CURRENT AND NEW CHARTS
ASX 200 INDEX – WEEKLY CLOSE –SEMI-LOG. (5877)
This chart has proved to be an excellent road map for the primary trend, especially since 2003. From the bear market low in 2009, it is currently not quite making the much-touted 6000 level, which I discussed in the last issue of YTE. I had mentioned the 15th and 16th of the month as times worth watching. These have provided important lows so far in
2015 on 16/1, 16/4 and 16/4 signaling the possibility of a significant correction now with the index falling short of the 6000 level and action on l7/4 flashing a red light for further downside – best viewed on the half hourly chart. I had suggested March as the next important time frame for a possible high and the weekly close chart with a resistance line originating from the 2013 high. There were lows in October/ December 2014 and a higher low in January for the amazing bull run into April with prospects of a significant correction into the May/June time frame. The Dow Jones continues to be the driving force in global markets. GANN DATES not to be ignored – Apr 7 – 108 TDS and April 20 and 30.
ASX 200 INDEX – DAILY CLOSE – ARITHMETIC (5877)
This is an extremely interesting chart, which assists in defining the pivot points and second to the all important half hourly chart. The lines and support and resistance are enlightening especially for short term traders.
Are the February/March highs a rounding top? I have taken the range from the December low and March highs using one of Michael S. Jenkins’ techniques of dividing the range into 1/8th 5876, Gann 1/3rd 5704, 50% 5566 and 2/3rdas potential target areas. Pivot point support areas are 5785-5752-5545. The market likes to make 50% retracements with 5556 as a possibility.
ASX 200 INDEX – 20 pt. P&F 1 box close (5877)
One of my favorite charts, which defines the support and resistance levels so clearly and the accumulation/distribution areas just using 0’s and X’s. Note: the breakout in January above the 5460 resistance, with a row of X’s for the bull run initially stopped at 5820 and the pullback 5760 making higher highs and higher lows culminating at 5860 and breaking 5840 for a row of 0’s for a change of trend. Support levels: 5800-5760-5640-5540 and 5460. I have drawn in a resistance line (CD) and support line (A-B), thus creating a ‘neat uptrend channel’ (E-F) a support line of importance as the market corrects. I regard these hand drawn charts as being superior to those drawn on a limiting computer screen. These are the charts that shout whilst the others stutter!
ASX 200 HALF HOURLY (5877)
All investors and traders will benefit having access to this chart, which continues to be THE MOST AMAZING CHART I HAVE EVER PLOTTED in my career spanning many decades. It is so simple to construct using the precise half hourly figures plotted on 1 mm chart paper and using a Gann Square overlay, which defines the geometry. The patterns and trend lines provide the intra day trade able trends. These of course make up the “big picture” analysis. The P&F charts are extremely complimentary making the support and resistance areas of accumulation and distribution for the on going trends.
I use the “tic data” from MARKET ANALYST 6 software and view the chart action on a computer screen displaying my favorite indicators on a 1 minute time frame – Directional Movement 8 period and 3/5/15/20/30 period moving averages, and excellent screen dump. The various moving averages is calculated at the end of day and positioned on the chart as colored dots.
For this very special chart I have prepared it from 16/1/2015 with 30 period moving average and placing several Gann Angle lines of importance. As of Friday 17/4, XJO was breaking support and closing below all m/as, which had been “clustering”. DM – +DI 19, -DI 27, ADX 13.8 confirm a short market. The low ADX is indicative of a ranging market, which should now turn up for a trending move. The best moves can and do start from the 16 area.
SPI – SYCOM – NIGHT TRADING 16/4/15 – 17/4/15
This contract continues to be the most difficult one to trade and movements can be quite irrational at times putting Sydney traders at great risk when they wake up in the morning to find that the action on Wall Street can put them on the wrong side of the market. The current action using MARKET ANALYST 6 is on a 1 minute time frame with 8 period DM. The Sydney market traded up to 5945 close at 4.29 pm. The cash market closed at 5947. At 5.10 pm futures traded at 5938 with a bearish c/s crossing below the 30 m/a (blue line) with DM crossing over and taking out the Parabolic Stop from the long position. It then proceeded to decline in an orderly manner making a low 5921 at 5.43 pm. The P.S. on the short trade was taken out with the open body blue c/s 5.43 pm.
