Fibonacci, Fractals & Financial Markets

Here’s another brief video on Fibonacci, Waves and Fractals to aid your learning of markets.

Please be aware that this is NOT the be all and end all, this is only the starting point there is a vast amount more to study and look at if this is of interest, curiosity and importance to you and your trading/investing.

There’s also lots are “Free Goodies” available on the http://www.socionomics.net/index.aspx  site once you sign up.

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Is Investing and Trading Rational?

Check out this video by Robert Prechter (It’s not long)

This concept tells you why people tend to HERD in their decisions especially for Investments and Investing, think about the implications of traditional economic theory and see how the markets are the other way around:

I have so much material on Elliott Wave Theory and Socionomics that it’s hard to know where to start and what to include – at the end of the day if you’re interested you’ll sign up for the freebies and carry out your own research, In the meantime I’ll continue to post those articles that I deem are relevant.

Check out the book “The Mania Chronicles” in the right sidebar – inside that there’s some great charts linking events to market action – It’s not a cheap book but the content is worth it if you have any thoughts that news, economics or events drive the long-term nature of the markets.  As it helps you to see other aspects that are associated with Investing and the markets.

One key one I can remember was my Mother giving me Investment “advice”/recommendations in 1999 right before the Tech bubble burst!  Funny how everyones an “Expert” at the tops??????????!!!!!!!!

Again I make no excuses for promoting Robert Prechter and Elliott Wave/Socionomics – the views and analysis offer thought provoking reactions to the markets – I class this as one of my edges when Investing compared to Joe Retail who’s listening to the news, reading tips and what not.  I want cutting edge research and analysis of which (so far) I have only found interesting from Elliott Wave International.

There’s also lots are “Free Goodies” available on the http://www.socionomics.net/index.aspx  site once you sign up.

Have a great day

The Hovis Trader

Social Events – Part TWO

Bear-Market Stress is Weakening Society

We published our disease/epidemic study in the May
and June 2009 inaugural issues
of The Socionomist. We
concluded that for as far back as history provides data, social mood
appears to have dramatically influenced the health of societies.

As it happened, our study was published near the bottom of a Primary-degree
bear market and the onset of the Swine Flu pandemic. From an Elliott
wave perspective, an even larger-degree trend toward negative social
mood began a decade earlier, in March 2000, when the S&P 500 Index
was some 19% higher than it is today. Elliotticians label this trend
“Supercycle” degree, which is two degrees larger than the
Primary-degree bear market mentioned above.

Society has been expressing this larger trend toward increasingly
negative social mood through a variety of health-related symptoms.
For example, our 2009 study said,

Stress–born of the same fear that drives stock prices lower,
tanks economies and escalates foreclosures–also increases the risk
of disease. … Foreclosure–being forced out of your home–is one
of the most disruptive and stressful financial calamities that a family can suffer.1

Two years later in its October 2011 article, “Foreclosures Are
Killing Us,” The New York Times echoed The Socionomist:

(more…)

Social events – Part One

Hi All,

I’m publishing a series of “Social” events and the link to stock markets over the next few months for you.  Notice how certain events good and bad occur during the up and down phases of the stock market.

It is clear to see the effects on greater society that negative phases of the stock market have on peoples lives and vice versa.

Therefore the stockmarket can be USED as a barometer of human social mood and can be used to forecast/predict social moods, trends, fashion, laws etc.

This is something different from me of which I hope you like and see the links, causing you to think a little deeper into society and global issues.

All the best

The Hovis Trader

The Coming Collapse of a Modern Prohibition

Download the Complete Issue (748 KB)

History shows that mood governs society’s tolerance

for recreational drugs. A rising social mood produces

prohibition of substances such as alcohol and marijuana;

a falling mood produces tolerance and relaxed regulation.

In the case of alcohol, the path from prohibition to

decriminalization became littered with corruption and

violence as the government waged a failed war on traffickers.

Eventually, as mood continued to sour, the government

finally capitulated to public cries for decriminalization

as a means to end the corruption and bloodshed.

We predict a similar fate for the prohibition of marijuana,

if not the entire War on Drugs. The March 1995 Elliott

Wave Theoristfirst forecasted the Drug War’s repeal

at the end of the bear market, and in 2003, EWT stated

that during the decline, “The drug war will turn more

violent. Eventually, possession and sale of recreational

drugs will be decriminalized.”

THE CASE OF MARIJUANA

(more…)

Conquered the Crash yet?

As a minimum the free report is essential, although the book is just out of this world – Long predicting likely events.  The “NEWS” when it is reported, suddenly makes you perfectly aware of how far behind the times they are.

You can get a copy of the book by clicking here Conquer the Crash: You Can Survive and Prosper in a Deflationary Depression
, which details much more including how to position yourself should things get really bad – remember this book was written back in 2002 warning us of likely events – most of which have happened but it’s not finished according to EWI.

In my opinion this is a must have book – hence why it’s in my bookstore on the Recommended Resources page.

