Gann Series – PRE-Intro

Keep an eye out for my new Gann Series – Introduction coming towards the end of this month – It will be ad-hoc posting over the course of time as it’s something extra I plan to do.

It will be an “eye-opener” to make you think, explore and research for yourself – I’m NOT a Gann Expert – I know enough to know that in his course’s and books he actually revealed very little about his true method (and I don’t know his true method!) I am sure a few thousand people around the globe do know his precise methods from their research but researching those people would also take you decades of time! – Some may be well-known, I don’t need to know as I’m not that interested in subscribing to this or that or other peoples books.

I’m NOT knocking Gann – his methods he details in his courses and books are still more informative, interesting AND relevant than most of the trading/Investing books published since his time – which says something about today’s authors/traders etc!

For ME, all I want is to know the significant trend direction for the next X years so that I can have that into my mind when trading – I only trade LONG too – I think I’ve found that with my personal cycle analysis of the 17 yr cycle – this can then be broken down in smaller cycles BUT where my cycle analysis FAILS, is it does NOT tell me whether a cycle turn will be UP or DOWN, so you have to trade warily of that fact.

For me I would love to know and understand Gann’s true methods, but I doubt I’d change the way I trade, it would just enhance my confidence in positions if you knew when they should end etc.

My style of writing is to the point and very direct – I’ve read too many books [98% of which have been binned] that are filled with rubbish info with only 5-10 pages of essential info – just give me a book with the 5-10 pages of good stuff then!

If you make 20% a year from Investing/Trading you’ll do very well over the years due to the compound nature of money – I’ve shown you over the past few months that you can make decent returns by trading/Investing simply using market FACTS – See my pages on FTSE250/Nasdaq100 & Gold using a very simple method.

Unfortunately people don’t make money trading – they use methods such as moving averages, Elliott Wave Analysis and Indicators and think that they’ll work just because a book selling them info is published “so it must work”!!!!!!

In Gann’s courses he details LOTS of stats on the market, lots of stats on bull and bear markets etc and he also gives you basics to trade – I use one of his methods very successfully, as it catches trends and bottoms nicely – BUT if I put all his dates/time cycles on my charts I’d have loads of potential turn dates overlapping one another and no definite date to watch – you can’t use this to risk money on (well I can’t and won’t anyway) – Over the course of the series we’ll be extracting bits from his course to analyse and test in current markets to show you – the Law of averages (this is NOT a NATURAL LAW) says that some will work and some won’t – we’ll see when we look at that blog post in the months ahead.

As you’ll figure out as we go through this series – most of Gann’s work was generalisations – he hid his true work as you’ll see.

Watch out for the Intro post coming to you this month.

Until then happy trading and wishing you every success in all parts of your life.

 

 

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You were Warned well inadvance

I posted this in February 2014, I’d read it again and then look at what’s been happening since September:

https://thehovistrader.wordpress.com/2014/02/20/now-is-the-time-to-beware/

A little time off

Hi all,

I’ve not disappeared, just taking some time away from the blog and markets.

I’m still fully trading, but rather than being at my computer, I’m doing a few projects around the home and away from the screens.

quick look @ S&P500, tells me that its currently stalling at new highs, It’s been a sideways market since March 2014, overall the trend is stalling but within an uptrend = bias to the upside.

Could it turn into a down trend?  Of course it could, potentially but certainly not confirmed is leg 1 and 2 of an Elliott Wave, but that needs much more content and detail to be proven correct and it is at odds with the overall direction of the market, but it is a possibility.

In my opinion you cannot make classifications that the trend has changed – that would simply be a pure guess – W.D. Gann said “Do not guess, trade facts”.  The overriding facts are uptrend since 2009, no bearish confirmation of late, pullbacks in the overall trend in line with previous in both TIME and PRICE so the outlook must be to the upside and Bullish until the market proves us wrong.

I have no doubt that in the next few months the market (S&P500/FTSE100 etc) will have a fairly decent sell off, I just don’t know exactly when and neither does anybody else.  Following that sell-off will be a very decent buying opportunity, certainly for the short-term and maybe for the long term.

Only time will tell exactly what happens, the trick is being part of it or out of it, not on the wrong side of it – that is what helps you to make money from the markets.

S&P500 Index – Update

OK, recent price action has forced me to update the commentary on the S&P500.

A potential TOP could be in, it is not certain (we need more price action), price taking out the Minor swing low is a potential game changer.  BUT, it ALL depends upon how price action forms and reacts  during the next few weeks.

