Tuesday, January 4, 2011

Off and running

2011 got off to a great start with a 93 point advance in the Dow. This keeps us at the upper end of an RTC channel established December 9th when the Dow broke out of its week long consolidation. Not only was price up but volume was higher than any point last month except for the first two days of December which saw those awesome gains. Even the short stochastic is giving a bullish crossover right now. And even after today's gains, the futures are all up modestly right now (1 AM EST).

So technically, there's really nothing to suggest we don't have more room to run. The green swing trend arrow remains in place and my long hat is on. Keep your fingers crossed that we can get five up sessions in a row. That would be a major bullish indicator for the rest of the year. And note that historically, pre-presidential election years, of which this is one, tend to finish positive.


Today I booted HIMX from my low price/high yield portfolio, not because it was too bad, but because it was too good. It basically became a victim of its own success. Check out this chart. Over the last four sessions Himax went exponential in a big way, ending up in a classical evening star doji candle today. That's a major bearish sign. Because of the parabolic run-up, I'm not even waiting for confirmation tomorrow. I bought it at 2.03 purely for its dividends, but after selling it today at 2.38 I made more in appreciation than the dividends would have paid. I'll consider getting back in after the pullback that's sure to come. It may still go higher in the long run, but we are swing traders and this swing trade is done.

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