SPECIAL: The Top Three Chart Patterns In Growth Investing -

Markets Mostly Higher But Volume Low -

"From The Trading Desk" May 7, 2007: Is the current rally getting tired? The Nasdaq, S&P500, and Dow all made new recent highs on lower volume. The volume was especially low on the Nasdaq and S&P. The Nasdaq was down fractionally while the Dow and S&P were up a bit.

CNS, AAPL and IGLD were up on heavy volume. The solar group was mixed with FSLR making a new high on big volume. SPWR was down on strong volume.

SYNL was up 4% on an almost 400% volume increase. The last base for the stock was early this year. GSOL looks to be setting up again for a Cup With Handle breakout, but it's burned us before on a steep breakout attempt.

ROCM is back at recent new lows after it's recent collpase. CYNO was up again on strong volume but it's extended. WFR is meeting resistance at the 50 day moving average. AL was up 34% on a takeover bid by Alcoa. The Shanghai market was up 2.2% today.

"Current Market Pulse":The market is in a confirmed rally and slowly moving higher. Although things are looking OK today, caution is still advised. We are at lofty short-term levels and lesser-quality names are leading the rally. I am recommending caution. Sell your weaker acting stocks. Come off margin. Buy only the best CAN SLIM stocks like the ones we suggest. Only buy stocks that are emerging out of a solid and proper basing pattern on big volume. See our "Buy" list for candidates. Always cut your losses at 7%-8% below your purchase price No Matter What.

"Market-Leaders" Moving-Up on Volume: AL, SYNL, CYNO, FSLR, AAPL, IGLD

"Market-Leaders" Moving-Down on Volume: GROW, SPWR

"Let That Be a Lesson" - The Top Three Chart Patterns In Growth Investing.
These chart patterns are the "bread and butter" of good stock trading. Get to know them and they will serve you well now and in the future.

CUP-WITH-HANDLE - This is the best chart pattern a growth stock can have.

- The base must be at least 7 weeks in length, but it can last up to 65 weeks.

- The stock usually corrects 20-30% from the high, but up to 50% in a bear market.

- The handle usually lasts a week or two and should drift sideways or down along it's lows.

- Handles usually correct 10-15%, but up to 20-30% in a severe bear market.

- Handles should form in the upper-half of the cup, preferably within 15% of the old high.

- The handle should form above the 200-day moving average.

The buy point occurs when the price moves above the high of the handle on an increase in volume of a least 50%. The Relative Strength line should lead or closely follow the stock's price into new high ground.

DOUBLE BOTTOM - This is a common base with a good performance history. The price pattern looks like a "W." It should be at least 7 weeks in length.

- The stock starts to correct and then stops, putting in the first part of the "W."

- It then rallies, forming the middle part of the "W."

- The next leg is formed when the stock falls again.

- The final part of the "W" takes shape when the stock rallies again.

The second leg down of the "W" should undercut the first to shakeout the weaker holders. The "pivot point" or buy point occurs when the stock clears the middle part of the "W" on heavy volume.

FLAT BASE - Another very successful and common chart pattern, but it can be as short as 5 weeks in length. This base usually occurs after the stock has broken out and ran up from another base.

- The stock appears to move sideways and usually corrects just 8-12% from it's peak.

- There should be at least one period during the base where the volume drys up at least slightly.

The "pivot point" or buy point occurs when the stock moves above the high of the base on heavy volume.

You will see these patterns over and over if you look at the latest winning stocks or winners of the past. Learn to recognize and trade them and your investing results should improve substantially.

Get aboard the “True Market Leading Stocks” that are “breaking-out” now!
We don't issue lots of stock-picks like the others. But the ones we do are Powerful Stocks that have the potential for gains of 50%-100%, 500% and more.

Sure, our stocks have huge earnings, showing tremendous recent strength, and are being accumulated by the top money managers on Wall St. But it's not enough just knowing their names. You have to know how to trade them. When to buy them and when to sell. Since the average high-growth stock eventually goes down over 70%, this knowledge is valuable. Sign-up today for your FREE TRIAL

Good trading is all about having solid and proven trading rules like the ones I use every day. Rules developed by the world's best traders like William J. O'Neil and Jesse Livermore. You can read more about them here:

THE TOP 12 RULES OF INVESTING You Need To Know

Happy Trading,

Mark Gordon
GOLDENTICKER.COM
Past performance does not guarantee future results. Investing in stocks, bonds, ETFs, and mutual funds involves risk and loss of capital can occur. Consult with your financial advisor before investing in the stock market or making any investment decisions. This blog/website is solely for informational purposes and is not an offer to buy or sell or solicitation of an offer to buy or sell any security or investment product. This material is not to be construed as providing investment services in any jurisdiction where such offers or solicitation would be illegal.

