IYJ Trading Update and Dow Stocks Index Buy Signals

By: Patrice_V_Johnson

Stock-Markets
Best Financial Markets Analysis ArticleLONG-TERM TREND (> 1YR) OF THE MARKETS: DOWN
INTERMEDIATE-TERM TREND (> 3 WKS, & <1 YR) OF THE MARKETS: UP

SHORTS LONGS _____________________
None - IYJ (i shares dow jones industrial sector index etf)

Greetings, fellow J.E.D.I.,
This article is to alert you that The J.E.D.I. Way received a fill on its market order of 50 shares of IYJ at $42.91. The J.E.D.I. Way will now place a protective stop behind its long postion in IYJ as follows: (See chart below):
While the long-term trend of the markets remain down, the intermediate-term trend of the markets has changed from down to up. If you take a look at the Daily chart of the Dow Jones Industrial Average [the "DOW"] (Ticker Symbol: DJIA), the DOW stopped making lower lows sometime after July 13, 2009 and its recent close above the right shouldler on high volume of what was then considered a "HEAD AND SHOULDERS PATTERN" suggest that the support areas of 8200 and 8000 on the DOW should hold. While indicators on the Daily Chart suggest that the current runup may be overdone (or overbought), the weekly chart suggest that the DOW’s previous runup is far from overdone (or is oversold.). (SEE BELOW):

DAILY CHART OF DOW JONES INDUSTRIAL AVERAGE (DJIA) DATED 7/19/2009



















WEEKLY CHART OF THE DOW JONES INDUSTRIAL AVERAGE (DJIA) DATED 7/19/09
Thus, I think these divergences with the Daily and Weekly chart on the DOW means that perhaps we will get more overbought on the daily and then see a pullback to the right shoulders before continuing higher. A pullback to the right shoulder (of what was then considered a H & S pattern) would approximate a 50% retractment of the current new uptrend on the daily chart. And this pull back could take place this week.To reiterate: The J.E.D.I. Way will place a protective stop behind its long postion purchase of 50 shares of I shares Dow Jones Industrial Average Sector ETF (Ticker Symbol: IYJ) at $42.38. This should cut our losses short to around $26.50 before commissions since we received a fill at $42.90 on Monday, July 20, 2009. If we are stopped out and the market goes back up strong and signals that the long term trend is up, we will just get back in and follow up with another stop loss at an approproate price level that keeps cuts our losses short and let our profits run.

The goal of trading is to not lose money, but if we do lose money, make sure to lose very little. (Old Korean Trading Principal) ...And let profits run about.
Until Next Time.