The Hovis Trader

 

Position Yourself for the Rest of “Conquer the Crash” The earlier you prepare, the better May 23, 2012

By Elliott Wave International

To this day, I wonder why Robert Prechter’s book Conquer the Crash has not been more widely recognized. It described in advance much of what happened in the 2008 financial crisis.

Published in 2002, the book provided detailed descriptions of then-future economic scenarios. They were detailed vs. general. Prechter was specific in a way that would prove right or wrong; there was no gray.

This is from the book:

There are five major conditions in place at many banks that pose a danger: (1) low liquidity levels, (2) dangerous exposure to leveraged derivatives, (3) the optimistic safety ratings of banks’ debt investments, (4) the inflated values of the property that borrowers have put up as collateral on loans and (5) the substantial size of the mortgages that their clients hold compared both to those property values and to the clients’ potential inability to pay under adverse circumstances. All of these conditions compound the risk to the banking system of deflation and depression.

Conquer the Crash, second edition, (p. 179)

That’s just one excerpt about one topic in a 456-page text. Perhaps you see why I believe the book deserves more credit. Yet even that one paragraph from the book turned out to be a virtual mirror of what came to pass. And much of what he predicted is unfolding today: the JPMorgan trading fiasco, massive withdrawals at Greek banks, downgrades of Italian and Spanish banks and much more. Those are just a few headlines.

The broader point is that Conquer the Crash prepared its readers. Around the time the book’s second edition published in 2009, the Chicago Sun-Times remarked

And the credit implosion is still not over. Please take a look at the chart:

In the Conquer the Crash quote in the first part of this article, you’ll notice the last three words are “deflation and depression.”

The world has yet to completely pass through these economic valleys.


It’s not too late to prepare yourself for what’s aheadElliott Wave International is offering a special free report with 8 lessons from Conquer the Crashto help you prepare for your financial future. In this 42-page report, you’ll get valuable lessons on what to do with your pension plan, what to do if you run a business, how to handle calling in loans and paying off debt, a list of imperative do’s and don’ts, plus much more.Get Your FREE 8-Lesson Conquer the Crash Report Now >>

This article was syndicated by Elliott Wave International and was originally published under the headline Position Yourself for the Rest of “Conquer the Crash”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

How a Simple Line Can Improve Your Trading Success

Howdy,

Here’s the latest offering from EWI.  Now most of you know that I know the EWP (Elliott Wave Principle) but I don’t use it to trade from/with – I also don’t use or trade with/from Trendlines, BUT, I have read this report a long time ago and it does a great job of explaining how to trade using Trendlines.  As with most EWI relevant reports you have to sign up for FREE to Club EWI and then you can access all available free material.

If I don’t use Trendlines why publish this blog post?  I hear you ask – Well it’s simply something that you need to know and understand, whether you use them or not – In this business it pays to try to learn and understand as much as you can so you can discount what is not going to suit/work for you.

For those that are Fibonacci orientated this months Elliott Wave Theorist (EWT) dissects the market in TIME using Fib work – a great read and essential reading for committed traders and investors.

Click on the links below to access EWI’s site and the reports.

If anyone knows of any other publication outfits that provides FREE good quality material please feel free to let me know and I’ll have a look – although I am very very strict on what material/companies I’m prepared to promote on here

Enjoy

The HOVIS Trader

How a Simple Line Can Improve Your Trading Success Elliott Wave International’s Jeffrey Kennedy explains many ways to use this basic tool May 21, 2012

By Elliott Wave International

The following trading lesson has been adapted from Jeffrey Kennedy’s eBook, Trading the Line — 5 Ways You Can Use Trendlines to Improve Your Trading Decisions. You can download the 14-page eBook here.

“How to draw a trendline” is one of the first things people learn when they study technical analysis. Typically, they quickly move on to more advanced topics and too often discard this simplest of all technical tools.

Yet you’d be amazed at the value a simple line can offer when you analyze a market. As Jeffrey Kennedy, editor of the new Elliott Wave Junctures service, puts it:

“A trendline represents the psychology of the market, specifically, the psychology between the bulls and the bears. If the trendline slopes upward, the bulls are in control. If the trendline slopes downward, the bears are in control. Moreover, the actual angle or slope of a trendline can determine whether or not the market is extremely optimistic or extremely pessimistic.”

In other words, a trendline can help you identify the market’s trend. Consider this example in the price chart of Google.

That one trendline — drawn between the lows in 2004 and the lows in 2005 — provided support for a number of retracements over the next two years.

That’s pretty basic. But there are many more ways to draw trendlines. When a market is in a correction, you can draw a trendline and then draw a parallel line: in turn, these two parallel lines can create a channel that often “contains” the corrective price action. When price breaks out of this channel, there’s a good chance the correction is over and the main trend has resumed. Here’s an example in a chart of Soybeans. Notice how the upper trendline provided support for the subsequent move.


