Tag Archives: long-term

15 Apr

Stellar week for the DAX

Good morning,

China’s GDP roughly came in line with expectations – IF YOU BELIEVE the numbers are in fact true.

Dow chart 150

Dip buyers are keeping DAX higher

It has been a stellar week for the DAX, adding plus 400 points. The dips have been very moderate, about 40 points. I suspect I will focus on buying DAX dips. Its Friday, so I am not expecting anyone to change the trend majorly on a big up-week.

The BIG PICTURE looks very interesting. I have a FIBONACCI TIME CALL for a high in stock indices. The chart below would suggest that I will be right or wrong very quickly. Its simply a matter of taking your pick, chose your side.

Are we continuing up or are we headed back down again? I have made my longer term call, but in between I will carry on trading during the day, AND KEEP THE TWO CAMPS (INTRA-DAY and LONG-TERM CALL) SEPERATE.

Dow chart 149

Dax Daily – its make or break time

The last chart is the FTSE. It is the kind of chart that makes me wonder if my BIG CALL is right. This looks like a great BREAKOUT TRADE to me. It has a pretty decent target on it too. We are talking another 450 points higher in the next few months. It is for this reason that I am not breaking out in a sweat over my big call. There will be plenty of time to jump on board, if we don’t see markets back off in the next week.

FTSE 100 BREAKOUT???

FTSE 100 BREAKOUT???

HAVE A GREAT WEEKEND

Tom Hougaard
Tom Hougaard

07 Apr

Be careful who you listen to

I am deeply distrustful of what I read in the newspapers or see on TV.  There is always another side to the story, and I often don’t get to hear about that side.

I spent 9 years of my career talking to financial journalists. They would call me during or after the trading day to ask why such and such an event had taken place. Why did Vodafone rally? Why did IBM fall?

If I told them that Vodafone rallied because it had broken above its high from 6-months ago, then I would not be quoted in the paper the next day. If I told them that the rumours in the City was that Vodafone was poised to announce quarterly results which was above expectations, then I would find my name in the paper the day after.

If I told them IBM was selling off on rumours of disappointing sales in Asia, I would get a quote in their column. If I told them it was because IBM was making new monthly lows, and short-term traders were jumping on the band-wagon, I would not be quoted.

So I have a fairly good idea of idea of what is rubbish and what isn’t, when it comes to news reports. In general I stay well clear from mainstream media. I NEVER listen to news during the trading day. I am aware of news reports coming out, and I make sure I take the necessary precautions.

My friend and legendary trader Larry Pesavento sent me some images of the Dow Jones Index with various newspaper and magazine front page quotes next to them.

From the 1970’s the business week front cover story of December 1972 proclaims that the bull market will continue in 1973. Business Week timed the top with that headline. Dow fell relentlessly for the next two years.

1970s chart

 

The 1980’s weren’t short of a few ill-timed headlines, such as Fortune’s bullish call days before the 1987 crash.

1980s chart

1990s chart

2000s chart

My own favorite is from 2000, where I read a headline discussing the NASDAQ, stating that “in this new paradigm, profits don’t matter”. Within a month NASDAQ had started the bear market which was to shave off 83% of its valuation over the next 3 years.

Be careful who you listen to. Even so-called experts, world recognized authorities, may have an agenda, which they don’t tell you about. I firmly believe that talk is cheap, and that everything you need to know is in the price. Price is king. Learn to master price and the rest will fall into place.

You might want to read this article

http://www.marketwatch.com/story/how-much-do-profits-matter-to-stock-market-returns-2016-04-01

Tom.

Tom Hougaard

Dow Jones analysis

09 Jan

Dow Jones analysis

Tom Hougaard is looking at the longer-term outlook for 2013. The Dow Jones index is the oldest index in the world and has data spanning back all the way to 1876. Tom takes a look at years ending with the number 3 (as a more light hearted approach to technical analysis) as well as the potential for 2013. What would a 20% decline or rally mean for the Dow. Finally he looks at the unfolding Head and Shoulder pattern and combines it with fibonacci extensions to derive targets for a break on either side.

