Hundreds of books and over 25 years of experience is all it takes. For the novice wanting to learn start with basic technical analysis of the markets. Concentrate on trendlines, support / resistance, overbought / oversold (stochastics), bollinger bands, and moving averages. Candlestick charts are the most important concept a person can learn. Try books by Bigalow for the 12 most important signals. Understand the emotions behind market movements. Understand prices expand and contract continuously. It may sound difficult but these are the keys to understanding price movements.
Friday's bearish engulfing signal may mark the end of the recent short covering rally. Prices reversed right at the downtrend line resistance as stochastics reached firmly into an over-bought condition. Prices failed to touch the 50 day ema ($18.85) and could be seen as a sign of weakness. Confirmation of the bearish signal has yet to be seen so a close above the 50 day ema is what the bulls need to send the shorts running for cover short term. A move with a close lower is what's needed to confirm the sell signal. The probabilities favor the downtrend until the downtrend line is broken on a closing basis and then it may well be a move from down to a sideways trend. Should prices decline the lower trend channel sets a target around $10. Good luck to all.
SLCA has had a nice short covering rally over the last few days which is likely nearing it's end for the short term. Prices are getting very close to the 50 day ema resistance around $19.10. This resistance level is compounded by the long term downtrend line. With the stochastics very near an over-bought condition and Friday's doji bar signaling a top is near, I believe it's reasonable to expect a jab at the resistance target with prices rolling over from there. Now here's where it gets interesting. The weekly chart has formed an abandoned baby candlestick buy signal in an over-sold condition showing upside divergence. While this weeks bar closed near it's high (a strong bar) it failed to close above it's short term ma's. So we have diverging signals between the daily and weekly charts. It boils down to this. Prices need to break above the $19.10 level before the weekly buy signal can be confirmed. Prices will likely fail at it's first attempt to get through leading to a measured pull back. Once stochastics have relieved the over-bought condition prices will likely make another run at resistance. If we fail to get through the downtrend continues which is the high probability outcome. Should prices manage to break through and hold it could mark the beginning of a new long term up-
trend or a sideways trend at the very least. While this is the low probability outcome we cannot fully dismiss the weekly buy signal. I have to side with the probabilities that the downtrend continues but price action rules. We'll have to wait and see what happens now. Good luck to all.
If prices can't hold the $15 level the next target is around $12.50 followed by the $10 level. The ultimate target based on the measuring gap from 11/28/14 is between $7 and $8.
Friday's price bar formed a small range day doji. As prices will expand and contract over and over the small range doji forms a contraction point from which prices should expand again. This should end the consolidation of the last 6 trading days. While there are clues as to the direction of the expected price expansion nobody can really say for sure. It's best to allow price to point the way making Tuesday's morning action important for the short term. Should price eject higher I have a price target of around $21.50 followed by solid resistance in the $23 range. Should prices eject lower my first target is $16.50 followed by $15. Keep in mind the long term trend is down and the probabilities favor the down side.
As I said the market doesn't always play by the rules. They're only a piece of the puzzle. It's very bearish when a false signal occurs.
SLCA may have put in a bottom this last week based on a combination of technical factors. The $15 to $17 range is a multi-point support zone. There's upside divergence on the weekly chart. The downtrend of the last 5 months have traced out what appears to be a completed 5 wave pattern ending in the panic gap down from just under $21 to $16.50. Both the weekly and daily charts are emerging from an over-sold condition. When combining all of these factors there's a good probability a short term bottom is in. However. it's important to keep in mind the long term trend is down. So what does it all mean? It means prices should trace out an a-b-c counter trend correction. I'm going to put a price target of $23.50 to $24 on it for now. Of course the market doesn't always follow the rules so caution is advised. Once the correction completes a test of the low around $16.50 is in order. Should the $15 to $17 range get broken then the measuring gap of 11/28/14 puts a target low at the $7 to $8 range. Those who don't know what a 5 wave pattern or an a-b-c correction is should google Elliott waves for an explanation. Good luck to all.