179 replies to this topic

[DrBubb]

It was either that or he got them down Wembley market, I saw the spitting image of him down there the other weekend. I was tempted to say hello but you get a lot of pot smoking pony tailed old hippys down there so thought it was best not to for fear of embarrassment. (If your reading Mark I'm great fan of yours, please don't take it personally).

Take a butchers at this list on google finance it encompasses all that he was taking about with reference to exposure to the grains:

Individual Stocks on NYSE: CF, MOS, IPI, AGU, MON, TRA, SYT, DE, AGCO, CNH, ADM

ETFs: MOO, PAGG

Don't forget this UK stock traded which I have been buying:

CORN.L / Etfs Com Securities (LSE) ... chart

And DBA, etc.:
Check out the Food threads
here:
on Advfn: http://www.advfn.com/cmn/fbb/thread.php3?id=21259080

[Catflap]

A strong move up for most of next week?

- MACD has now gone postive on the daily charts (just)

- Slow stochastics now locked-in above 80

- Inverse head & shoulders pattern looks complete

- Price now above the 20, 50 and 100-day EMA's


Catflap's 'fourth full moon' cycle observation - is it going to come true again?. After a significant correction, previous big moves up leading to new highs since the cyclical bull market began have started around this time, eg:

March 11 full moon
July 7 full moon
November 2 full moon

Also Monday is one of two 'most important' Bradley turn dates for 2010.


From: http://www.youtube.com/watch?v=-bBVdpeeUBM

[Catflap]

In a cyclical or secular bull market price should not go below the 400-day EMA. Using a weekly chart and an 83-week EMA (400/251 trading days x52) then price recently hit this and bounced off:

[attachment=1368:s_p_83_week_EMA.png]


Also, see how 1063 was major support at the same point

[attachment=1369:s_p_1063_support.png]

[Ziknik]

I'm going to take some profit at S&P = 1180 and 1210

S&P futures looking strong this morning

Non farm (if positive) this week should send send the markets up. Hopefully Halifax HPI will be fairly flat at worst.

[Catflap]

Didn't spot it last week, but gold has now broken out of it's falling wedge pattern which is bullish. So a top must definitely be in on the dollar - we've already had some bearish candlesticks and my target of 81 has been met. Like equities, gold also has a bullish inverse head & shoulders chart formation.

http://stockcharts.com/school/doku.php?id=...s:falling_wedge

[S60R]

Didn't spot it last week, but gold has now broken out of it's falling wedge pattern which is bullish. So a top must definitely be in on the dollar - we've already had some bearish candlesticks and my target of 81 has been met. Like equities, gold also has a bullish inverse head & shoulders chart formation.

http://stockcharts.com/school/doku.php?id=...s:falling_wedge

I respect your view, however, I look at it a bit differently. I would personally wait for GLD to break the horizontal resistance of 111 and only if the volume goes above average.

Advfn link

You seem to be bearish on USD at present. Do you rule out a possibility of equities, USD & gold drifting sideways until the "dust is blown" in April or May?

[Catflap]

I respect your view, however, I look at it a bit differently. I would personally wait for GLD to break the horizontal resistance of 111 and only if the volume goes above average.

Advfn link

You seem to be bearish on USD at present. Do you rule out a possibility of equities, USD & gold drifting sideways until the "dust is blown" in April or May?

Thanks for that chart S60R - shows it beautifully. Your approach is the right one for most people, but I personally really hate waiting for all these signals like MACD and everything else which are lagging. I'll admit that I don't pay any attention to volume in any of my trades and I'm a little unconventional in my approach - I like developing my own rules/figuring things out for myself and seeing things that others maybe don't.

As I said to someone else this evening, I use cycles, symmetry, fractals and patterns to give me a good understanding of what the market is doing - I still use moving averages, MACD and slow stochastics etc as well as market breadth stuff for equities. Candlesticks can also tell you what the market is doing or wants to do and I'm increasing my knowledge in that area as well.

