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Interesting charts.

 

unempl.png

 

I wonder how many of those Job Losses were permanent?

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[Note: also posted in Currency Wars thread]

 

 

update on the Yen: we got the test and rejection of the 62% fanline, confirming the 2011 top (from the 2008 low).

 

Screenshot2013-04-09at20221PM_zpsf517c635.png

 

 

nonetheless, from a longer term perspective, it looks like the Yen is approaching important support levels from which it could stage a powerful counter-trend bounce (flushing out some of the hysteria concerning the BOJ ?)

 

xjymonthly_zps6dd35feb.png

 

 

finally, on a related note, the AUD/JPY chart suggests we may be close to forming an intermediate top which could very well coincide with the aforementioned counter-trend bounce in the Yen, (a simple AB=CD calculation would project to 105 give or take)

 

xjy-xad_zps12821ae3.png

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A DAX breakout could be predictive of Coming Inflation - in Euros

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Happy , I appreciate the way your charts and analysis are bring some alternative perspectives on markets here, as I'm sure others do. Have you considered using Linear Regression? That can allow you to consider the price in context of a wider trend, and potential probabilities after considering a typical bell curve distribution.

 

I've been having a clear out recently and I found some charts I'd printed 4 years ago with fan lines on them. That's not something I use these days. For the types of analysis you use what do you think is valid? What's your rationale?

 

I find a great way to test your analysis is by using the market. I've traded for a number of years. If you don't trade then why not? You can get demo accounts with many brokers where you can test trade strategies/ideas/execution without the possibility of losing.

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A DAX breakout could be predictive of Coming Inflation - in Euros

 

Interesting point. When plotted in USD the DAX still faces significant overhead resistance from the 2000-2001 top. However, should we be rolling over here (in both EUR and USD), that may set up a very nice buying opportunity down the road? To be determined. In any case, it might be worth keeping an eye on the DAX vs DAX in USD relationship.

 

dax-xeu_zps600d1b5f.png

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I find a great way to test your analysis is by using the market. I've traded for a number of years. If you don't trade then why not? You can get demo accounts with many brokers where you can test trade strategies/ideas/execution without the possibility of losing.

Yes, I do trade, although at this point it is a pretty crude affair (1. decide what I'm willing to risk, 2. generate a technical hypothesis (with favourable risk/reward set up - i.e., tight stops vs potential gain), 3. trade accordingly). I'm in the process of "testing" various hypothesis via the market, however there is clearly room to develop and systematise '2.' as well as introduce more sophisticated forms of hedging. But yes, "work in progress".

 

Have you considered using Linear Regression? That can allow you to consider the price in context of a wider trend, and potential probabilities after considering a typical bell curve distribution.

No I haven't. But I do like the idea of introducing some quantitative analysis and working with probabilities. Will look into it!

 

Anyway, got to shoot, but will get back to you regarding the 'validity' and 'rationale' of using fanlines.

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also posted in currency thread

 

 

And a brief update on the Aussie (in USD terms): approaching key resistance level

 

xadcloseup_zps11c706c6.png

 

 

brief update on Aussie: intraday violation of descending trendline, price reversed at 50% fanline and closed below trendline. if the low near 102 goes, then this would suggest price heading to the 62.8% line (currently around 95, but rising)

 

Screenshot2013-04-16at61257AM_zpsee0dd476.png

 

 

. . . meanwhile the AUD/JPY cross has filled the first "gap" and is approaching some support near 98 and change. It will be interesting to see how price behaves here, another "gap" near 90 remains to be filled.

 

aud-jpy_zps2fef59ea.png

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GOLD: 62.8% fanline decisively violated, thereby confirming September 2011 high. There are various potential support zones provided from the stair-step rise out of 2008, for the moment I have simply indicated fibonacci retracement levels as possible support. Many lines one could draw at this point, but I will wait for volatility to die down a bit in order to get a clearer picture. Some of the related indices provide cleaner charts. ... at the very least, the extreme sentiment would suggest a decent bounce.

 

1gold_zps86437d18.png

 

 

 

data from April 11 . . .

 

hulbert_zps7b990c25.gif

 

 

 

HUI: A simple AB = CD calculation would project to 275. We reached 272.93 yesterday, so it's a candidate for an important low (to be determined). Also coincides with parallel resistance/support lines noted.

 

2hui_zpsa2cfd635.png

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Euro: action remains constructive (e.g., March low = higher low). Going forward it will be important for price to take out 137.5 level in order to establish a higher high. Currently at descending resistance/support line.