SPECIAL: The "Cup-With-Handle" Chart Pattern

CROX and YHOO Gap-Up on Huge Volume

"From The Trading Desk" May 4, 2007: All 4 major indexes were up in mixed volume again today. The S&P and Dow were both up .2% and the Nasdaq was up .4% in heavier volume. The Dow put in another all-time high. The markets keep grinding higher.

YHOO gapped-up and closed up almost 10% on Microsoft take-over rumors. CROX cleared a cup shaped base on a huge gap to close up almost 20%. The stock blew away earnings estimates and guidance and gapped over our 5% buy limit.

"Current Market Pulse":The market is in a confirmed rally and slowly moving higher. Although things are looking good today, caution is still advised. We are at lofty short-term levels and lesser-quality names are leading the rally. I am recommending caution. Sell your weaker acting stocks. Come off margin. Buy only the best CAN SLIM stocks like the ones we suggest. Only buy stocks that are emerging out of a solid and proper basing pattern on big volume. See our "Buy" list for candidates. Always cut your losses at 7%-8% below your purchase price No Matter What.

"Market-Leaders" Moving-Up on Volume: CROX, FSLR, PCLN, SPWR

"Market-Leaders" Moving-Down on Volume: RYAAY, BBND, AXR

"Let That Be a Lesson" Watch a LIVE video of this important lesson. click here

If there was a "holy grail" in stock chart patterns, it would have to be the "Cup-With-A-Handle." According to William J. O'Neil, - founder of Investors Business Daily and the author of the seminal investing book "How To Make Money In Stocks," this pattern is the strongest one a growth stock can have.

The cup portion of the base starts forming after a previous run-up of at least 30%. During the prior move you want to see weeks of heavy volume where the price moves up. You also want to see the Relative Strength line improving. Look for a clear and definite prior uptrend.

The usual price correction from the peak to the bottom of the cup is usually around 12% - 15% and up to 33%. In a severe "bear market" a cup can sometimes be as deep as 50% or more. Growth stocks normally correct 1 1/2 to 2 1/2 times the general market. Stocks correcting more than this should be avoided.

In most cases the bottom part of the cup should be rounded like a "U" shape and not harsh like a "V." This allows the stock time for the buyers and sellers to find their equilibrium and it takes most of the "speculation" out of the stock.

At the bottom of the cup look for a shakeout or a sudden large price drop and then recovery to scare out the last of the weak holders. You also want to see areas of quiet trade at the bottom.

You also want to see "tight" price action in cup. On a weekly chart, tightness is small price movements from high to low for the week. It's also nice to see nearly un-changed closes for a few weeks as well. Wide price movements attract too much speculative attention to the stock and lessen the likelihood of a successful break-out.

As the stock climbs up and forms the "right" side of the cup you want to see days and weeks of heavy volume price moves. Gap ups on heavy volume are also desirable. Also, the number of heavy volume up-weeks should out-number the number of heavy volume down-weeks. Big volume up weeks, followed by light volume down weeks are good as well.

The Relative Strength line should lead or at least closely follow the stocks price into new high ground.

The cup portion of the base should last 7 weeks minimum to as long as 65 weeks. Most cups last three to six months.

HANDLES
The handle portion of the base is formed after the stock has built the right-side of the cup. A proper handle is at least one or two weeks long and "drifts" down in price along it's lows. Volume will dry up near the bottom of the handle.

If the handle "wedges" up, the handle did not serve to "shake-out" the last of the weaker holders and set-up the next price move. Wedging handles carry significantly more risk that the base will fail.

Handles usually form near the prior high of the cup (the high of the left side) and must form in the upper-half of the cup. The middle point of the handle should be above the middle point of the cup. The handle must also be above the 200-day moving average.

In a "bull market" the handle should drop no more than 10% - 15% from it's peak unless the stock forms a very large cup.

PIVOT POINT
The "buy point" or "pivot point" is usually ten cents above the highest point of the handle. You only want to buy here if the daily volume increases at least 50% above the average daily volume for the last 50 days.

Get aboard the “True Market Leading Stocks” that are “breaking-out” now!
We don't issue lots of stock-picks like the others. But the ones we do are Powerful Stocks that have the potential for gains of 50%-100%, 500% and more.

