ESSENTIAL/MUST read

It’s not often that I do this – it’s a Saturday afternoon and I’ve interrupted my day to post this.

You have to read the March 2014 issue of Elliott Wave Theorist – it does mean BUYING it, you don’t obtain this type of information for free I’m afraid.  You will need to subscribe to the Elliott Wave Theorist to obtain March 2014 issue

You are highly unlikely EVER to read the content of the report in the mainstream media and it also helps to confirm/back-up what I’ve been saying about the Fed and USA Government.  If you’re an American then the implications are massive not only for your Investments but your lives, If you’re not an American citizen then it’s bound to have an impact on your Investments/Life to some degree – better to be prepared, than “suddenly out of the blue” find out

In fact this report/months EWT applies to EVERYBODY in the world, it is that important, all I can do is alert you (you can lead a horse to water, but you can’t force it to drink) you’ve been alerted!

Here’s a link:

http://www.elliottwave.com/r.asp?rcn=statgrphc&url=/wave/022114aff&tcn=ag022114&acn=hvt1211

Why I like Elliott Wave Internationals Analysis

Not the wave counts, but their outstanding monthly analysis, for years subscribers to their material have been aware of the content of this post, obviously not the current up to date data, but every month we’ve been warned of the true state of the worlds markets based on FACTS.

EWI can, do and have got a little carried away on their predicted wave counts, which is understandable, but if you distance yourself from those and see the facts, figures and analysis for what it truly is – an Indication of the true context of the markets then you can be aware of what may or may not be lurking around the corner.

For me?  Gold – topped in 2011 = not surprised – whilst “experts” where advising mass buying of the shiny stuff

Commodities struggling = not surprised

Understanding what the market did following QE issuance = not surprised

QE does not work during a deflationary depression – something I agree on with EWI – what has happened and why have markets stood up?  The time cycle (In my opinion), If I’m right on the Time Cycle the lows been and gone on 6th March 2009, the market should hold up regardless of economic theories, EW counts and so on.  I’m on record as saying that the 1929 event has already happened – it happened in 2000 with the Nasdaq – just get the charts and compare – been and gone in opinion.

Now knowing all this does not make it easier to trade with exactness!  But if you have more knowledge of the indicators that really matter you can rest, sleep and trade a lot easier than those that might be concerned about things but can’t quite place their finger on a logical explanation which helps to level the mind.

Enjoy the read:

Commodities Falling Despite QE: What Does That Mean?

Robert Prechter: “Charts tell the truth. Let’s look at some charts.”

By Elliott Wave International

During QE3, the latest round of the Fed’s quantitative easing, the stock market rose. We all know that.

But did you also know that commodities fell?

That’s right: QE3 had zero effect on commodities — or maybe
even a negative effect. In fact, an unbiased observer of the
trend might conclude that the Fed drove commodity prices down.

That, of course, would be heresy to investors who believe
that the Fed’s actions have been inflating all financial
markets.

What should you make of the fact that commodities have failed to respond to the massive, historic, unprecedented central-bank stimulus? We see it as a red flag.

What’s more, you may be surprised to know that not one of the Fed’s stimulus programs — QE1, QE2 and QE3 — pushed up commodity prices.

As Robert Prechter, the president of Elliott Wave International,
wrote in his November 2013 Elliott Wave Theorist,
“Charts tell the truth. Let’s look at some charts.” These
four charts and analysis that he published in May, July, and
November 2013 tell the story:

(Robert Prechter, July 2013 Elliott Wave Theorist)

The CRB index of commodities has been losing ground for
more than two years, as shown in Figure 3. Notice the four
short arrows on the chart. Based on their positions, you
might think they would mark the timing of accurate sell
signals
generated by a secret indicator. But there’s
no secret indicator. These happen to be the times at which
the Fed launched its inflationary QE programs!

Investors almost universally take news at face value rather than paradoxically as they should. So they believed the Fed’s QE actions would be bullish for commodities. But — ironically yet naturally — every launch of a new QE program provided an opportunity to sell commodities near a high.

The first time the Fed bought a slew of new assets (QE0) was in 2008, and commodities went straight down during the entire buying spree.

QE1 (see below) was just a swapping of assets, not new buying, so it wasn’t inflationary; ironically, commodities rose during this time.

Commodities rose a little bit after the inflationary QE2 started but ultimately went lower. Since QE3 and QE4 — the two most aggressive programs of inflating the Fed has ever initiated — commodity prices have been trending lower as well.