I don't see a scenario of equities, the dollar and gold drifting sideways - it could happen, but the inverse head & shoulders pattern along with all the other work I've done says to me it's less likely. If the dollar heads back to the 71/72 area which I believe it will then stocks are going to make new highs. My other work says equities will make a peak in early May.

The focus could already be starting to shift back to the huge debts that the US has with what Niall Ferguson has been saying on American television. Forget the PIIGS - the US is still the biggest PIG of them all!

http://www.youtube.com/watch?v=0KD4Dr1efZs

http://www.youtube.com/watch?v=d7Rvha2_KT8

[S60R]

... and I'm a little unconventional in my approach - I like developing my own rules/figuring things out for myself and seeing things that others maybe don't.

I am glad that you figured out how to evaluate your own edge that helped you to make a number of good calls and boosted your trading confidence. Surely, this gives you a great advantage. I remember a number of your posts related to K-wave theory and I will revisit and  try to  reanalyse them for myself.

... I use cycles, symmetry, fractals and patterns to give me a good understanding of what the market is doing - I still use moving averages, MACD and slow stochastics etc as well as market breadth stuff for equities.

I understand and am trying to follow a similar path. I am not too keen on fractals as they do fail very often, so do patterns and the lagging indicators of course. I have to admit that I don't have much experience yet. However, I do have scientific and engineering background and, at present, I am trying to evaluate individual probabilities of various patterns and indicators in the markets that I am trading. The aim is to do a simple statistical analysis to evaluate an overall probability. Once a good pool of data has been sampled I will code it in to give a semi-automatic signal for placing the trade. This can be easily done for indicators and even candlestics. The problem with the fractals especially the 18-year cycle ones is in the accuracy of the data and the insufficient sampling.

As I mentioned before, I need to review your work posted on GEI before, in order to see how you've overcome the above limitation with the K-waves. I will probably ask a few more questions very soon, if you don't mind.

Candlesticks can also tell you what the market is doing or wants to do and I'm increasing my knowledge in that area as well.

Me too, currently reading Steve Neson book on Japanese candlesticks. Interesting stuff, but requires a lot of comparison and analysis with the current charts. What was that black candle that you mentioned in another post. I understand the red and the white (or black and white), hanging man, hammers, dojis, but where the heck on earth the black one (in the context of red and whites) came from?

Many thanks.

[GTG]

I understand and am trying to follow a similar path. I am not too keen on fractals as they do fail very often, so do patterns and the lagging indicators of course. I have to admit that I don't have much experience yet. However, I do have scientific and engineering background and, at present, I am trying to evaluate individual probabilities of various patterns and indicators in the markets that I am trading. The aim is to do a simple statistical analysis to evaluate an overall probability. Once a good pool of data has been sampled I will code it in to give a semi-automatic signal for placing the trade. This can be easily done for indicators and even candlestics. The problem with the fractals especially the 18-year cycle ones is in the accuracy of the data and the insufficient sampling.

Bulkowski might save you a bit of time

[S60R]

Bulkowski might save you a bit of time

Thank you, GTG! I have bookmarked his website and will have a thorough look once I have finished with Nison and Achelis books.

[GTG]

Thank you, GTG! I have bookmarked his website and will have a thorough look once I have finished with Nison and Achelis books.

Your welcome, good luck with your studies.

[Catflap]

I am glad that you figured out how to evaluate your own edge that helped you to make a number of good calls and boosted your trading confidence. Surely, this gives you a great advantage. I remember a number of your posts related to K-wave theory and I will revisit and  try to  reanalyse them for myself.

Your right, it has boosted my confidence especially to go against what others are saying - I am contrarian in many respects anyway.
I think the K-wave theory will be pretty good for the long term trend and although it's as yet unproven if it works or not, it does kind of fit in with what Harry Dent predicts and says, namely:

'Humans do predictable things' - they work, get married, have children, buy houses, reach peak spending and retire at certain points in their life. I believe that the stockmarket action is understandable when you look at it through the 4 different seasons and see the points at which the baby boomers are at.