Sure, our stocks have huge earnings, showing tremendous recent strength, and are being accumulated by the top money managers on Wall St. But it's not enough just knowing their names. You have to know how to trade them. When to buy them and when to sell. Since the average high-growth stock eventually goes down over 70%, this knowledge is valuable. Sign-up today for your FREE TRIAL

Good trading is all about having solid and proven trading rules like the ones I use every day. Rules developed by the world's best traders like William J. O'Neil and Jesse Livermore. You can read more about them here:

THE TOP 12 RULES OF INVESTING You Need To Know

Happy Trading,

Mark Gordon
GOLDENTICKER.COM

Past performance does not guarantee future results. Investing in stocks, bonds, ETFs, and mutual funds involves risk and loss of capital can occur. Consult with your financial advisor before investing in the stock market or making any investment decisions. This blog/website is solely for informational purposes and is not an offer to buy or sell or solicitation of an offer to buy or sell any security or investment product. This material is not to be construed as providing investment services in any jurisdiction where such offers or solicitation would be illegal.

SPECIAL - "Some Cups Form High-Handles"

Market Rally Continues, But Volume is Mixed

"From The Trading Desk" May 3, 2007: The markets were all up on mixed volume today. The NASDAQ was up .30% to a new recent high on strong volume, a good sign indeed. The Dow Industrials were up .28% to another all time high on average volume. The S&P500 closed above the 1500 mark for the first time since 2000.

EDU was up 3.26% in heavy trade. CROX was up strongly on increasing volume. VCLK which we recently sold, gapped down 7.57% today and closed below it's 50-dma on heavy volume.

"Current Market Pulse":The market is in a confirmed rally. Although things are looking good today, caution is still advised. We are at lofty short-term levels and lesser-quality names are leading the rally. I am recommending caution. Sell your weaker acting stocks. Come off margin. Buy only the best CAN SLIM stocks like the ones we suggest. Only buy stocks that are emerging out of a solid and proper basing pattern on big volume. See our "Buy" list for candidates. Always cut your losses at 7%-8% below your purchase price No Matter What.

"Market-Leaders" Moving-Up on Volume: NICE, HURN, DWSN, IGLD

"Market-Leaders" Moving-Down on Volume: RYAAY, ANDE

"Let That Be a Lesson" Watch a LIVE video of this important lesson. click here
Some Cups Form "High" Handles - According to William J. O'Neil in his legendary stock market trading book "How To Make Money In Stocks," the cup-with-handle base is the strongest chart pattern for growth stocks to stage a big price move.

In a normal "cup-with-handle" base, the handle ideally starts to form near the high of the left side of the "cup." But sometimes the stock price moves above the old high and and the handle starts forming later. The stock may still be buyable.

Here is a chart of Interparfums Inc. (IPAR) for May 3, 2007. We see that the left side of the cup topped out at 21.77 on November 17, 2006. The stock's base has shown good accumulation and the Relative Strength line is strong.

Interparfums never formed a proper handle before it crossed the "buy point" ($21.87 or the prior high, plus ten cents). Then on April 20, 2007 IPAR blasted out of the base on huge volume, a very good sign.

The stock closed at $23.46, or 7.27% above the proper "buy point." At this point the stock was already too far extended in price to buy. Our rules tell us not to purchase stocks more than 5% past the "buy point."

Patience seems to have paid off however. The stock formed an eight day handle (more than the 1 week minimum required). There were areas of quiet trade on the 3rd, 4th, and 5th days. And the handle "drifted" down slightly which serves to "wear-out" some of the "weaker" holders.

On May 3rd, IPAR blasted out of it's high-handle on the biggest volume the entire base has seen. It closed just below it's new "buy point" of $23.63 at $23.48.

Get aboard the “True Market Leading Stocks” that are “breaking-out” now!
We don't issue lots of stock-picks like the others. But the ones we do are Powerful Stocks that have the potential for gains of 50%-100%, 500% and more.

Sure, our stocks have huge earnings, showing tremendous recent strength, and are being accumulated by the top money managers on Wall St. But it's not enough just knowing their names. You have to know how to trade them. When to buy them and when to sell. Since the average high-growth stock eventually goes down over 70%, this knowledge is valuable. Sign-up today for your FREE TRIAL

Good trading is all about having solid and proven trading rules like the ones I use every day. Rules developed by the world's best traders like William J. O'Neil and Jesse Livermore. You can read more about them here:

THE TOP 12 RULES OF INVESTING You Need To Know

Happy Trading,

Mark Gordon
GOLDENTICKER.COM

Past performance does not guarantee future results. Investing in stocks, bonds, ETFs, and mutual funds involves risk and loss of capital can occur. Consult with your financial advisor before investing in the stock market or making any investment decisions. This blog/website is solely for informational purposes and is not an offer to buy or sell or solicitation of an offer to buy or sell any security or investment product. This material is not to be construed as providing investment services in any jurisdiction where such offers or solicitation would be illegal.

