Monday, April 19, 2010

Chart updates

I sent an interim to my email list this morning, updating the price threshold for SDS flipping Long in its Daily Trend Model.  SDS is moderately leveraged and represents a good proxy for any intermediate market downturn.

 DJIA Daily Trends with EW analysis

Once again we can see a divergence between last week's highs and the Elliott Oscillator in the bottom panel.  A break down here will represent a Mechanical Sell Signal, although for our purposes, a break of the trend line will suffice.

NNVC Daily Trend Model with EW Analysis

Meanwhile, no such divergence appears on the NNVC chart, suggesting a continuing Wave 3 advance, subject to minor pullbacks along the way.  It would take a close beneath $2.04 to change the Daily Trend to down.


FAZ Daily Trend Model



Sunday, April 18, 2010

Volcanoes and Black Holes

While researching natural disasters and the stock market, I came across an engaging, albeit out there, theory about how this Iceland volcano may be related to research in France using particle accelerators to create a black hole.

April 13-14 2010: Iceland Eyjafjallajokull volcano erupts again, and its volcanic ash goes over Europe over the next few days and grounds airplanes at airports across Northern Europe. There is a concern that a larger volcano Katla near it could erupt soon. Iceland has more than 100 volcanoes, many could erupt soon. This could be a beginning to major volcano eruptions in Iceland and elsewhere that could cool off the earth, ground air traffic, cause no summer and severe winters. And note that April 14 a bright meteor was seen over Wisconsin. 
Could this volcano and recent earthquakes be related to the CERN LHC particle accelerator experiments in France - either because a Black Hole has already been created by the CERN LHC and is eating earth's core, and could cause increasing earthquakes and volcanoes around the world, leading up to December 2012 Doomsday, or because the CERN LHC experiments may directly affect earth's core and cause quakes and volcanoes. Note that 70,000 years ago the Toba supervolcano erupted in Indonesia and nearly caused the extinction of mankind then. Volcanos can be a major problem for man's survival on earth.

In the just published issue of The Elliott Wave Theorist, Robert Prechter suggests that a culmination of important stock market cycles has pinpointed the next 10 days as the most likely beginning of his now on-the-surface somewhat discredited yet still simmering beneath in the whelm of the possible, macro wave count of transition from a Wave Two counter-trend bull market to a stunning and devastating Wave Three bear market lasting for about the next five years. 

Prechter's Latest: The Most Important Cycle of the Past Three Decades
Prechter also uses detailed charts and text to spell out a never-before-discussed seven year cycle: he says it amounts to "the most important cycle duration" of the past three decades
So what does all of this have to do with Sunday, April 18, 2010? 

It is a day void of real time market volatility and it's effects on our own, personal market psychology and attitudes.  An opportunity to sit back and reflect upon where the market has brought us this past year and where it might be taking us going forward and what if anything can be done about it.

I have stopped trying to anticipate market turns, it is not a high probability game.  In its place, I have adopted a trend following paradigm and have crafted (read: lifted, tweaked and improved, from a magazine article) a strategy for its implementation that has been working well since its inception, January 2, 2010.  

If the worst case scenario were to unfold, it will do so with my trends on board and account asset values will surely follow, notwithstanding wave counts, volcanoes or French black holes.

Qué Será Será.

A
 

Saturday, April 17, 2010

Duel in the desert



Seated nine rows behind the Phoenix net, I contemplated the subject of today's Blog while fiercely observant and engaged in a great playoff game, a great hockey game and the great, great, back and forth, up and down, volatile second period when five goals were scored. 

How pathetic, or how dedicated, can I be to be thinking about the stock market in the middle of all the electrified intensity of a Stanley Cup playoff game involving my beloved, Detroit Red Wings?  

So I decided to lead with hockey today, testing my readers patience while at the same time rewarding those who read through the photo and opening paragraph to these words:   

SPX Daily Sell Signal



I sent out my analysis to the email list earlier today.  But this is not that complicated.  My Daily models, the ones that suggest intermediate term trends, are beginning to change.  Not all of them, not yet, but some of the more significant ones, including the one below, which is an inverse ETF for China stocks:

 FXP Daily Trend Model

You don't have to bet the ranch here.  Nor do we have to assume Armageddon is at hand, plume of volcanic ash, or not.


But what is suggested is to walk the talk; when the models are flipping, govern yourselves accordingly.



A


Friday, April 16, 2010

QQQQ Daily

The low so far today on the QQQQ was 49.20, just three ticks above the Daily Trend Model's reversal number:

QQQQ Daily Trend Model


Obviously, today's low and the trend reversal stop remain key levels going forward.  The up trend from mid-February appears to be in jeopardy, but as Yogi suggested, "It ain't over 'til its over."

X

Last weekend I sent out to my subscribers a Long and Short, "Trades of the Week."   The Short was X, which can be seen reversing from LONG to SHORT on last Friday's close:

X Daily Trend Model

As you can see, the trade meandered the first few days but X has now dropped sharply and is currently about 10% lower then last Friday's close.  The previous Sell, in late January, was worth about a 25% drop in the price of the stock.  That January Sell was followed by a February Buy generating about 30% in price gains before last Friday's reversal to a Sell.  X trends well.


SDS Mechanical Buy Signal

Below the SDS chart with the Advanced GET mechanical Buy signal set-up:

SDS Daily Trend Model

If this set-up hold through the close, then a Buy signal would trigger, suggesting a move up to at a minimum, the high of the previous 4th wave, or about 32 on the chart.  The significance of the Daily Model reversing cannot be overstated.  Its not long yet, but its getting there.

An interim SELL

About 90 minutes into trading today, the SPX Daily Model looks like this:


If this signal holds up through the close, it will be the first Sell signal since mid-January in the all important Daily Model.

Thursday, April 15, 2010

QQQQ

I sent an Intraday Alert to my email list this morning, highlighting some of the healthy gains from the most recent Buy signals in SPX & QQQQ Daily Models.

I send so many of these Intraday tables out that its easy to miss some great trades described therein.

SPX Daily:  BUY @ 1094.87   Current: 1211.62 = +116.75;  +10.67%

QQQQ Daily: BUY @ 44.47   Current: 50.03  =  +5.56;    +12.5%

In both cases, these most recent signals are from mid-February.

Below is a two-year chart of the QQQQ. Embedded in this chart are Trend Model 4.0 trading signals that were generated along the way:

QQQQ Daily Trend Model 4.0



TEVA

In the midst of a mindless rally, a new Short has garnered my attention; TEVA.  Why has a hot stock in a hot sector (Generic Pharmaceuticals) flipped to a Sell in its Daily Trend Model?  We don't know, nor do we care.  Respect.

Below are two TEVA charts.  The first one uses the standard Trend Model 2.0  and the second one uses my new beta version Trend Model 4.0  with wider settings that result in fewer trades at the expense of efficiency in both entry and exits.   This will be a good test and example of how these two models differ in their approach to trend following.


TEVA Daily Trend Model 2.0


TEVA Daily Trend Model 4.0
(Bar colors & price entries are from Model 2.0)

Wednesday, April 14, 2010

The fab five

No, not that fab five.  These are the original five stocks that were a part of the Trend Following private email list at inception.  Here they are with their most recent Trend signals.

AAPL Daily Trend Model 2.0


AMZN Daily Trend Model 2.0



BIDU Daily Trend Model 2.0




GOOG Daily Trend Model 2.0


GS Daily Trend Model 2.0