I understand and am trying to follow a similar path. I am not too keen on fractals as they do fail very often, so do patterns and the lagging indicators of course. I have to admit that I don't have much experience yet. However, I do have scientific and engineering background and, at present, I am trying to evaluate individual probabilities of various patterns and indicators in the markets that I am trading. The aim is to do a simple statistical analysis to evaluate an overall probability. Once a good pool of data has been sampled I will code it in to give a semi-automatic signal for placing the trade. This can be easily done for indicators and even candlestics. The problem with the fractals especially the 18-year cycle ones is in the accuracy of the data and the insufficient sampling.

As I mentioned before, I need to review your work posted on GEI before, in order to see how you've overcome the above limitation with the K-waves. I will probably ask a few more questions very soon, if you don't mind.

I think anyone from an engineering background has an advantage with solving puzzles - I studied mechanical engineering and believe there is logic to what happens in the markets. I've read Fred Harrison's books and articles and know there is an 18-year cycle in 'human activity' so when it reaches a peak in property speculation like in 1973, 1989 and 2007 then a recession follows. This produces stress in the financial system which causes currencies to become volatile as investors seek out the safest place for their money - this activity in my opinion is not random.

Because the dollar is the reserve currency there is first a flight to safety and then a flight back out as recovery looms and the recession eventually ends as growth goes positive again. This action IMO is what produces the fractal pattern, so it has to complete in the same way as the other two as people look to make money again and take on risk in the months ahead.

That's why I don't think you need lots of samples to prove that it works - human behaviour is predictable.

I'll be happy to try and answer other questions on my fractal theories.

[Catflap]

Dollar looks to now have a bearish head & shoulders pattern - best seen on this site:

http://quotes.ino.com/chart/?s=NYBOT_DX&v=d3

Already has a negative MACD crossover on the daily chart as well - breaking the neckline on the dollar would give stocks a kick higher led by commodity stocks as usual.

[Catflap]

What was that black candle that you mentioned in another post. I understand the red and the white (or black and white), hanging man, hammers, dojis, but where the heck on earth the black one (in the context of red and whites) came from?

Many thanks.

Knew there was something I saw earlier but hadn't answered!

The long black candle was on the dollar index on February 19 - that's where the dollar peaked, very bearish at the end of an uptrend.

[romans holiday]

MACD is a momentum oscillator that lags too much, even more so on a weekly chart. The long black candle and red hammer on the daily chart is NOT bullish!. The 'Catflap dollar fractal' says the next move is down and it should last 6 months - IMO this has simply been a multi-week advance for the dollar in a multi-month decline.

What sort of timeline are you most comfortable trading Cf? I think it helps to avoid confusion if a timeline is clarified.  For myself, I'm not a short term trader, more medium/ long term, and accordingly I find the momentum indicators more useful [while also considering "fundamentals"].  I'm assuming you're more interested in the short/ medium term for trading, and accordingly find candlesticks of more use. A nice passage on candlesticks here with the time-line in mind:

In his book, Candlestick Charting Explained, Greg Morris notes that for a pattern to qualify as a reversal pattern, there should be a prior trend to reverse. Bullish reversals require a preceding downtrend and bearish reversals require a prior uptrend. The direction of the trend can be determined using trend lines, moving averages, peak/trough analysis or other aspects of technical analysis. A downtrend might exist as long as the security was trading below its down trend line, below its previous reaction high or below a specific moving average. The length and duration will depend on individual preferences. However, because candlesticks are short-term in nature, it is usually best to consider the last 1-4 weeks of price action.

