Denny’s Grand Slams — They Aren’t Just For Breakfast Anymore
We’ve all heard the buzz about “As the first week of the year goes, so goes the year.”

And while that’s all fine and dandy, as we look ahead to next week, we’drather listen to what the charts are telling us.

It’s much more important to stay in synch with what the market is saying.

_1spx1910.png

See the pink and green lines? Folks, that is a bearish rising wedge. It’s an ending pattern and early warning alert pattern that tells us a change in trend MAY be near. However, as shown in the zoomed in view of the chart below, we have multiple trendlines that can act as support levels should a pullback turn out to be just that — a pullback that ends up being healthy for the present market rally to continue.

_1spx601910.png

Moving on to the OTC composite

_1compd1910.png

_1comp601910.png

In Summary:

A nice healthy pullback to the prior support levels or even the 50 day average on the indexes could be just what the doctor ordered. But the market makes that call, not us.

Aside from the index charts above about the only thing that bothers us out there is the complacency with the way things are. The reason it bothers us is usually about the time everyone is firmly convinced that all is well and that the all clear has been given in the form of a

alfred_e_newman1.jpg



That’s about the time that this guy shows up:

jaws_unleashed_020605.jpg



Most of the charts we are seeing need some time for low risk-high probability entries to occur which also tells us something about the current climate. This means it’s getting harder to find good entries. When we start to observe that, it makes us take a step back and keep our powder dry.

We are all about the best set ups, forget the rest and letting them come to us vs chasing.

=======================================================

Denny’s Grand Slams — They Aren’t Just For Breakfast Anymore

A Denny’s Grand Slam occurs when a stock that has broken out into new highs or is in a prolonged uptrend gets slammed back down to support of the prior breakout or the 50-Day moving average.

We call it Denny’s Grand Slam because when it gets slammed down to support, buying the stock at that point becomes a cheap meal.

Here’s some examples:

_1abvtbefore.png

_1abvtafter.png

_1goog1910.png

We have a lot of stocks that are very extended, including several that could experience a Denny’s Grand Slam by dipping to support of a recent breakout or the 50-day moving average.

The proper place to buy them is on a pullback to chart support or the 50-day moving average — ideally as the indexes are doing the same.  That’s called trading in tandem with the market.

To learn more, sign up for our free newsletter at www.allabouttrends.net and receive our free report “How To Outperform 90% of Wall Street With Just $500 A Week.”