Here is what I watch for swing/longer term trades:
By Daniel at 20 November, 2009, 9:43 am
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For trend I use a 5 sma (color coded green), a 15 sma (color coded red) and a 50 sma (color coded blue) on a daily chart to show direction. As long as 50 sma is angling up, I consider the overall trend is up. Now that doesn’t mean that within that longer term trend that there can be short term down turns. To take advantage of those short term dips I look to shorter term charts to see short term reversals. I check 60 min, 30 min, 10 min and 3 min charts to see signs of reversal.
To see reversals I look for a 104 ema (color coded purple) crossover of the 104 sma (color coded yellow) and then a subsequent rounding of the 104 sma in the direction of the reversal. I look to the 3 min chart first for any evidence of a possible turn. Then look to the longer term ones for confirmation for a longer term turn.
As for how far a move can go, I look to Pivot Points as provided by my Schwab charting. I am pretty sure most charting these days offer Pivot Points which also show 2 Support levels and 2 Resistance Levels. I also look to the longer term moving averages for support levels. I particularly find the 104 ema and 104 sma on a 15 min chart as reliable indicators of support and resistance. Both the Pivot Points and 104 moving averages on the 15 min seem to be levels that computer programs tend to buy or sell.
I also use Bollinger Bands as they evolve to show a bottoming or topping intraday on a stock.
For the bigger picture I use Fibonacci numbers as a guide to where markets will run into resistance. Of late the 50% retracement off the March lows has come into play. SPY was nearing a 50% retracement off those lows which is why I was taking long money off the table a few days ago. I also was concerned how we had a reversal on one day where we were way up and then peeled back quite a bit.
To a lesser degree I use a MACD Histogram to see the degree of momentum any move is making.
I also look to other traders for their views. I look to Adam Hewison of Market Club, Brian Shannon of Alphtrends and Sam Collins of OptionsZone.com. All are free for basic level info. Currently I am a paid subscriber to Alphtrends. While I do my own due diligence I like to see what others are thinking as well.
There you have the short version of what I look at. Hope it helps!
FBB
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