Broadening Pattern Dow Jones Industrial Average and S&P 500 are forming Broadening Pattern on weekly timeframes since January 2018. A broadening pattern is an inverse triangle bounded by two diverging trend line – one moving up and one moving down.Edwards and Magee wrote in their seminal book, Technical Analysis of Stock Trends: If the Symmetrical…
Dollar Index The U.S. Dollar Index, DX #F, has been declining since January 2017 when it reached the highest level since 2003 (Chart 1). During 1990s, the index has risen from a low of 78.43, in 1992, to a high of121.90 in 2001. The up trend reversal occurred after a near triple bottom pattern – two other…
A research paper by Ben Jacobsen and Cherry Y. Zhang of Massey University of New Zealand demonstrates that monthly seasonality effect is sample specific. They found that the strategy of ‘Sell in May and Go Away‘ beats the market more that 80% of times over -year horizons. Another aspect of this strategy is that during this time, bonds usually outperform…
The doyen of Technical Analysis, Robert W. Schabacker, in his ground-breaking book, “Technical Analysis and Stock Market Profits“, described symmetrical triangles as such, In its basic form, which we will take up first, it has the appearance of an equilateral triangle lying on its right side, with its base a perpendicular line at the left…
The market made all time highs on Monday June 9th, 2014. Early on Tuesday morning, S&P 500 futures are treading water – below 3 points. They have been underwater since yesterday’s close. Now, they seem to be making a quite turnaround. Overnight, Asian markets rose to three-year highs. Shanghai rose by +1.1%, Hong Kong by +0.9%, Seoul by…
Trans Canada (TRP) Bullish Engulfing Trans Canada Corp (TRP), a Natural Gas Utility made a bullish engulfing pattern on Friday June 6th. On weekly chart TRP has been on an uptrend since March 2009. The trend line is conventionally drawn by connecting the lows, which includes the flash-crash low of first week of May 2010. Since June…
Last week started a volatile period for Nikkei 225. As we noted on May 24th, there are two opposing forces acting on the Japanese economy. One is Abenomics and the other is formed by a combination of fundamental reasons, namely –1) Weak closing of S&P 500 following confusing testimony of Chairman Bernanke; 2) Volatility in…
Here is what I am reading: Meredith Whitney’s Muni Prediction Gets No Boost From Fed (Bloomberg) Stocks breakout on higher volume (MarketWatch) Who’s Lying: The Rally or the Sell Signals? (Minyanville) $DJIA Going For Seven Straight & A Short Video on Cycles (Stock Trader’s Almanac) Our Largest Ever S&P 500 Chart! (Don’t Ignore This Chart) The…
On April 10th S&P500 made a low of 1357.38 and then tested it again on April 23rd by making a low of 1358.79. Later in early May, the index broke this support level. After making a low of 1266.74 on June 4th, the index bounced back and by Tuesday, June 19th, it was trying to…
In recent times, one of the flight-to-safety trade in currency markets has been USD/JPY. When the market uncertainty goes up, JPY goes up against USD. USD made an all time low of 75.57 on October 31, 2011. It again came down to within 50 PIPs of this low in early Feb ’12 before rising up to 84.178…
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