 

Screenshot2013-04-16at44041PM_zps0f235e3c.png

 

 

Swiss Franc: If this weeks break of the 50% fanline holds, then we should expect price to target the 62.8% fanline ... this could set up the prospect of filling the gap from 2011 further down the line. Solid support at 100 level.

 

 

Screenshot2013-04-16at43649PM_zps1c02f915.png

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Looks like we've seen the first cracks appear on the daily chart:

 

jnjdaily_zps0ffc48b7.png

 

 

. . . another push higher (w/ divergence) would be close to textbook

 

 

JNJ probably has a little more juice left in it, but the divergence is setting up nicely:

 

6jnj_zps79d7cbed.png

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I've been having a clear out recently and I found some charts I'd printed 4 years ago with fan lines on them. That's not something I use these days. For the types of analysis you use what do you think is valid? What's your rationale?

 

Good question.

 

At this stage my analysis is purely "qualitative". I consider fanlines valid to the extent that price action respects them (i.e., fanlines often identify important resistance/support zones, or, congestion zones - much the same as trendlines). Needless to say, fanlines do not always work, however, to the extent that fanlines do identify resistance/support levels, I find them useful.

 

In particular, I find them useful in determining the "technical validity" (for lack of a better word) of a recent low (or high) in the context of an intermediate or long term trend change. For example, if a provisional low is in place, then a test and rejection of the 61.8% fanline can be viewed as bullish insofar as it confirms that low (and vice versa). A nice chart to illustrate this example is the recent price action in the Yen, which tested and rejected the 61.8% fanline and thereby confirmed the Oct.2011 high.

 

Screenshot2013-04-17at51525PM_zps0d425154.png

 

Nonetheless, it is worth adding a note of caution: the analysis as such remains purely qualitative. It remains to be seen to what extent fanlines carry with them predictive capacity, i.e., an outcome that can be quantified. Although I have not done so, it might be useful to try and systematise the use of fanlines and generate some probabilities in order to quantify their "qualitative validity". Perhaps this is best done in conjunction with regression analysis or % above/below moving average etc. ?

 

Also, confirmation by way of fanlines tends to arrive somewhat "late in the game", as such, they might be best viewed as providing a roadmap. To put it very trivially: if XYZ has put in a temporary low and is about to embark on a major uptrend, then it follows that the price will (at some point) have to cross the 61.8% fanline. The fact that price action often respects fanlines seems to provide us with more information than otherwise. Although it might be too late for some, in order to have confidence in the new trend, we would want to see rejection of the 61.8% trendline etc.

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Well spotted. Thanks. That is interesting.

 

Thanks, it was a random find. But yes, looks very interesting.

 

 

Speaking of which, I just came across the following article: Billionaires Selling Consumer Stocks: Red Flag or Profit Taking?

 

What do billionaires Warren Buffet, John Paulson, and George Soros know that you and I don't know? I don't have the answer, but I do know what these billionaires are DOING. They, all three, are selling consumer-oriented stocks. Buffett has been a cheerleader for US stocks all along. But in the latest filing, Buffett has been drastically cutting back on his exposure to consumer stocks. Berkshire sold roughly 19 million shares of Johnson and Johnson. Berkshire has reduced his overall stake in consumer product stocks by 21%, including Kraft and Procter and Gamble. He has also cleared out his entire position in Intel. He has sold 10,000 shares of GM and 597,000 shares of IBM.
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interesting Crossover charts

 

Check them on Gold stocks and SPX maybe?

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interesting Crossover charts

 

Check them on Gold stocks and SPX maybe?

 

Yep, the fibonacci cross-overs look interesting. I haven't used cross-overs that much ... applying it to the SPX, the 34/55 week EMA cross seems a bit too slow to be of any use during the bull market phase (1982-2000), however it has been more useful in the secular bear since 2000:

 

spx_zpsc235a53d.png

 

And a closer look at the crosses:

 

1. 1982 √

Screenshot2013-04-23at62459PM_zps9dcf66fd.png

 

2. 1984 x

Screenshot2013-04-23at62627PM_zpsbaf06226.png

 

3. 1988 x

Screenshot2013-04-23at62736PM_zps2d2b1be0.png

 

4. 1990 x

Screenshot2013-04-23at62835PM_zps330d411d.png

 

5. 2000/2001 √

Screenshot2013-04-23at62928PM_zps41f12124.png

 

6. 2008 √

Screenshot2013-04-23at63022PM_zps4d827659.png

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