Posts Tagged ‘trend following’

Monthly Trade Set-Up

Monthly Trade Set-Up

Courtesy of Allan

Below is a monthly chart of the DJIA with the Monthly Trend Model and Elliott Wave analysis courtesy of Advanced GET:

 Advanced GET Mechanical SELL SIGNAL requirements [these four have already been met]: 

(1) Measured 4th wave;
(2) Oscillator back to zero line (bottom study);
(3) False bar stochastic Sell Signal;
(4) Break of trend regression channels.

What is missing, so far, is the Trend Model Sell Signal. But on a Monthly chart, this will always be a lagging indicator with way too much lag to be of any worth in trading. We have seen in the last two monthly bars how that Monthly Trend Line has attracted prices, but repelled them both times. Will the next time finally break the back of this last remaining vestige of the 2009 bull market?

I find it fascinating how this particular trade set up works on all time frames. I used it last week on an hourly chart that I sent out to subscribers that just nailed a mid-day reversal. Here today, we see how it applies to a much larger time frame. I have been using this trade set-up since 1995 and it works just as well now as it did the 20th Century. For our purposes, giving us an edge for the next few months will have to do.

******

Here’s Allan’s weekly chart which helps illustrate his point: the weekly chart has already signaled a sell; it takes longer for the monthly charts to change courses compared to the weekly charts. – Ilene 

Allan’s “Trend Following Trading Model” is based on his trend-following trading system for buying and selling stocks and ETFs. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here.  For a more detailed introduction, read this introductory article.


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SPX – very short term model

SPX – very short term model: UPDATED

Courtesy of Allan  

Below the SPX 30 minute trend model along with the False Bar Stochastic:

What I see here is:

First, an excellent bevy of short-term timing signals generated by this 30 minute trend model;  

Second, the False Bar Stochastic is in "Down Trend" mode, meaning that the apparent Buy signals on the stochastic are ignored, but the Sell signals are very actionable; and 

Finally, that 1177 is a key resistance level, at least for the short term and if and when prices approach that level, assuming the FBS confirms,  it may present an opportunity to add to existing positions, or enter, Short. 

******

For non-chartists like me, I asked Allan what the FBS was and how to know whether it "confirms."  Here’s his response:

"FBS is a False Bar Stochastic and it identifies trending prices so as not to trade against the trend.  When you see a horizontal black bar on the stochastic chart, it means not to take those trades, instead await for the next stochastic signal (crossing of lines either above 80 or below 20) without a black bar.

The only two ways of knowing if there is a new stochastic signal is to own Advance GET software or look for an update on my published charts."

So if the black bar is on the bottom, it’s a don’t buy, and if the black bar is on the top, it’s a don’t sell.

Allan’s newly launched newsletter, “Trend Following Trading Model,” goes with his trend-following trading system. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here.  For more details, read this introductory article.


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Greatly Overvalued Stocks – Time to short?

Greatly Overvalued Stocks - Time to short?

Courtesy of Allan

Ilene, at PSW, sent me this list of overvalued stocks in the news fromOckham Research and asked me to run them through my system looking for short sales.  I’ve run them through my trend models and have posted results, in red italics.  Below that, a few of the charts that look especially Bearish.

Caution: Greatly Overvalued Stocks in the News

At Ockham, we recently released a new stock screening tool on our site that we now use daily around the office to more efficiently wade through our coverage of over 8400 stocks.  One interesting filter we used today was to see stocks that have our Greatly Overvalued rating, and also have been mentioned in the financial media within the last 30 days according to RazorWire.  These stocks represent a subset of our most negative ratings that are also attracting some attention lately either because of earnings releases or some other reason to be mentioned on business television or influential financial blogs. 

Ockham’s "Overvalued" Stocks:       Allan’s Trend Analysis

Occidental Petroleum (OXY): New Buy as of Friday’s close;
ArcelorMittal (MT):   Sell Daily, New Sell on Weekly;
Caterpillar (CAT):  New Sell Pending, trigger is close under 67.88
Johnson Controls (JCI):   Still in uptrend, but Sell under 33.09
PACCAR, Inc (PCAR):  Still in uptrend, but Sell under 45.65
Vornado Realty (VNO): Uptrend;
Kinder Morgan Energy Partners (KMP):  Daily Sell, Weekly Long;
Eaton Corporation (ETN):  Daily Sell signal; Weekly still Long;
Fidelity National Info Services (FIS): Strong Uptrend;
Cliffs Natural Resources (CLF): Daily Short, Weekly new Sell;
Cree, Inc. (CREE): Daily Short, Weekly Sell pending;
Eastman Chemical Company (EMN): New Sell on Daily chart;
BorgWarner, Inc. (BWA): Strong uptrend;
Autoliv, Inc. (ALV):  Daily Short, Weekly Sell pending;
M.D.C. Holdings (MDC):  Uptrend;
Redwood Trust (RWT):  Daily Short, Weekly Long;
Imax Corp (IMAX):  New Sell on Daily;
Permian Basin Royalty Trust (PBT): Strong uptrend.

 
Best looking charts for Selling
 

 

 

 

 

   

 

Allan’s newly launched newsletter, “Trend Following Trading Model,” goes with a trend-following trading system he’s been working on for years. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here. For a more detailed introduction, read this introductory article.

 


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Duel in the desert

Allan, thinking he’s getting the first whiff of the elusive sell signal--is he imagining it? - Ilene 

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. 

*****

Allan’s new newsletter, “Trend Following Trading Model,” goes with the trend-following trading system he’s been working on for years. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here.  For a more detailed introduction, read this introductory article.