Look at the chart below (I’ve used this in the last update), there is an equal chance that all is happening is a simple or complex correction from the highs OR that we are within the early stages of a bear market.  I know some traders are saying that’s it the tops in, but they were also saying that on MOST highs in the market!  Like I’ve said in the past, you throw enough predictions and one will hit, it does not mean you’re smart!

1737.92 is now the key and critical level, for me until key lows are taken out such as 1737.92 the odds still favour the upside, but as I’ve mentioned this could be the start of a major downtrend – it is just too early to know for sure.

When we trade, we are guessing, we now need to watch the bounces that will occur, if they are strong then I’d expect price to head higher to sideways, if the bounces are weak in terms of number of bars and price % then the downside might be here – keep an eye on the bounces as they will be critical.

Look at the “bounce” from the 5th Feb 2014 = STRONG

1

You could refine the quality of the analysis in the chart about by placing retracement levels, but I find it simpler to just watch price action and see what it actually does, because that is the most important indicator of all – PRICE action.

Remember I am looking for a +20% correction in the markets this year, I had a Time Cycle date of 29th March 2014 – the HIGH so far came in only 5 days later – the Time Cycle is still VALID.

If we are still within a Deflationary Depression (as I think we are) then 6 year Bull markets just do not happen, they NEVER have in 200+ years of stock market history.  Obviously if we are NOT in a DD then the market is perfectly fine with a 6 year bull market.

 

 

Weekly Time & Price analysis – W/C 7th April 2014

Hi All,

This week we come back to the mighty S&P500, I’ll provide a update to what to look for going forward in this post too.  But first let’s look at last weeks Call for the EURUSD.

We were looking for a LOW, in fact the time zone runs to the 18th April 2014 for a LOW point – so we are still within that zone in both Time and Price.

Right the S&P500, lets review the Price and Time zones and then look at the market itself from a technical point of view

Swing File Analysis

Weekly EURUSD - Time & Price

Projecting the END of the UPSWING on the WEEKLY EURUSD – in the zone now

Daily EURUSD - Time & Price

DAILY Analysis = looking for the LOW of this swing DOWN, again in the ZONE!

Fibonacci Analysis

Weekly EURUSD - Time & Price FIB

Daily EURUSD - Time & Price FIB

DAILY Analysis = Fib counts/analysis says Tuesday 22nd April has the highest number of hits – wait and see.

What to look for going forward – update:

S&P500

WTLFGF1

Look at the chart above, to be honest the critical information is shown on the chart, my words here are just to explain the detail in plain English so that my thoughts are clear.

The PINK horizontal line = a current SUPPORT shelf, If and how long it hold I have no idea (neither does anybody else)

ALL the moving averages are in Bullish mode, pointing up and separated nicely = UPTREND

The PINK moving average gives the impression that price found support at that level – it did, but the support occurred at the PRICE level NOT the moving average – think, on the days of support the moving average was one bar back, PRICE drags the moving averages along, the moving averages do NOT drag price – this is a classic ILLUSION to which people will say “Look, price found support at the MA level” It’s not true, it just happens that the MA met with price at those levels – why did the MA FAIL to support price in June 2013, August 2013, October 2013, Dec 2013?  BECAUSE price found support and the MA was not priced near enough to create the Illusion AND even if it were true that moving averages provide support NO-ONE can tell you in advance WHY or WHEN it will next happen, so there value is pretty limited in my book – BUT they [Moving Averages] are good at helping you see and identify the trend direction, although you could just get a line draw it on the chart and determine if it;s heading sideways, down or up and that would be just as good.

In Fact I will do a series on Trend Identification in the coming weeks

The Thick BLACK horizontal line is CRITICAL SUPPORT – If that level is broken – POTENTIALLY – the trend could have changed from UP to DOWN, BUT, that is not for certain – IF that happens it will be the biggest correction for a number of months – W.D. Gann said that when the size and time of a correction exceeds those of the past corrections in the trend watch out for a trend reversal – that’s exactly what we will do – KEEP WATCH.

You can see from careful study of the DAILY chart that Gann’s quote so far has FAILED – so far the largest corrections in Time and Price have FAILED to be reversal points!  Another “Market FACT” that in fact is a MYTH!  At some point Gann’s quote will come true, but I wonder after how many FAILURE POINTS!  (I reckon about 80% of what you learn about the markets is a load of crap – Elliott Wave and Gann included) But I also say that PARTS of Gann and Elliott Wave are genius and workable.

