Monday, July 20, 2009

Sonoran Desert Monsoon


A monsoon is a seasonal prevailing wind that lasts for several months

The North American Monsoon (NAM) occurs from late June or early July into September, originating over Mexico and spreading into the southwest United States by mid-July. It affects Mexico along the Sierra Madre Occidental as well as Arizona, New Mexico, Nevada, Utah, Colorado, West Texas, and California. It is also sometimes called the Desert Monsoon as a large part of the affected area are the Mojave and Sonoran Deserts.



Staying with the theme of trading the leveraged ETF's of the Russell 2000 Index, TNA for Longs and TZA for Shorts, here are today's 60 minute charts for a continuing Long mode:



Above is the chart of the RUT index, an almost perfect week long Buy Signal. Almost, because there are five bars on the chart that turned red, indicating a brief Short. But looking carefully at the bottom CCI indicator, there never was a confirmation of the Sell Signal. In other words, the CCI never broke below it's zero line.

Is this a rule?

That's up to the trader. Enough of these non-conformations and yes, it should be a rule. But even if one flipped Short for five bars, not much harm was done.


Bringing up the above chart of TNA there is again, an almost perfect week long Buy Signal, interrupted only twice by brief Sell Signals, again unconfirmed by the CCI indicator. The gain on this chart is almost 7 points, or about 30% for the past week.

Another noteworthy chart, the Nasdaq 100:


From it's Buy Signal one week ago, a flawless uptrend. But also note how close the reversal stop is for a new Sell Signal.

A close-up of today's hourly action:




And finally, the Dow Jones Industrial Average, hourly chart for the past week:


Wednesday is the date of the super moon. With hourly reversals so close and the unknown effects of the super moon almost upon us, this has the making of great trade set-up. As always, we trade the trend, not the forecast.


A

26 comments:

Anonymous said...

Allan, if we trade the trend and not the forecast, so we should just ignore the forecast, NO ???

Anonymous said...

In other words, stop being so damn wishy washy. Which is it? Trade the trend and forget about it or second-trade? Of course to trade the trend, one has to be right about it. Following Allan, his trend forecast of impending doom coinciding with the 5th wave bruhaha is killing you right now. LOL!

Allan said...

Re: Ignoring the forecast

I don't care what you do or what you think or what you ignore or what you are confused about. Got it? I don't care.

Re: wishy washy

See last comment.

Anonymous said...

Allan - what trading software do you use to generate these charts. thanks

Allan said...

Re: trading software

What you are seeing is screen shot of an eSignal real time chart with the addition of Blue Wave Trend Models and Advanced GET. The indicators at the bottom of the charts are either part of the BW package or part of the AGET package.

Anonymous said...

I use a Reuters system comparable in price to Bloomberg but its charting is simply not good. May I ask what this package runs per month. I see you buy Advanced GET for about 3500 bones and I imagine Esignal is a monthly fee. Also, where is the Blue Wave Trend Models (is that within esignal too?) Thanks Allan and nice work

Allan said...

Re: Costs

eSignal = $66/month
AGET = $3,000 (approximate) one time fee
BWT = $3,000 (approximate) one time fee

Anonymous said...

You don't care cause this is only a blog about what you think. I wouldn't give a damn either since the readers are getting the value of free with no guarantees or warrantees. And I will damn sure take credit for the crash when it comes....be it 5, 10 100 years from now!

Anonymous said...

my FAZ, TZA, BGZ are all killing me right now !!!

Allan said...

Re: taking credit for the crash

Nope, it's not going to be me who causes it, nothing to take credit for. The first leg down in the markets took 18 months, this counter-trend up move is now five months, less then a third of the time of the initial drop. This is all normal, including the clowns who are coming on whining about their "short" positions and "where's the crash?" The more they bellow, the closer it comes. But I not going to take credit for it, for calling it, or for forecasting it......just for trading it.

Anonymous said...

Allan, Just curious to know, which experience causes you to feel more heat, trading or blogging? LOL my friend, keep up the excellent work. Joe/NYC

Allan said...

Joe,

No contest. Much more grief blogging, but it does sharpen one's skills for combat, especially if during trading you can imagine your winnings coming from the pockets of Anonymous bashers.

Anonymous said...

30% in one week. Looks like you have found something that works for you.

As long as you aren't overtrading, and have a way to reduce and minimize whipsaws, then I can only conclude that you must be amassing a fortune at this.

I wonder, why do you even bother with long-term forecasts if your short term trend models are so effective?

Anonymous said...

Reality is, this a nice rally wave that just started, wave C-up of (B). It has a bright future. This rally is going to be a five waver, waves (1), (3) and (5) will push prices higher, and waves (2) and (4) will retrace a portion of waves (1) and (3). So far wave (1) up is impressive, and not finished. But it will be important to not get too carried away with this wave C rally. It is not a Bull Market, it is the final important Bear Market Rally. It could last into autumn, and reach price levels 15 percent above where they sit tonight. However, once finished, wave (C ) down will follow, a dramatic decline. That wave could end the Bear Market, but Lord knows what carnage it will leave behind it.

L

Anonymous said...

Good stuff Allan! We are getting close, or maybe not! Could be just another temporary pullback on the way to SPX 1000+. Robert McHugh claims in his EW analysis that we are just getting started a C-wave rally and it will last into Sept. If he is right, you will make a lot trading the trend, but your forecasting will be dead wrong!

- cramar

Allan said...

why do you even bother with long-term forecasts if your short term trend models are so effective?

Because prudent money management prohibits trading one's entire wad on day-to-day movements while the longer term vision allows conservative deployment and diversification among asset classes.

Anonymous said...

so I guess you are trading with the trend with part of your money, NO ???

Anonymous said...

seriously, Allan, I don't understand why you bother with the long term prediction, and sometimes it seems you are talking from both sides of your mouth ...

a couple of Friday's ago, didn't your weekly flip to short ???

Anonymous said...

Exactly! The previous anonymous poster echos the reason for all anonymous posters' bashing!

Anonymous said...

Alan has been calling for a major crash (to new lows) since March. The exact opposite has occurred. Now he's doing damage control.

Here's one you can bank on.

If Alan is telling you to go long...

Load up on your shorts...

I read this blog just to fade it...It's been very profitable doing the exact opposite of what you people are being told.

Allan said...

Not only are you an idiot, you are a liar. Find me one post where I told anyone to go short. Find me one post where I told anyone to do anything. If you are fading my analysis, the last two weeks have seen me put up chart after chart of an uptrend in progress and how my model has been trading it. Now I have to take time out of my trading to deal with another loser with his head up his ass. Get off my blog and stay off, you pompous esohbee.

Anonymous said...

Allan, don't let the illiterate posters rile you up. Those of us "in the know" about what you HAVE POSTED AND ON WHICH SIDE OF THE MARKET(the right side) you've been on...we know the truth. You've been spot on! I just wish I'd been trading similarly.

Working on it and thanks for your blog!
Mike

Allan said...

Mike - thanks for that, it is incredibly frustrating to see how clueless some are in terms of reading and understanding my blogs. It does help to hear from traders like you who do get it.

A

Anonymous said...

There's an idiot here alright.

How's NNVC been working out for your readers??? What a piece of garbage. I guess you telling readers that they should all buy 10,000 shares of that load isn't telling anyone to do anything either. Keep up the fantasy writing Alan, it's making me money!!

The Sound Center said...

Thank you, Allan. I appreciate it.

The super moon also brings out the idiots.

Anonymous said...

Allan why don't you just go to a paid subscription model and get rid of the riff raff