Aussie Dollar: Larger Correction Complete

The AUD/USD, and Aussie dollar generally, has been one of the weaker currencies in the world since its 2011 top. But, it seems that is about to change, so let’s take a closer look at the action over the past couple of years. First, a five wave rally was completed into the July 2011 top, Aussie Dollar: Larger Correction Complete

S&P 500 at 2000 – How high can it go?

crosshair on the weekly S&P 500 chart

A popular topic lately is the discussion of the bull market in US stocks now that the S&P 500 is at 2000. How much further might it go? We have already covered the process we would like to see before we change from bullish to bearish in a previous post about how to identify a trend change. Personally, as a trader I S&P 500 at 2000 – How high can it go?

Homebuilders ETF Forms a Head & Shoulders

XHB ETF monthly chart how the rally from the 2011 low loses momentum

The homebuilders (XHB) are always an interesting group to examine, because it tends to be an “early cycle” group. It’s a stock group that leads the market most likely because it touches so many different areas of the economy (commodities, interest rates, employment, etc.). As evidence of its leading nature, take a look at a stock Homebuilders ETF Forms a Head & Shoulders

Anti-Signal: Is There Any Juice Below Today’s S&P Bear Break?

Daily chart of the S&P 500 E-Mini futures contract on July 17

Today’s bear bar seems very muscular without considering the context; large size with a failed breakout attempt on the top and a close near the low of the day. Bear reversals tend to succeed in bear trends when they reverse a weak bull leg against the resuming bear trend. This is absolutely not the case Anti-Signal: Is There Any Juice Below Today’s S&P Bear Break?

Stock Market Risk – The New Reality Part 2

Chart: Japan Government Debt in percentage of the GDP

In Part 1 of Stock Market Risk – The New Reality, we covered the difficulty of investing in today’s environment, and the folly of forecasting. Rather than focusing particularly on forecasting, learn and create a process for identifying “stand alone” opportunities the Trader Skillset way. And, with that, enjoy Part 2: Here are two forecasts Stock Market Risk – The New Reality Part 2

Stock Market Risk – The New Reality Part 1

Effective Federal Funds Rate chart 1954 - 2014

Investors are expecting far too much return from their investments, and far too little downside potential, as of today. These expectations rest on two faulty ideas: Expecting the next five years to mirror the past five. Belief in the power of the Federal Reserve, and central banks everywhere, to ensure economic growth. But, the Fed’s Stock Market Risk – The New Reality Part 1

From Dow to Broccoli

The broccoli is a nice example of a fractal image in nature, repeating itself in self-similarity at varying scales

At the end of the 1800s Charles Dow’s market theory had already included some hints about the three phases of market trends. Deliberately I use the word “hint,” because his principles are formulated much too vaguely to build an active trading strategy with. According to Dow, the first phase is a slow up leg governed From Dow to Broccoli

Gold Weakness Should be Bought

Gold has been in a sideways pattern since its mid-2013 low. First, let’s cover the near term action on the daily chart (below). A secondary bottom formed in late December 2013, from which a rally ensued and topped in late March 2014 in C or 1. From there, we see a corrective decline with a Gold Weakness Should be Bought

Learn to Trade – Your System

market info - knowledge - wisdom

To learn to trade successfully, you need create your own systematic approach and trading plan from which you are able to make your own decisions. Successful trading requires a unique understanding of markets, core risk-taking ability, temperament, perception and even a compatible lifestyle. Trading is certainly not a product in a box that you can buy with Learn to Trade – Your System

Ideal Reversal and Continuation Signals

Traffic light tree in the dark - Tons of signals which one to choose

It takes more than a single candlestick, or pattern, to enter a trade, even if it meets an optimum set of criteria. Candlestick patterns are just one signal that we utilize to alert us when the short term price action lines up with the long term context. As Jeffrey Kennedy from Elliott Wave International puts Ideal Reversal and Continuation Signals

Three Times the Speed

Many traders have a basic understanding of momentum. But, we think most traders would benefit from three tweaks to the traditional thoughts on the topic. In fact, in our proprietary trading system, momentum helps to identify and confirm the context; and, as such, it is the link between historical prices and the short term signals. Traditional Momentum Three Times the Speed