We now need to look at this S&P500 market in a different context – a higher time-frame chart to see the bigger picture – detail on the chart should be self-explanatory

WTLFGF2

Once those KEY support levels start to be taken out all you can do is watch to see where the market will find support – no-one knows where it will find support, people will try to guess such as 61.8% fib level of X-X, or 50% (not even a FIB level!) of X-X – but they never tell you EXACTLY which levels will provide the resistance or which high and low to work off, that’s because they DON’T KNOW, it;s all ifs and buts in the markets – at least I’m honest about it!

For me the crucial support levels are the ones I’m watching anything up to them is just market noise and a standard potential correction in progress.

Just remember that NO-ONE, me included knows exactly where and when this market will top or bottom out – If you throw enough guesses at the thing eventually you’ll get it right! BEWARE of predictions.

Oh and another point, people keep bleating on about QE1 turning the market in 2009 – QE1 was an accounting trick – no real money entered the markets! So how that managed to pump the market higher I’ll never know, if markets can rise on fresh air all we need is a giant fan aimed at the markets with a hint of QE rumour and they should propel ever more higher.

What to Look for going forward the next part will be posted in a month or so time – until that uptrend changes to do guess what the trend direction is?  Up that’s right

Hope it helps.

 

Update on Time Cycles

I’m writing this post early Thursday 3rd April 2014, I’m writing it assuming that the March 29th 2014 market cycle I’ve previously talked about has FAILED/NOT WORKED – If over the next 2 days the markets commence a multi-month sell-off then I’ll have to revise this post with the data

We will still have to watch Thursdays and Fridays market action but if the market continues UP then we have to take it on the chin and assume that the cycle has had no effect on the market. (I’m looking at the S&P500 Index).

If you’re like me these Time Cycles are not essential to how you trade, they are there in a what if scenario, something to be aware of and act on if it becomes obvious a turning point is upon you etc.

For me that’s pretty much it now for the rest of the year on cycles, there’s a couple of minor ones during the summer and another expectation on something different from summer – October time.  I’ll not mention them here, I think I have mentioned them in other blog posts but they are minor and I’m not basing too much on it.  Students know about the October cycle.

Did I trade the March 29th Cycle?  Nope.

I’m truly hoping that if you’ve been following my cycle analysis you’ve picked up on something – it CANNOT be relied on to tell you every twist and turn of the market – that I’m afraid is impossible – anyone thinking “Well Elliott Wave can tell me that” – no it can’t, if it could they’d be no need for alternative counts, EW is good, but it is not precise and never will be.  As I’ve mentioned many times before it;s probably the best thing out there for labelling waves correctly in hindsight, but even as we speak the EW experts have recently had to alter their wave counts to suit market conditions!

Let me be real clear on this, NOTHING and I mean NOTHING works precisely in the trading world.

Looking forward:

Well first let’s look backwards – the 2000, 2002, 2007 & 2009 market cycles came in bang on time.  The 2013 cycle sort of worked but so far the chart (S&P500) says it didn’t, that MIGHT change when we have much more price data available on the charts.  Referring to the May 2013 Time Cycle a 7.5% drop was not enough for my liking to confirm the cycle – it MUST make a print on a MONTHLY chart that is noticable and May 2013 was not – If you view the same date on the FTSE100 Index then you can see the effect it’s having on the FTSE100 Index ( sideways trading range for nearly 12 months!)

1

As you know the above Time Cycle was due between May 20th-28th 2013 and it came bang in to the day, I was hoping this effect occurred on the S&P500 chart rather than the FTSE100 but I trade both so no problems for me, but those in the USA that just focus on the S&P500 it is a problem as that market has continued to RISE.

Moving on, the next set of dates are in mid 2015 and then end of 2016.  the most important of those being the 2016 date.

If I threw enough time cycles on the chart one would hit, to me that’s not accurate, I want virtual exactness, the 2016 date should be a LOW and it should be pretty accurate, however, the 2017 date could also impede the 2016 date a little – either way 2016-17 should be a LOW point in the market.

This cycle has been pretty much spot on for over 200 years

1

I’ve coloured the 2016 date RED – for me this signifies something and makes the date stand out.

2

There is no way to know how or If a Time cycle will act or comply with a possible date until it happens, this means you have to have a suitable way to trade whatever happens.

My outlook for the year 2014 still remains up into the general March area and then either sideways or down into October and then up around October time for the year end.

My outlook from now until 2016 is still sideways (preferred outlook) or outright bearish.

BUT whatever actually happens I’ll be trading as per my rules of trading, not based on hope or assumptions.

 

 

Today is a very Important day

It is the 5 year static anniversary from the March 6th 2009 LOW.