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BIDU Weekly

This is perhaps one of the best examples of Allan’s trend trading system.  Allan says that BIDU is an excellent trender and his system would have got you in sometime in January, though the last weekly signal was back in 2009. For you bears, his system should catch a trend reversal early.  (It’s hard not to look at that chart and anticipate a BID adieU moment, but maybe that’s just me.) Anyway, Allan’s system is easy to trade and you’d only be looking at signals on Monday morning. – Ilene 

BIDU Weekly – Update 

Courtesy of Allan

I wrote up the Weekly Trade Model of BIDU back in January.  It has turned into one of big success stories of the Trend Models:

 BIDU Weekly Trend Model

We knew in January that BIDU trended well and was a good stock to trade in a longer-term model.   Although they all don’t trend this well, having one or two that do, make up for any that don’t.  Another "Basket" idea in the making? 

 

And the market as a whole?  

Says Allan: Back to Trends.

Notwithstanding my personal trend line, the market’s trend has been up since mid February.

 

SPX Daily Trend Model

 

The beauty and simplicity of this directional model cannot be overstated.  The up-trend continues, as it will until it reverses.  Trade accordingly.

Allan just launched a newsletter, “Trend Following Trading Model,” to go with the trading system he’s been working on for years. His trend-following method is chart-based and objective. Most trades last for weeks to months. Allan’s offering PSW readers a special 25% discount. Click here.  For a more detailed introduction to the Trend Following Trading Model newsletter and trading system, read this introductory article. – Ilene 


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Zero Hedge

BBC Claims Iranian Government Is Lying About Outbreak: Real Death Toll Is 210, Not 34

Courtesy of ZeroHedge View original post here.

Given the Iranian regime's recent history of brazenly lying to the public despite its obvious culpability, we were certainly intrigued when a local lawmaker in Qom told reporters that at least 50 people had died from the coronavirus in his city alone.

Iranian authorities denied these ...



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Phil's Favorites

Don't fear a 'robot apocalypse' - tomorrow's digital jobs will be more satisfying and higher-paid

  Don't fear a 'robot apocalypse' – tomorrow's digital jobs will be more satisfying and higher-paid

Tomorrow’s good jobs will require digital skills like programming. alvarez/Getty Images

Courtesy of Christos A. Makridis, Massachusetts Institute of Technology

If you’re concerned that automation and artificial intelligence are going to disrupt the economy over the next decade, join the club. But while policymakers and academics agree there’ll be significant disruption, they differ about its impa...



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Kimble Charting Solutions

Financial Crisis Deja Vu: Home Construction Index Double Top?

Courtesy of Chris Kimble

Most of us remember the 2007-2009 financial crisis because of the collapse in home prices and its effect on the economy.

One key sector that tipped off that crisis was the home builders.

The home builders are an integral piece to our economy and often signal “all clears” or “short-term warnings” to investors based on their economic health and how the index trades.

In today’s chart, we highlight the Dow Jones Home Construction Index. It has climbed all the way back to its pre-crisis highs… BUT it immediately reversed lower from there.

This raises concerns about a double top.

This pr...



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Insider Scoop

A Peek Into The Markets: US Stock Futures Plunge Amid Coronavirus Fears

Courtesy of Benzinga

Pre-open movers

U.S. stock futures traded lower in early pre-market trade. South Korea confirmed 256 new coronavirus cases on Thursday, while China reported an additional 327 new cases. Data on U.S. international trade in goods for January, wholesale inventories for January and consumer spending for January will be released at 8:30 a.m. ET. The Chicago PMI for February is scheduled for release at 9:45 a.m. ET, while the University of Michigan's consumer sentime...



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Biotech & Health

Could coronavirus really trigger a recession?

 

Could coronavirus really trigger a recession?

Coronavirus seems to be on a collision course with the US economy and its 12-year bull market. AP Photo/Ng Han Guan

Courtesy of Michael Walden, North Carolina State University

Fears are growing that the new coronavirus will infect the U.S. economy.

A major U.S. stock market index posted its biggest two-day drop on record, erasing all the gains from the previous two months; ...



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The Technical Traders

SPY Breaks Below Fibonacci Bearish Trigger Level

Courtesy of Technical Traders

Our research team wanted to share this chart with our friends and followers.  This dramatic breakdown in price over the past 4+ days has resulted in a very clear bearish trigger which was confirmed by our Adaptive Fibonacci Price Modeling system.  We believe this downside move will target the $251 level on the SPY over the next few weeks and months.

Some recent headline articles worth reading:

On January 23, 2020, we ...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Chart School

Oil cycle leads the stock cycle

Courtesy of Read the Ticker

Sure correlation is not causation, but this chart should be known by you.

We all know the world economy was waiting for a pin to prick the 'everything bubble', but no one had any idea of what the pin would look like.

Hence this is why the story of the black swan is so relevant.






There is massive debt behind the record high stock markets, there so much debt the political will required to allow central banks to print trillions to cover losses will likely effect elections. The point is printing money to cover billions is unlikely to upset anyone, however printing trillions will. In 2007 it was billions, in 202X it ...

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Members' Corner

Threats to democracy: oligarchy, feudalism, dictatorship

 

Threats to democracy: oligarchy, feudalism, dictatorship

Courtesy of David Brin, Contrary Brin Blog 

Fascinating and important to consider, since it is probably one of the reasons why the world aristocracy is pulling its all-out putsch right now… “Trillions will be inherited over the coming decades, further widening the wealth gap,” reports the Los Angeles Times. The beneficiaries aren’t all that young themselves. From 1989 to 2016, U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More ...



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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.