Posted on July 27th, 2008 at 10:21 PM

I'd like to take the other side of the argument here and look at the charts through a bull's eyes.  Below you see a daily chart of the SPY (SPY).  The SPY broke out of its descending trend channel and has now pulled back to that channel.  It has pulled back on decreasing volume, which is a bullish sign.  It is also holding its 10 period moving average.

From a stochastic standpoint, the market was oversold for a long time.  It has tagged the overbought area.  It could stay overbought as long as it stayed oversold.

Posted on July 28th, 2008 at 12:32 PM

Last week in the Wednesday mentoring session one of the students brought up the potential short setup in Caterpillar Inc. (CAT). I have to say I love these kinds of questions in the mentoring sessions because they make my life easy. This was a picture perfect setup that was found on the scanner and the only thing that could be said was "looks great". This is one of the huge benefits I try to impress upon people when they are thinking of using Advanced GET, you will get the benefit of the other smart users beyond just the intructors. This CAT trade was brought up on the first day of the violation from the RTC and everyone had plenty of time to take it for themselves. Below is the current chart and its all just money mangement from here on out.