I’m willing to bet that most of you have not researched history and historic prices – 5 year+ Bull market rallies are the MAXIMUM extremes price reaches during Deflationary Depressions – there has NEVER, EVER been a 6 year bull market rally inside a Deflationary Depression.

Today marks the 5th Anniversary from the major low and key turning point in the market (S&P500) – the plain and simple message is if we are still within the Deflationary Depression that started in 2000, then you need to be wary for 2014 – I’m not saying that today is the top of the market (my personal preference is the 29th March 2014, but that’s not guaranteed to happen) but it could start falling apart today or soon.

Here’s a reminder and a chart to assist:

  • 6 year Bull markets never happen inside a Deflationary Depression
  • My thinking is that we are still inside a Deflationary Depression that started in March 2000
  • EVERY major move that has so far occurred within this Deflationary Depression has happened in either the months of March or October – we’re now into March 2014!
  • I don’t see the end of this Deflationary Depression until January 2017 – I’ve said this for years now and still stick by it.
  • The 5th year static anniversary is upon us right now (see the chart)
  • The Time cycle that hit in January 2014 – is ALWAYS present in the month or months preceding a major correction/fall – the markets current moves have NOT been sufficient enough to justify this type of correction, therefore I’d expect heavier falls at some point (see previous posts for evidence)

5 & 7 Yr static cycles

A correction of at least 25-50% should be in order, but again it’s best just to let it ride out and see what actually does happen.

What to look for going forward – part 2

OK – I’ll keep this short and brief as I have a huge amount of things to sort through, once you start something on these blogs you have to see it through.

You should recognise the chart below from the beginning of the month, the only thing that has changed is price action has been added – HOW did I know the bottom was in? Students will instantly see it’s a THT Cyclist set-up! That MADE money, anyway,

that is NOW topping out – if you are still long you really need to tighten your stops on the trade.

What is going to happen next? The patterns on the chart are still applicable and valid and it is STILL not clear at this stage.

I’m quite open for price to make new highs, so the pattern to watch there is for a pull back towards the swing low marked a

from which it finds support and then bounces to new recent highs.  ALWAYS, ALWAYS remember the MARCH 2014 Time Cycles – they are relevant, the market has worked these cycles out in the past, there is no reason why they won’t do it again!

Don’t get hung up on retracement levels – they don’t really matter!

Now, what if a double top has just been printed? Then this is it and you need to concentrate on the short side – I don’t think I’ve talked out loud about my expectation to the public for the short side exactly – my preference is for a fast decline – not like 2008, more like the drops of 2011 – fast, to support and over.  It will probably have been and gone by the time I get to document it properly.

At this precise time (could be invalidated by price action next week) we have a LOWER high swing point formed, we need 2 to confirm a potential change in trend – that is a few weeks off from forming

The swing low at a now has the potential to provide a false break (price exceeds the low @ point a and then bounces back upwards) It depends on what is unfolding in the market – The main point is if the swing low at point a is broken it then provides us with another reference point and we’ll be able to assess at that point.

So currently it’s not 100% clear what will happen – still the same as last time – there is a perfectly viable Elliott Wave ABC correction type event still viable (If it’s forming the B swing with this recent rally up)

My advice is sit tight and watch

Feb 2014 Blog

Do not ignore those Time Cycles – the most recent publication on them shows in January 2014 one of them arrived, that cycle is present at all major turning points of relevance – something fairly major will happen in the months that follow it.

Remember that George Soros has double up his short position on the S&P500 to 10% of his fund!  These people don’t do that out of hope.

All the best

THT

Now is the Time to beware

Permission is granted to share this post as long as you acknowledge me as the source.

I’m not into scare mongering, when a major buying opportunity appears I will advise accordingly, but first, along with the other Time Cycle posts I’ve made you need to be aware of this one.  If you were climbing stairs towards a fire I’m sure you’d want people who could see the smoke to at least let you know the possible/potential dangers ahead – It’s then up to you as to what you decide to do.

My assumption is that since 2000 we’ve been in a BEARISH Deflationary Depression – the charts back this up and confirm it as well as other key Time Cycles confirming these assumptions.  The Bearish cycle is not over, so I’m afraid until that happens caution has to be adhered to and I’m afraid that comes in the form of highlighting potential major tops that could trigger a hefty fall – during the BULLISH phase of the cycles these falls are small compared to the falls during the bearish phase – hence the warnings.

These assumptions are not some whim, they’re based on researching over 200 years of market history and pulling out the common factors – who else do you know that’s done that?  I bet most people don’t look back further than a few years and I’m probably being generous with that assumption.