The P.S. for the long trade was accompanied by further consolidation before commencing an up move (crossing the 30 m/a). Basing formation 5929 at 6.10 pm DM crossover 5.55 pm with ADX moving up to 70 before turning down again. The SPI had a glorious run with open body candlesticks to high 5939. At this point, I decided to print this splendid example of how DM performs in very fast trends. Why all this happened
I do not know – but does it really matter when you are following price. The morning of 17/4 is the unknown quantity and where Wall Street takes over. Time: 5.10-7.28 pm, certainly fast action for the night owls.
ASX GOLD INDEX – SEMI-LOG – Weekly Close (2876.9)
A very interesting chart where David Hunt in his PHG group is always quick to perceive a significant turning point, (which he did) and provides his members with some sensational trades for the percentage swing. He is always there when it is time to take some profits as well as determines the appropriate stop losses, which is so necessary in these extremely volatile markets. The index right on the weekly close chart uptrend line from 7//11/14 1684.50. Some tradable swings occurred during 2013 and continued into 2014.
The $64 question now: is this all part of a base formation for significant move for the rest of 2015? DM works extremely well on this market and the 144 Gann Square. David frequently has evening webinars on the gold sector. firstname.lastname@example.org.
N.Y. LIGHT CRUDE OIL – Monthly Semi-log Close (47.60)
Gann says start with the monthly which was indeed the chart to give the appropriate signals along with the P&F chart , the forerunner of a spectacular position trade from 90.70 crosser in DM 1/10/14. The final low 47.60 on 31/1/15. DM crossover 1/4/15 50.09 DI’s +57 -43 ADX 13.9.
Current close 17/4 55.74 DI’s +65 – 35 ADX 19.9, P.S. 53.19. I had prepared some charts for a colleague who was getting “whipped” around but the end result of this trade and represented a $40,000 profit on a one contract basis. The daily chart is a huge one on my full size architects drawing board. A case for keeping up to date charts for what has been a newsworthy subject in recent months.
IRON ORE – Weekly – Arithmetic Scale (50.70)
Iron ore is yet another metal persistently discussed in the financial news. Last comment it was approaching the $60 support level, which failed to hold with a more recent low of 47.30. Our Federal Treasurer made front page news with a prediction of a 35.00 low which, if indeed would create further problems in balancing the budget. Had the Treasurer been keeping a chart from the all time high 191.00 18/2/11, they would have been alerted to the major change of trend and the huge top formation.
Accessing Premium Data’s great charts and data provide the necessary information for trend following. It is absolutely essential to maintain up to date charts especially if you were trading BC IRON, FORTESCUE and ATLAS, not forgetting BHP & RIO. The current rise – a counter trend rally.
URANIUM – Weekly Close
Another excellent chart from Premium Data where following the long term trend would have alerted you to the changing trend after the 8th June 2007 all time high $136.00 has taken its toll on Aussie uranium stocks with only very few being actively traded and the majority gone off the board. ERA and PALADIN are worth following. The metal made a low of $28.50 on 6/6/14 – 7 years from high to low both in the month of June. More recently a rally to $44.00 11/11/14 with a pullback to $35.40 9/1/15 is putting a floor under the price and making a higher low if it rises above $45.00 for eventual recovery. David Hunt covers its trend in his weekly reports. Stay tuned!
BULLISH REVIEW – Stephen Briesi – Editor in Chief – COT Reports
I believe this is an essential report, especially in primary trends both up and down. Stephen has been doing this work for over 24 years. This is a must for knowing who is doing the buying and selling in global markets. It is presented in his weekly reports with colorful charts and comment for each sector. It’s invaluable information especially for hedgers. The current example is on the U.S. Dollar Index and Precious Metals to 17/4/15. He comments that the U.S. Dollar Index now showing weakening upward momentum, a technical warning to dollar bulls to expect a pullback. Hic comment on gold: a small bullish divergence mitigated by a negative Relative Trend Strength.
