detailed TA)
NDX found support on the 20 dma with a bullish gap up Wednesday. I expect follow through today but need to see better volume to confirm this rally has legs. We are currently lodged between 20dma and the 38.2% FIB retracement which should provide pressure for a squeeze to the upside. It appears we are still gunning for the 100dma at 1897 as mentioned in previous posts. From a purely technical perspective, we should see a continued rally today.
Happy Trading,
Cash Mancini
Quote of the Day
“When a true genius appears in this world, you may know him by this sign, that the dunces are all in confederacy against him." - Jonathan Swift
Trade Signal of the Day:
Hold
Disclosure:
LONG RIMM
Video of the Day
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