I’m on record as stating that if you still have money invested in the 2030’s, you will have to be prepared for very rough waters in the mid to late 2030’s – very similar to price action you’ve witnessed during the past 14 years (since 2000)

Why the Warning?

This Time cycle has been present at major TOPS and turning points in the markets – It arrived 18th January 2014 – take a peek at the daily charts to see its effect – just like the May 2013 Time Cycle virtually to the day!  this particular Time Cycle is not known for it’s accuracy to the day so the January 2014 plunge might be a coincidence or it might have been caused by this cycle – we’ll never know for certain, anyway this cycle is present in the months surrounding a major high – this is an official warning, I can only guess at the fall/correction that will follow, but a decent correction should occur.

This cycle is not spot on accurate, we need to watch the next few months before calling this cycle over – this cycle is ALWAYS present at major turning points and it’s hit a cycle date in January 2014, of which the recent fall has NOT been sufficient enough for this cycle.

This cycle will be NEW to you ALL, but students – there is another cycle due this year that represents a very good buying opportunity, my expectation is that this cycle and the March cycle will drag down prices into that buying opportunity cycle – of course I don’t know for sure that will happen, it’s my best guess, the FACTS are

  • This cycle is always present at key turning points in the market
  • The chart below shows it’s hit 100% of the time over 5 occurrences covering 20 years
  • If I go back further in time I can find the same hit rate!

This is from my recommended Gann course provider – part of it is my own work, but the concept came from the course provider.

Take 2 mins to think about this:  Here’s a Time cycle that is about 6-8 years in length and it signals key turning points in the markets with an 100% hit rate, albeit it could be off by a few months!  This time cycle is best used as a pre-cursor of a major correction, not an accurate timing Time Cycle as with other Time Cycles, also,

If you review the chart below, you will notice 1 thing for definite, this Time Cycle PREDICTS major stock market falls in advance, those stock market falls also FORCE governments to declare an official RECESSION, therefore this Time Cycle also predicts economic recessions – EVERYTHING is LINKED – I don’t care what you’ve been told by economists and governments, I’m showing you it is all linked – in free random markets that can’t happen, but it does, therefore if you are in BUSINESS you can forecast recessions, the smart people will act to protect themselves during those times.

We also have a massive TRIPLE TOP chart formation formed on the FTSE100 Monthly chart – REGARDLESS of the Bullish bias over the past few years, nice economic data and the like – that chart pattern shouts WARNING, just on the pattern alone, throw in the Time Cycles and you have a fairly potent warning signal to be very cautious/wary over the months ahead.

Now for the positive – there WILL be one or two, maybe three absolutely fantastic BUYING opportunities in the months and years to come – I will advise accordingly as and when they crop up so make sure you’re subscribed for free via the email subscription to this blog. – I can see 2 potential chances on that chart below, but we need much more price action (years) for this to become valid – each one of those buying opportunities at present has 50% profit appreciation gains written on it for a buy and hold investment which is not too bad for buying at the right time and doing nothing. – obviously this is dependent upon future price action and until that unfolds I might just be getting exciting for no reason at all.

I’m sure you can see the value in knowing when these cycles are due:

Time cycle

The FTSE100 Index from 1984

Here is a long-term chart of the FTSE100 Index since inception:

FTSE100 Mthly

Tell me how you would of INVESTED had you known the following:

  • A bull market was due from 1982 to 2000
  • from 2000 a 18 year bear market was due

The answer is obvious, yet millions got caught out – because they do not know or understand market cycles.

I keep banging on and on about market cycles – that chart highlights how important they are – one market cycle = 581% growth, the other market cycle (not yet fully completed) shows so far a 4% loss after 3/4 of the cycle has elapsed!  WHAT?  No wonder people can’t work out what it going on – they’re not looking back FAR enough to compare like for like.

Just think about someone who is due to retire soon – 14 years of virtual waste in terms of investment growth – this is why it is vital in understanding market cycles and your Investment life

Markets expand and then contract – this is simply what is happening here, albeit on a horrendous scale – stop and think what the next expansion and contraction will be like!  and yes there will be another 1987 style plunge, which in the Dow is likely to be thousands of points not 500 or so.

Economists and fundamentalists will tell you this and that, my pension isn’t paid in this and that’s, its paid from the growth it makes over the years, that is why it is important to understand the markets and where you are in them, because they’ve been wrong for 14 years and counting!

I’ve also made a prediction for Gold too, at some point I’d expect it to reach that level.