[Catflap]

What sort of timeline are you most comfortable trading Cf? I think it helps to avoid confusion if a timeline is clarified.  For myself, I'm not a short term trader, more medium/ long term, and accordingly I find the momentum indicators more useful [while also considering "fundamentals"].  I'm assuming you're more interested in the short/ medium term for trading, and accordingly find candlesticks of more use. A nice passage on candlesticks here with the time-line in mind:

Because I'm self-employed and not usually at a computer during the day then I prefer swing trading periods of around 2/3 months between market cycles. I've been keeping a core position on corrections as I know it's a cyclical bull market that still has another 6 months to run. If I get things wrong and the market quickly moves against me then I've still got my core position - in a way these are short-term buy and holds which I'll review nearer the time.

I originally wanted to adopt the value based investing approach of Benjamin Graham but hated losing money by holding and seeing big swings down. So I've become more a trader but I prefer a mixed approach to trading and investing but it depends on what I thinks going to happen in the future - I think I'll be out of most equities in 6 months time ready to play the next bear market.

[romans holiday]

Because I'm self-employed and not usually at a computer during the day then I prefer swing trading periods of around 2/3 months between market cycles. I've been keeping a core position on corrections as I know it's a cyclical bull market that still has another 6 months to run. If I get things wrong and the market quickly moves against me then I've still got my core position - in a way these are short-term buy and holds which I'll review nearer the time.

I originally wanted to adopt the value based investing approach of Benjamin Graham but hated losing money by holding and seeing big swings down. So I've become more a trader but I prefer a mixed approach to trading and investing but it depends on what I thinks going to happen in the future - I think I'll be out of most equities in 6 months time ready to play the next bear market.

I think my approach is quite similiar in some ways, though I prefer the even longer term position trading to swing trading. That said, I am swing trading silver/dollar.  I find this easier to do as am confident about both these currencies. Silver is rising nicely here, and will look to jump to dollars at around 18.50. I think there is a fair chance that silver will become even more volatile in the future... and it is volatility I'm looking to trade.

As far as a core position goes, I consider myself a "divestor".... as opposed to an investor.  In the sense that I like my core position to be one of liquidity in the strongest currencies.

[Catflap]

I piled All-In on the FTSE100 at 5280. I've got my head above water now.

6% isn't bad for just one week - you wouldn't get that holding cash on deposit for a whole year!. Must admit, I was surprised by the strength but think it's explained by the falling pound.

So Catflap gets his hatrick against Prechter, Neeley and other EW forecasters calling for the start of a new bear market  

I spy with my little eye.... a head and shoulders on the dollar weekly?

- MACD histograms are contracting

[attachment=1375:dollar_w...y_march1.png]


Catflap's dollar fractal now sits on the 3-year EMA, just like March 1992 exactly 18 years ago to the month (remember Fred Harrison's 18-year cycle)

[attachment=1376:dollar_w...y_march2.png]

[Ziknik]

6% isn't bad for just one week
...

I've used a little leverage. I'm looking at closer to 600% in a week  

I'm feeling a little uncomfortable at 5,600.

Hopefully the coming week will be a strong one as people look back on the previous year and reflect upon an opportunity missed.

[Catflap]

Thanks to RH for posting this - Adam Hamilton is one of the few people I follow closely although I often forget to read his articles:

http://www.marketoracle.co.uk/Article17209.html

Backs up my argument and like Hamilton I also went in long on a gold fund as well as individual gold, silver and platinum shares.


This next leg in equities should be similar in time to the leg that went from July 10, 2009 to October 19, 2009 - that was a 28% rise on the FTSE 100 so a similar rise from the February lows would take us to 6478 before a much bigger correction. Looking at the 2007 double top then it seems likely this correction could be VERY big - 800 to 900 points on the FTSE.

So I aim to be out of ALL equities by early May as it could get very nasty and place a big short position there - this is just my thoughts for now, but I'll be keeping an eye on what Prechter says and recommends at that time. His points are right for shorting but his calls for the start of the next bear market have been way too early.

If the bears take the FTSE 100 down 800 to 900 points and I know another low is in then I'll be looking to get long one more time into Q3.