For more free trading lessons on trendlines, download Jeffrey Kennedy’s free 14-page eBook, Trading the Line — 5 Ways You Can Use Trendlines to Improve Your Trading Decisions. It explains the power of simple trendlines, how to draw them, and how to determine when the trend has actually changed.

Download your free eBook >>

This article was syndicated by Elliott Wave International and was originally published under the headline How a Simple Line Can Improve Your Trading Success. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

Happy Birthday

To the NYSE.

220 years ago today the New York Stock Exchange was officially born.  Prior to that there had been “unofficial” trading of sorts but it was on the 17th May 1792 that the Buttonwood agreement came into effect.

This led onto the formation of the Dow Jones index, S&P500, Nasdaq etc as the years progressed.

In that 220 years fortunes have been made and lost by many

click the link above for a detailed look at the NYSE

The Manic-Depressive Stock Market: What to Make of It

Some people question why I refer to Elliott Wave Internationals topics, features and articles so much.  For 1, I am an affiliate of theirs so I’m happy to promote their wares but secondly and more importantly I just love their research and style.

I am an absolute stickler for clarity, logical arguments and relevant content for any research I buy or read – I can’t be bothered reading something if it has no impact or relevance to me at all – I’ve more important things to do with my time than wade through loads of reports, blogs or websites with no or little relevance.  That is why I only subscribe to 2 (yes TWO) financial newsletters – both of them from Elliott Wave International – WHY? – because the content, charts, graphs and reasoning has logic & relevance to the bigger economic picture going on throughout the world.

These two newsletters are NOT, I repeat NOT tip services or recommendation letters – they are research papers who’s content is not seen in the main stream media or press.  The content and facts are what’s critically important to me – NOT someones opinion on trades/investments.

On this site I am simply unwilling to promote anyone or anything that I do not believe in 100% – in this business there are 1000’s of useless opinions and comments that are simply unhelpful to and for traders – I know I’ve spent years picking through a lot of them!

Elliott Wave International (for me) produce well written, logical and practical articles.  Their reports are just common sense thinking applied to markets and events that I personally find of use to me in understanding the big picture of global events.

Read the article below – until you think of it as EWI have written it this is something that is likely to nag you, you’ll be watching the markets and thinking where’s the logic?  Logic says if this happens then that should happen – why hasn’t it?

Welcome to the markets – logic is out of the window I’m afraid!

Now although I promote Elliott Wave Internationals reports and research I do not trade using Elliott Waves, I have tried and found for me it’s of little use, you might find it works for you.

The report below is a snippet, piecing together lots of careful, well explained and relevant content allows you to build greater pictures of how the markets work.  It’s FREE to sign up to Elliott Wave International and access their FREE content.

Enjoy the post

The Hovis Trader

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The Manic-Depressive Stock Market: What to Make of It The psychology of the market may be teetering on the edge May 2, 2012

By Elliott Wave International

The stock market: one week it acts like Dr. Jekyll, the next week it’s Mr. Hyde.

That shift can even occur in the course of a single session.

These dramatic fluctuations appear to be impulsive; and we know that impulse does not flow from cold reason. Even so, the Efficient Market Hypothesis would have us believe that investors are constantly applying reason and logic to reach some objective market pricing, via the latest news or measure of stock market valuation.

The February 2010 Elliott Wave Theorist provides insight:

The Efficient Market Hypothesis (EMH) and its variants in academic financial modeling…rely at least implicitly but usually quite explicitly upon the bedrock ideas of exogenous cause and rational reaction. Stunningly, as far as I can determine, no evidence supports these premises…

EMH argues that as new information enters the marketplace, investors revalue stocks accordingly. If this were true, then the stock market averages would look something like the illustration shown [below].

We know that the market does not unfold in the way illustrated above. But we do know that the market has unfolded like this:

So in 2000, did a sudden burst of logic lead investors to realize that the NASDAQ was over-valued?

No. Technology stocks had absurd price/earnings ratios long before the NASDAQ top.

The NASDAQ’s abrupt switch from Hyde to Jekyll stemmed from investors’ collective unconscious. Consider the gazelle that runs in panic because others are: it does not pause to rationally survey the landscape. It explodes in a burst of speed that reaches 90 km/hr within seconds.

Decades ago, multimillionaire stock market operator Bernard Baruch said

…the stock market is people. It is people trying to read the future. And it is this intensely human quality that makes the stock market so dramatic an arena, in which men and women pit their conflicting judgments, their hopes and fears, strengths and weaknesses, greeds and ideals.

This psychology of the marketplace unfolds in waves. That is what we study.


Want to learn what REALLY drives the markets?The FREE 50-page Independent Investor eBook will challenge conventional notions about investing and explain market behaviors that most people consider “inexplicable.”You’ll learn how extreme market psychology affects the markets, with some eye-opening charts that provide shocking evidence of the real forces at play in the markets.We promise to show you a whole new way of thinking about investing. Download the FREE 50-Page Independent Investor eBook Now >>

This article was syndicated by Elliott Wave International and was originally published under the headline The Manic-Depressive Stock Market: What to Make of It. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.