Are commodities just late and poised to soar? I don’t think so. Figure 4 shows a chart of the CRB index published in The Elliott Wave Theorist back in May 2011.

It shows a three-step, countertrend rally … inside of a parallel trend channel … at a [Fibonacci] 62% retracement … thus giving three reasons to expect a peak at that time. [Indeed] the CRB index has trended moderately but persistently lower since then.

Prechter gave another update in his November 2013 Elliott Wave Theorist:

Commodities are in a bear market. Figure 1 proves that the Fed’s feverish quantitative easing (QE) — i.e. record fiat-money inflating — is not driving overall prices of goods higher.

The bear market in commodities began two months before the Fed’s massive asset-buying program began. Despite the Fed’s inflating at a 33% rate annually for five straight years, commodities are still slipping lower.

Prechter’s final point from the November 2013 Elliott Wave Theorist summarizes it best:

None of the believers in omnipotent monetary authorities and their pledges to inflate saw any of those changes coming. Meanwhile, we couldn’t see how it could turn out any other way.

The largest inverted debt pyramid in the history of the world is the reason that QE won’t work. The future is already fully mortgaged.


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An alternative to Fibonacci levels

Hi,

I love the concept of having a set of lines on my charts that display potential support/resistance levels – BUT do they really work?

Well, lets have a quick test:

1st I’m going to take a look at the famous 61.8% level – price HAS to find support or resistance on this level and it HAS to hit it, I am not accepting turns where price nearly hits – price has to hit the level and reverse.

2nd I’ll test this over 2 years worth of data by hand – I could do more years but I don’t want to.

3rd I’ll create a new support level of 42% – This level has nothing to do with natural growth, Fibonacci etc It is an independent number plucked out of the air to see what we can deem from this test.

4th I will also test the 50% level too just for comparison.

Here’s the results:

61.8% & 50% Test

50% & 62,8% levels

42% Test

42% levels

Well as we can see from the results it is plain to see that Fibonacci levels aren’t all they’re cracked up to be!

For a start it is impossible to know exactly the level to start from – often these levels did not get a direct hit by starting a retracement from a high or low, often the swings after a high/low matched!

We can see that we could pick virtually any number between 10-90 and it’s likely to have a fairly decent success rate.

Saying all this though and if you check out my Fib/Gann levels page you’ll see that I do like to have lines on my charts to aid potential turning points – this I have decided is a partial flaw and it’s something that I’ll be looking to sort out and tweak in the years ahead.

I urge you to pick a random number and test it for yourself.

Now it’s no secret that I’m a great fan of W.D. Gann.  I’ve studied Gann a lot and it is my conclusion that there is no way on earth that Gann would NOT have known about the Fibonacci number sequence – Gann talks extensively about NATURAL LAW, for centuries Fibonacci and it’s application has been known, Gann would of studied that, yet he makes very little reference to it in his works and prefers to use his own support/resistance levels namely dividing swings into 8ths – he then applied this basis for his gann angles to.

You also cannot get away from the fact that many of today’s Fibonacci experts also use the 50% level – Gann used this extensively too! – the 50% level is not a Fib level!

Like anything you have to make up your mind on what suits you.

Hope it helps

THT

A Free 40-Page Download: A very insightful Investment Report for 2013

Dear investor,

Consider yourself warned.

Please find links to a very rare FREE publication from my friends at Elliott Wave International, providing their thoughts and outlook for the economy and major worldwide markets.

Please note that this is Elliott Wave International personal views and nothing might not come of their concerns, views or predictions.  I personally subscribe to Elliott Wave Internationals publications that you can obtain this rare insight to – why?  Because their level of analysis is superior to others and it fits my analytical nature perfectly, In short I love their analysis because the content is never seen in the mainstream media and its relevant, I DO NOT trade or invest or analyse my potential trades using Elliott Waves – for me it does not suit my style so I personally ignore any reference to wave counts and the like, but the financial analysis is second to none and very useful to me to form an idea of what’s going on in the world [financially].

It’s also interesting to see that Elliot Wave International have time cycles that expire in 2016, this fits in well with my long-term outlook and time cycles – my time cycles are completely different to those in the report but they both bottom in 2016!

The global market outlook is far less rosy than the emperors-minus-their-clothes would have you believe.

  1. Global stocks are near multi-decade, technical price junctures.
  2. Regional economies recently said to be “recovering” are now slipping back into recession.
  3. Despite a multi-year rally in stocks, the AP reported on Dec. 27 that mainstream investors are selling shares at breakneck pace. “It’s the first time ordinary folks have sold during a sustained bull market since relevant records were first kept during World War II.”