SPECIAL - "How To Spot Market Tops"

Markets Rally Broadly, But Volume is Lackluster

"From The Trading Desk" May 2, 2007: The markets rallied broadly but on lower volume. The NASDAQ was up 1.04% on less volume and recouped the prior three day's losses. The S&P500 was up .65% to a new high, recouping the prior losses as well. Volume was also lighter.

The DOW continued its run to another new high but it was tempered by lower volume. CROX was up 4.7% on strong volume. VIP was up 5.25% on good volume. ROCM fell even more after it's huge collapse in prior days. CTSH failed to rally above it's 50-dma.

"Current Market Pulse":The market is in a confirmed rally. Although things are looking good today, caution is still advised. We are at lofty short-term levels and lesser-quality names are leading the rally. I am recommending caution. Sell your weaker acting stocks. Come off margin. Buy only the best CAN SLIM stocks like the ones we suggest. Only buy stocks that are emerging out of a solid and proper basing pattern on big volume. See our "Buy" list for candidates. Always cut your losses at 7%-8% below your purchase price No Matter What.

"Market-Leaders" Moving-Up on Volume: VOCS, RTI, CBG

"Market-Leaders" Moving-Down on Volume: ROCM, HWCC, CTSH, GRMN

"Let That Be a Lesson" Watch a LIVE video of this important lesson. click here

"How To Spot Market Tops" - When the "big boys" (institutional investors like mutual funds, banks, pension funds, insurance companies, etc) head for the exits, you need to as well.

They control an estimated 80% of the price action of the US stock market, so it pays to know what they are doing. Since they are so big, they leave tracks behind. By keeping a close watch on the markets you can step aside and not have to "ride" the markets down during their "gut-wrenching" declines of 15%, 25%, 50% and more.

The best way to gauge if the institutional players are exiting the market is to watch what for we call "distribution days." Simply, this is when one of the major indexes ( the NASDAQ, S&P 500, Dow Industrials, NYSE Composite) is down more than .2% on heavier volume than the previous session.

Not all indexes have to fall at the same time. If only one of the gauges suffers heavy distribution that still can signal trouble ahead.

When the market racks up four of five of these in a few weeks time, chances are the rally is in trouble and the market may reverse lower.

Above is a chart of the NASDAQ in 2000 as it peaked on March 10th and then started it's massive decline. The first day of heavy distribution came 3 sessions prior to the peak. The index fell for several sessions putting in another distribution day, then tried to rally back.

That rally stalled in late March and then the NASDAQ racked-up three days of heavy distribution in a row. A definite signal to exit the markets. The index also sliced through it's 50 day moving average on heavy volume, another major sell signal.

The NASDAQ put in a total of 9 distribution days in a month's time. During all this, scores of market "pundits" were telling investors to "buy the dips." Many individuals who did not heed the real warning signs lost a lot of money and those who stayed on margin were most likely wiped out. This ended up being one of the biggest collapses in Wall St. history.

Don't panic if the market flashes a few distribution days from time to time. The market can't go higher without taking an occasional breather now and then. It's when they pile up in a very short time that you need to worry.

Also, not every distribution day should cause you concern. Higher volume selling after a holiday usually means that more people are now back after a quiet pre-holiday period.

"Churning" near the top is also a sign of distribution. This is when the market is not advancing near the top but the volume is brisk. This means that there is a lot of institutional trading going on, but the buyers' demand is not strong enough to push prices up.

When you see heavy distribution in the markets you must act quickly. If you are on margin, get off! Sell your weaker acting stocks. If selling persists, raise cash to protect your hard earned assets. Don't listen to the experts, listen to the markets.

Get aboard the “True Market Leading Stocks” that are “breaking-out” now!
We don't issue lots of stock-picks like the others. But the ones we do are Powerful Stocks that have the potential for gains of 50%-100%, 500% and more.

Sure, our stocks have huge earnings, showing tremendous recent strength, and are being accumulated by the top money managers on Wall St. But it's not enough just knowing their names. You have to know how to trade them. When to buy them and when to sell. Since the average high-growth stock eventually goes down over 70%, this knowledge is valuable. Sign-up today for your FREE TRIAL

Good trading is all about having solid and proven trading rules like the ones I use every day. Rules developed by the world's best traders like William J. O'Neil and Jesse Livermore. You can read more about them here:

THE TOP 12 RULES OF INVESTING You Need To Know

Happy Trading,

Mark Gordon
GOLDENTICKER.COM

" Past performance does not guarantee future results. Investing in stocks, bonds, ETFs, and mutual funds involves risk and loss of capital can occur. Consult with your financial advisor before investing in the stock market or making any investment decisions. This blog/website is solely for informational purposes and is not an offer to buy or sell or solicitation of an offer to buy or sell any security or investment product. This material is not to be construed as providing investment services in any jurisdiction where such offers or solicitation would be illegal.