Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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THE
RECTANGLE FORMATION
Today I want to discuss with you the
"classical" technical analysis price pattern known as a
rectangle.
Price pattern analysis goes back to the work of
Schabaker and Edwards and Magee. I call it "classical"
technical analysis. It derived from a time when charts were hand kept on
graph paper and even simple moving averages were not employed. There
were certainly no indicators such as MACD at that time. The assumption
of classical technical analysis was that price patterns repeat
themselves over and over again throughout time. Pattern recognition
means pattern prediction, and thus trading profit.
A rectangle describes a price pattern where supply and
demand are in approximate balance for an extended period of time. The
shares move in a narrow range, hitting resistance at the rectangle's top
and finding support at its bottom. It is a pattern of indecision, one in
which the bulls and bears are approximately equally powerful.
Ultimately, one side or the other wins the tug of war and the shares
break out or break down. Typically, the breakout or breakdown can be
measured by the height of the rectangle.
A break below or above a support or resistance level
would create a high-probability entry point for a swing trade. This is
because of the "alternation principle." (I describe this in
great detail in my trading course, which I have made available FREE to
all StreetAuthority
Swing Trader subscribers.) The alternation principle states
that old support, when broken, becomes new resistance. The reverse is
also true -- when old resistance is broken, it should then become new
support.
Rectangles should usually not be traded until the
pattern is resolved one way or another. While typically not yielding the
swing trader enormous profits, on a breakout or breakdown they offer a
low-risk entry point, a very clear stop and an explicit price target. It
would be kind of "square" to ignore them.
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