Politicians and central bankers worldwide reassure investors that the credit crisis of 2007-2009 will turn out to be nothing more than a footnote in market history — despite the compelling proof that it never truly ended.

Meanwhile, U.S. Congress made a final-hour fiscal cliff deal to delay addressing its gargantuan budget woes, Europe remains in turmoil, and Asia-Pacific regions and emerging markets are charting surprising courses of their own.

Just as the timeless fable warns, sometimes it takes a single voice in a crowd to tell everyone the emperor wears no clothes. EWI’s new report, The State of the Global Markets — 2013 Edition, is that voice.

Packed with timely charts and analysis, this 40-page tour de force tears down the popular investment myths of today and replaces them with hardcore reality.

  • It tells you what’s really going on in the global marketplace.
  • It reveals market pitfalls no one else sees coming.
  • It uncovers once-in-a-lifetime investment opportunities.

To get ahead of the markets in 2013, you must think independently. This 40-page report gives you the tools and the direction you need to gain a competitive edge.

Download The State of the Global Markets — 2013 Edition now (for FREE), and enjoy dozens of independent global market insights that will prepare you to survive and prosper in 2013 and beyond.

Follow this link to download your free 40-page report, The State of the Global Markets — 2013 Edition, now.

(Don’t miss out. It’s only available until April 16.)

If you are trying to make head or tail of whats going on in the world economy then this 40 page report goes a heck of a long way to describing what’s happening and WHY!

With my best wishes for a prosperous 2013,

The Hovis Trader

P.S. This report is available to you for free for a limited time, exclusively from EWI. Please download it now while its valuable year-in-preview advice can help your portfolio in the New Year. Download the 40-page report now.

About the Publisher, Elliott Wave International Founded in 1979 by Robert R. Prechter Jr., Elliott Wave International (EWI) is the world’s largest market forecasting firm. Its staff of full-time analysts provides 24-hour-a-day market analysis to institutional and private investors around the world.

Fibonacci – Introduction

Hi All,

This is probably my most fav subject, Fibonacci is everywhere, this is an Intro into the subject, there’s more books on the subject that I recommend on my Recommended Resources bookshop.

Nobody knows the complete truth about how exactly Fibonacci fits into the markets but very often it’s clearly visible to see the growth pattern emerge and complete and it’s why I incorporate it into my trading strategy.

Gann never really made reference to it but he did say that the markets grow according to natural law, but the puzzle is why he failed to use it because I’m fairly certain he would have known about it seen as it was centuries old and he looked at everything mathematical in his quest to understand the markets.

I am in the midst of deeply researching Fibonacci and the factors it has within the markets, this research is many months away from being complete but once I’ve completed it I will release it as generic posts and videos.

To get you started on the road, the great Pythagoras, centuries ago had the 5 starred pentagram as his symbol of the “brotherhood” this symbol is littered with Fibonacci ratios which is presumably why he used it!  Many people see that particular pentagram symbol as evil, I don’t believe in that sort of thing and only see the mathematical relationships it holds per line.

Enjoy

The Hovis Trader (courtesy of Elliott Wave International)

Fibonacci in Nature: The Golden Ratio and the Golden Spiral The more you learn about Fibonacci, the more amazed you will be at its importance October 10, 2012

By Elliott Wave International

If you’ve studied the financial markets, even for a short time, you’ve probably heard the term “Fibonacci numbers.” The ratios and relationships derived from this mathematical sequence are applied to the markets to help determine targets and retracement levels.

Did you know that Fibonacci numbers are found in nature as well? In fact, we can see examples of the Fibonacci sequence all around us, from the ebb and flow of ocean tides to the shape of a seashell. Even our human bodies are examples of Fibonacci. Read more about the fascinating phenomenon of Fibonacci in nature.


Let’s start with a refresher on Fibonacci numbers. If we start at 0 and then go to the next whole integer number, which is 1, and add 0 to 1, that gives us the second 1. If we then take that number 1 and add it again to the previous number, which is of course 1, we have 1 plus 1 equals 2. If we add 2 to its previous number of 1, then 1 plus 2 gives us 3, and so on. 2 plus 3 gives us 5, and we can do this all the way to infinity. This series of numbers, and the way we arrive at these numbers, is called the Fibonacci sequence. We refer to a series of numbers derived this way as Fibonacci numbers.

