Morning Update
Dow Jones Industrial Average (INDU) - Daily chart and Monthly charts
Quick update on the INDU. The INDU is still in the continuation diamond pattern and has broken out of the bull flag. Today the INDU is up 0.28% at 11107. Futures are at new 52 week highs, but the cash is not yet there.

Apple Computer, Inc. (AAPL) - Daily chart
The daily chart illustrates that AAPL is still trading within it's falling wedge in the wave 3 to 4 correction. I am bringing this chart up in order to discuss pattern failure. When does pattern failure occur? Pattern failure occurs when you are long a stock and it reverses south to form and impulse wave down. Corrections and extended corrections are not failures. They are simply corrections. Patterns are used to determine investor sentiment. What would tell us for example that AAPL was a pattern failure? Overlapping the prior waves would tell the investor that the pattern had failed. An investors entry price does not mean the pattern has failed.

Fastenal Co. (FAST) - Daily chart
The daily chart shows that FAST has broken out of the ascending triangle. I am bringing this chart up in order to discuss the meaning of triangles. Triangles are the foot prints to the correction. Larger triangles mean larger corrections.

Common Misconceptions and Mistakes Traders Make
Traders rarely have problem with stops, they only think they have problems with them. Traders rather commonly have a problem with the following: diversification, correct entry, correct position size, and selling price targets. The latter is a bigger problem because investors fall in love with their stocks. Consequently they over stay their welcome. Another problem is double dipping. Furthermore, people become worried about their stocks because of a failure to follow correct entry and position size and proper portfolio diversification. People do not have issues with stops, but rather the above. Breaking the rules causes poor trading and creates bad habits.