Saturday, 28 January 2012

Trading Forecast Financial Markets

Trading Forecast Financial Markets
At this point. I still have TZA after picking it up at 22.20.
There are a lot of things that I look at when I make a decision on buying TZA or TNA, but the number 1 thing I use when trading these 2 instruments is my Swing Trading Forecast Model, that's #1. I then look at the patterns that are in play (Elliott Wave). I don't use indicators much only because everybody is using indicators, everybody is a technical analyst these days so you have to "Trade The Trader, Know Your Competition". Right now When I look at the patterns in play they could go either way but I am on the bearish side, we have had a nice run since the beginning of October. I then look at how optimistic or pessimistic the crowd is, I don't use hard data on this, I just go by past experience and have trained myself to go against the crowd. And let me tell you, the crowd is mixed up, I don't get the feeling from the crowd that "Happy Days Are Here Again" but we are in a long term bear market so this could be the bear markets version of "Happy Days Are Here Again"  . These are the 3 big decision factors, but the #1 thing I look at is the Swing Trading Forecast Model. To expand on the model, the model indicated the Russell 2000 should top out on the 23rd 24th and the DOW to top out on the 26th. Last week was a topping process.
The Swing Trading Forecast Model indicates that the financial markets should break this up trend and go down, the exact date is January 31. The next trend change for the Financial Markets is on or around March 15th, 2012, change trend again on or around March 30th, 2012.
Then April 9th, then April 19th, May 1st, May 8th, July 7th...
Sept. 26 shows that a significant change would be in the making.......... HMMMM. I wonder what that's going to be all about. You have to remember these are the dates right now, things change and evolve a bit over time.
Carrying on here. I also listen to what the the people a generation older than me are saying. I have to say that  I am getting mixed messages with the people that I respect, so therefore I have to go with my #1 decision maker, the Swing Trading Forecast Model. That's my system and everybody needs a system.
A couple of things that I am looking at right now is the fact that the DOW is close to going above the highs in May, 2011. The more riskier assets are lagging. So money is going to where it gets it's best deal and that is dividends, listen to Ralph Acampora and Jim Puplava at Financial Sense.
Yes, I am also looking at all the money printing, but remember , the market priced that in before the announcement of low interest rates till 2014. King world news interviewed Gerald Celente, Jim Rickards, Richard Russell, Jim Sinclair ect. and look for gold to go higher.The gold chart looks different than the HUI. The HUI is at some serious resistance right now, gold on the other hand  just made a nice correction from it's highs in September. From the bullish point, gold made a nice ABC correction getting ready to go higher. On the bearish side, gold could be in the B wave setting itself up for it's fate to go lower on the C wave. Even more bearish yet, gold could be in the process of wave 2 setting itself up for the 3rd  impulse wave down (which is fast and a wonder to watch). When you zoom in on the gold chart, you can see the 1st impulse wave down in September so once wave 2 is complete the 3rd  impulse wave down should move in tandem with the rest of the financial markets whenever that is going to be.
I saw this chart a long time ago and think about it every now and then, I saw it again the other day,  German Paper Marks per U.S Dollar 1922 to 1923 . You'll notice that once the momentum starts with hyperinflation, 6 months later fiat money is garbage. The chart is the same with any country that has debased it's currency. Is that going to happen? possibly, I'm not sure. If it does, it won't be a single a country, it will be global. All I know is, what's going on in the world right now never ends well. You have a wash out and start over again. That's usually what happens.
I primarily look at the charts and when I take everything into consideration I wouldn't be one bit surprised if everything bounces around for a while. The only thing you can count on is, the further out into the future you go, the harder it is to nail down the probabilities.
One person I like to listen to when I get the chance is James Dines. He doesn't look at the short term but has a knack for nailing down the long trend because of his deep thinking.  You should listen to him at Financial Sense Newshour. He made an interesting comment about how all the uprisings are popping up all over the world at the same time. He calls it murmurations. He talked about a video of Starlings making fractal patterns in flight. This is how mass psychology works, we as humans are no different than the Starlings. This is theory of course but all you have to do is look at nature and see familiarities in everything we do as a crowd,everything is fractal and the financial market's are no different. The fractal patterns you see in the market is the basis of the Elliott Wave Principal. When you look at charts and read books from the early days of the stock market, it was no different then as it is now.
Here is some content from about the Starlings in flight-------------Last year, Italian theoretical physicist Giorgio Parisi took on the challenge of explaining the murmuration. What he found, as ably explained by my old Wired colleague Brandon Keim, is that the math equations that best describe starling movement are borrowed "from the literature of 'criticality,' of crystal formation and avalanches -- systems poised on the brink, capable of near-instantaneous transformation." They call it "scale-free correlation," and it means that no matter how big the flock, "If any one bird turned and changed speed, so would all the others."
Anyway I could go on all day about the financial markets, that's enough for now.
Keep in mind that conservation of cash is the most important thing. Trading leveraged index derivatives is high risk, don't trade with money you can't afford to lose.

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