We can go back to the beginning and divide one number by its adjacent number – so 1�1 is 1.0, 1�2 is .5, 2�3 is .667, and so on. If we keep doing that all the way to infinity, that ratio approaches the number .618. This is called the Golden Ratio, represented by the Greek letter phi (pronounced “fie”). It is an irrational number, which means that it cannot be represented by a fraction of whole integers. The inverse of .618 is 1.618. So, in other words, if we carry the series forward and take the inverse of each of these numbers, that ratio also approaches 1.618. The Golden Ratio, .618, is the only number that will also be equal to its inverse when added to 1. So, in other words, 1 plus .618 is 1.618, and the inverse of .618 is also 1.618.

This is a diagram of the Golden Spiral. The Golden Spiral is a type of logarithmic spiral that is made up of a number of Fibonacci relationships, or more specifically, a number of Golden Ratios. For example, if we take a specific arc and divide it by its diameter, that will also give us the Golden Ratio 1.618. We can take, for example, arc WY and divide it by its diameter of WY. That produces the multiple 1.618. Certain arcs are also related by the ratio of 1.618. If we take the arc XY and divide that by arc WX, we get 1.618. If we take radius 1 (r1), compare it with the next radius of an arc that’s at a 90° angle with r1, which is r2, and divide r2 by r1, we also get 1.618.

Now here are some pictures of this Golden Spiral in various aspects of nature. For example, on the left is a whirlpool that displays the Golden Spiral and, therefore, these Fibonacci mathematical properties. We also see the Golden Spiral in the formation of hurricanes (center) and in the chambered nautilus shell (right), which also happens to be a common background that Elliott Wave International uses for a number of its presentations and graphics.

We can also see the Golden Ratio in the DNA molecule. Research has shown that if you look at the height of the DNA molecule relative to its length, it is in the proportion of .618:1. If we look at the components of the DNA molecule, there is a major groove in the left section and a minor groove in the right section. The major groove is equal to .618 of the entire length of the DNA molecule, and the minor groove is equal to .382 of the entire length.

This graphic of the human body also shows how the Golden Ratio exists in certain relationships of the human anatomy.


Learn How You Can Use Fibonacci to Improve Your TradingIf you’d like to learn more about Fibonacci and how to apply it to your trading strategy, download the entire 14-page free eBook, How You Can Use Fibonacci to Improve Your Trading.EWI Senior Tutorial Instructor Wayne Gorman explains:

  • The Golden Spiral, the Golden Ratio, and the Golden Section
  • How to use Fibonacci Ratios/Multiples in forecasting
  • How to identify market targets and turning points in the markets you trade
  • And more!

See how easy it is to use Fibonacci in your trading. Download your free eBook today >>

THT’s Market Analysis Part 3

In part 2 we looked at trading with precision using Elliott Wave and we found that sometimes it worked spot on and at other times it failed – forcing us to alter and amend wave counts, take losses and rework our charts – this is of course a very subjective way to analyse and trade the markets, for some it gels for others the concept sounds fantastic but they can’t apply it.

This lesson focuses on my trading set-ups and analysis, including TFT Propulsion, Gann Pullbacks, Pattern, Price, Time and using the DTosc indicator.

Once again a wealth warning – “Nothing works 100% of the time, we will have losses” I hope that after reviewing this post that you can see and understand that there is NOT a one size fits all trading set-up – The markets can only move 3 ways – Up/Down & Sideways and out of those 3 movements the market can only do 2 things being in a Trend or a Correction of which can come in varying sizes.

If your trading set-up only works during Trends then you will endure a string of losses during the corrective, non-trending parts of the market unless you have 2 systems that you can employ.  Then comes the hard part of knowing for certain you’re in a non-trending section!  i.e. Elliott Wave 5 wave impulse should be followed by a non-trending corrective phase of ABC as a minimum, the hard part is identifying the 5th wave and being on guard!

The general concepts and strategies I use are on this site already (apart from THT Trampoline – I’m still debating about whether to reveal it), so forgive me if I brush over key areas – I don’t intend to reprint my trading rules as they’re on this site already and we’ll focus on the recent S&P500 market as previous, although I’ve zoomed into the charts for clarity.

TFT Propulsion

Details on the chart – Ignore the assumptions to Elliott Wave as previous post and as you can see would have resulted in trading the complete OPPOSITE side of the market to our Elliott Wave assumptions! (see THT Market Analysis Part 2 for EW counts)

(more…)

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.