Dow Jones analysis video

Disclaimer: Trading in securities such as stocks, options, indices, currencies and futures involve risk and should not be undertaken without due diligence and serious independent study. Viewers of this Dow Jones analysis video may carry out their own trading based on what they learn from this article/video, but all risks of potential financial losses are the readers responsibility. We will be in no way liable for financial losses resulting from trading decisions based on articles posted within this website. Past performance is no guarantee of future results. Reproduction in whole or in part is not permitted without prior written consent. All rights reserved.

02 Jan

Trade of the Year

Larry Pesavento will post his last ever Trade of the Year in the next newsletter. You can sign up for our free newsletter, and we will alert you when the trade is online.

Larry writes:
Next week I’m going to bring out my 15th and final trade of the year. These trades are long-term trades and have been right 11 of those 15 years. The losing years were all small losses but the 11 years were monster gains. This will be my last one because time does not permit me to answer the many questions that I get regarding this trade each year.

In this week’s newsletter Larry focuses his time on Dollar Yen and the prospect for more upside. He also discusses the Bradley model and looks at the commodity market. However, the most important chart in this week’s newsletter focuses on the alarming discrepancy between the VIX index and the US Treasury Bonds.

The world did not end on December 21st, which was a welcome surprise for nearly everyone. I read the most amazing statistic I have read in many years over the weekend. For the first time in the history of the United States, there have been more deaths from suicide than from auto accidents. I certainly hope part of this is due to the better construction of automobile safety items.

1 – The Bradley Model is pointing down and we will be watching the next crest on February 4th.

2 – December 28th was a Blue Moon, which is two full moons in the same month. This happens every 18 months to two years. Remember that the lunar cycle is 29 1/2 days, and is elliptical, so the dates will vary by month.

3 – The NASDAQ has only been able to make a 50% retracement, largely due to the weakness of Apple. But some of the other stocks are beginning to look weak also, such as Microsoft.

4 – The VIX Index has finally started to move higher. Enclosed in this letter you will see a four-year history of the VIX versus the yield on the 10 year bond and you will see that this is at historic differences. It basically means that the price of stocks versus the price of the bonds is at historic levels.

5 – The Dow Jones Utility index was only able to rally to the 38% and 50% of previous highs, which defines a bear market.

6 – The New York Stock Exchange Index has held up relatively well this past week but is still showing indications of a potential double top as shown on the charts in this letter.

7 – Silver and Gold are trying to hold major support. It is very important that Silver hold above $29 per ounce and Gold hold above $1,630 per ounce. If stocks collapse, it could bring margin selling that would affect commodities also. Many commodities – such as copper, corn, wheat, coffee, cocoa, sugar, and soy beans – are all at critical support.

8 – Crude Oil held the major resistance at the 92 level. It is forming a Bearish Gartley Sell Pattern here and is very symmetrical, which means that it has a higher probability of turning down from this level and breaking to the upside.

9 – The US Dollar Index has held support at the 79 level.

This equates to resistance in the Euro vs. the US Dollar at the 133 level. The British Pound versus the US Dollar has made a triple top, but the real surprise has been the US Dollar versus the Japanese Yen, as it has finally broken above the 86 level and has now made a 1.27 expansion at 86.50. This market has long-term bullish implications, but from this level it is hard to be a buyer. We would love to see an AB=CD pattern form over the next several weeks in order to get back into the long side of this market. We were bullish from 75 to 86 and are now standing aside waiting for another buying opportunity.

The most important chart of this letter, in my opinion, is the chart of the US Treasury Bonds. As you can see, there is potential for a head and shoulders pattern to form on January 4th. This is a perfectly symmetrical head and shoulders pattern and deserves our attention. Watch for prices to be between 149 and 151 on January 4th.
Next week I’m going to bring out my 15th and final trade of the year. These trades are long-term trades and have been right 11 of those 15 years. The losing years were all small losses but the 11 years were monster gains. This will be my last one because time does not permit me to answer the many questions that I get regarding this trade each year.
I want to wish everyone a happy and prosperous New Year, and may health and happiness flow through all of our lives. And remember, the man who dies with the most toys does not win – he just doesn’t understand the game.

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