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Since my last contribution there has been a lot to say about the markets. The local index pushed through to all-time new highs, the Dow Jones has seen nearly 500 points taken away and trade below the 10,000 point level. Trending markets are the key to directional trading and the recent moves should not be too concerning to a trader as the most important thing is that there is movement regardless of direction.
The recent trip to the United States cemented my view as to the scope of this market; it may seem a little terrifying to the brand new trader. To the trader who is comfortable with their plan, some may say their eyes just “light up” with the vast opportunity.
Looking at some recent stock action in the US, one stood out as a classic ABC trade and ‘price set up’ based on studying the work of David and Gann. Amazon.com or AMZN, trades on the NASDAQ and is one that I remember from the days of the tech boom - an online book shop that planned to change the way people purchased books. The chart below shows the price action for Amazon.com over the last 10 months from the October high in 2003. Circled in orange are the major swing highs and in light blue the swing lows. Clearly, the trend in early 2004 is down, with lower swing tops and lower swing bottoms.
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