JEFF GREENBLATT – FIBONACCI FORECASTER – Aussie Dollar
Another analyst in my “top” four on the globe with his bi-weekly reports featuring his stunning candlestick charts using Dr. Mircea Dologa’s Pitchforks and 50/200 moving averages in the various time frames. There are some recent interesting charts and analysis on our currency, which has been in a primary downtrend. “Last week they hit the 108 hour high and I told you it would be tough to take out. You never know what will happen but out of that they retested the low, RBA sequence or not. That retest totally retraced the RBA sequence and I guess it’s a little surprising with the ease it recovered. Perhaps they aren’t dropping rates so soon after all.
They closed the week right on the 240 hour line, which is 3600dg so that’s the next inflection point. We’ve seen charts retest those lines from below and not able to overcome, right? The retest of the low, which created the secondary low, is a small double low where the lift came on 175 hours and you know that’s 2618dg.
That’s what held the bottom. Getting back to the high where they are wrestling with the 240 hour line you can see they are also going to hit 261 hours very soon. 261 hours is not tied to any degree, its just 261 hours. There’s a good chance that will be where it breaks one way or the other and right now odds favour lower. The best trade you can get out of this if it were to happen with a clean drop off the 240 line close to 261 hours.
I’m speculating but if it does that, you would have moved from around .7760 to .7710 where you’d get another inflection with the 1620 line and it could stay in a range there. So it could be a drop to start the week and then a consolidation after than. We’ll see how close we come. Obviously if it breaks above the 240 line, we have another matter altogether but I think the lower scenario is the higher probability. On a 180 chart it already represents a big reversal.” www. lucaswaveinternational.com Footnote: On 17/4/15 it made a low
of .7753 and Sydney Close .7785 – nice work from Jeff. It is worth following our dollar with Directional Movement.
STOCK CYCLES FORECAST – Michael S. Jenkins – S&P 500 Weekly Close
Another example of the amazing chart and analysis by Michael who is the most knowledgeable on the importance of cycles, currently looking at the 90 month resistance. I have drawn the uptrend line off the 2011 low. What he did say – “In the summer of 2007 I warned of an impending top because we were 90 months from March 2000, and very frequently the 90 month cycle – give or take, results in significant market turns. Today – April 10 we are again 90 month from the October 2007 top and a place to look for major time resistance. Market tops and bottoms are often in proportions to each other and the high in 2007 at 1576 times l.33 is 2096, which is where we have met price resistance for the past month. If we continue back consecutive 90 month cycles we hit very close to many of the significant market turns for the last half century.”
Michael’s recently published book ‘Stock Trading Using Planetary Time Cycles – The Gann Method Volume 1’ was a big hit and a favorite amongst his serious Gann students. Volume 11 ($400) is now done and is relevant only to buyers of Volume 1 ($425). However, if bought as a pair at the same time, it costs $700 for both. You will need the computer programs and methods explained in that first Volume to understand the 2nd. Email him for more information as the website does not cover it yet. See website or link here for Volume 1: http:// www.stockcyclesforecast.com/Gann%20Book.html YouTube video: http://www.youtube.com/watch?v=a6oz7telIVs I have just received my copy and I am now looking forward to reading it. There is much to be gained from this study.
VANTAGE POINT – ASX FINANCIALS INDEX (7011.3)
This is an excellent provider, particularly for investors and traders who do not have sufficient time to do their own charts and analysis. I have been using their charts for some time now and continue to be impressed with their highly successful ratio of capturing the main trends with specific entry and exit points. The current example for the big run in our Financial Sector from January this year, using their 3 Predictive Moving Averages and Indicators. They frequently have webinars with Greg Firman, a very experienced long term trader using VP software, which is also user friendly. It’s all about capturing the big moves! www.TradingProfits.com
DR MIRCEA DOLOGA – Pitchforks – Euro – Dax and Copper
I consider Dr. Dologa to be the foremost authority on Technical Indicators on the globe. He has written three amazing textbooks – ‘INTEGRATED PITCHFORK ANALYSIS’. He recently sent me a copy of a 10 page article he had written for the Society of Technical Analysis (STA) in London entitled: When and Where Time Meets Price through Pitchfork Analysis: A Little-Known Trading Technique! He explains where and when Price and Time meet with some splendid chart examples of it’s use on Euro, Dax and Copper. “Even if used, for the first time by Dr. Alan H. Andrews in the 1960s, this charting instrument wasn’t developed throughout the time to perform to its full extent. For the last twenty years, it was taken out from the trading arsenal shelves and used for profitable trading techniques. We have consecrated more than 20 years to develop, what we named “Pitchfork Analysis”, which later was even further upgraded, to finally acquire the rang of “Integrated Pitchfork Analysis”, a 1200 pages and 1500 charts trilogy professional trading book.
“The Optimal Pitchfork goes ‘hand-in-hand’ with the Best Choice of Pivots. In the 1960s, everybody started with drawing a pitchfork, which is nothing else than a sort of a “trident”, anchored on a minimum of
a three pivots. The pivot is defined, in Merriam- Webster’s Collegiate Dictionary – 10th edition 2002 as “a critical point having a major or central role, function or effect…a shaft or pin on which something turns”.
The pivots can be drawn on the chart by the trader, a task that requires experience in the evaluation of the degree of importance of each type of pivot, otherwise, they can be automatically projected by utilising the ergonomic charting software. Their form and deepness/height identify the following four types of pivots – (1) Primary used for detecting the high/low of a trend, (2) Major could be rapidly seen, before the trend is completed, (3) Intermediate, a kind of a go-between, (4) named also the pullback pivots often present at the commencement and the termination of the pullbacks. The main functional characteristics of an optimal pullback: Be chosen in such a way that the resulting pitchfork will efficiently embed the market flow.
Be drawn for the duration of a swing or trend and also be able to reverse a market, every time when this is considered by the trader.” For free excerpts and contents, go to the author’s website: www. pitchforktrader.com. It is absolutely a brilliant article and should appeal to all serious traders. It goes on to state that this type of analysis associated with the state-of the art techniques like: Elliott waves, Gann Methodology and Jenkins original time-and-price charting tools. Then we realize that it is possible to unveil some of the ‘secrets’ of the market flow chaos, turning it into a disciplined, organized and tradable market.
“If we try now to conclude the outcome and the benefits of “Pitchfork Analysis”, we realize that we are close to an optimal charting instrument that uses, not only the price, but also the time. If we have to remember just one thing in this article, it will be Mr. Michael S. Jenkins’ principle –‘trading is a game of strategy’ and just buying and selling everyday is only a 50/50 bet. If you wait for a timer cycle or a “square out” then the odds can be 80% in your favor…”
ECONOMIC INDICATORS – Weekly – 17/04/15
The weekly close charts on some of our leading economic data: ASX 200 Index, C.P.I, PE Ratios, Dividend Yield, 10 Year Bonds factors that the fundamental analysts use for their stock recommendations. Data can be easily accessed from the Financial Review. Currently the differential between 10 Year Bonds and Dividend Yield is the area on which to focus and so is the PE Ratio now into somewhat overbought territory with current comments by some economists as “high risk” on the bull side.
COPPOCK INDICATORS – Daily – 17/04/15
I have been keeping these charts on a daily basis for some decades through the biggest booms and busts in our stock market from the early 1960’s. Very little attention is paid to the importance of the breadth of the market i.e. rises and falls in industrial and mining sectors. The figures are again available from the FR nightly online but not in the hard copy. The tables were discontinued for approximately three weeks recently. I have since discovered them in the Sydney Morning Herald.
These indicators provided additional information about the “health” of the market with divergent signals over the index. They are currently worth studying and represent important technical information in our current time frame. OB/OS is still just above the zero line currently at +2.0%. Confirmation of a change of trend going below zero. A market now losing some upside momentum – a warning. Coppock Mining Indicator has been, especially in the mining sector during it’s horrendous bear market with only brief counter trend rallies. I learned this lesson of its true value after the Poseidon Nickel Boom bust in 1970.
Coppock Industrial Indicator from December 2014 rising above its 30 day moving average with a higher low and testing the 30 m/a in January 2015. The February high and lower highs with sideways action suggesting a distribution area and breaking the uptrend line in the week ending 17/4/15 and below the flattening 30 m/a. The daily close on ASX 200 rather displaying a rounding top with important support at 5800, which if broken confirmation of a sizeable correction. The sideways Total Market A/D line uninspiring with tendency to be negative.