Tag Archives: Video Analysis

03 May

Looking ahead

Apologies for the lack of update yesterday. It was a holiday here in Spain, and I decided to take advantage of a break from the screen and soak up some sunshine.

We have an interesting week ahead of us, mainly because you have holidays in many places. Denmark for example will be off Thursday and Friday. Japan is off Wednesday and Thursday, and Germany and France and Swiss have a bank holiday Thursday.

3 maj 2016 2

RED FLAG EVENTS THIS WEEK

 

The all-important event – well take your pick – but I will be looking ahead to the Non-Farm Payroll out of the US on Friday. I will discuss this later in the week. For now – let’s look ahead to today:

Sometimes you get an indication of what is going to happen in Europe by looking at Asia. Today it is quite a mixed bag:

3 maj 2016

The DAX charts below show the DAX without volume and then with volume. Why are there two charts? I wanted to demonstrate to you that volume can be a great additional tool to your analysis, BUT it doesn’t have to be included if you can interpret the price action instead.

Chart number one, below, shows the DAX on a 30min chart for the last 6 days. It does take a wise man to see the DAX is trending lower, and you should be selling rallies, as long as we trade below 10,150.

3rd May 2016 3

DAX is trending lower, and has failed to hold on to 10,400

The second chart looks at the volume pattern for the last 6 days. There is something in particular that I want you to be aware of, which happened during the timeframe I am zooming in on.

3rd May 2016 4

DAX with volume figures – notice the volume increases on the sell-offs, and remain flat on the rallies.

If you zoom in on the middle part of the chart (see below), you will see a favourite pattern of mine. I call it the Trap Door. Notice how the DAX makes a great recovery, and price goes above the morning high. Notice also how volume doesn’t confirm this, because it is running at a lower high. This in itself is only cause for concern – not an all-out sell signal, but then notice the market selling off BELOW that last price spike bar. This is a Trap Door sell, and it means I will remain bearish as long as DAX is trading below 10,300.

dax fake volume

DAX Fake Move = Trap Door

3rd May 2016 5

Dow lost and regained 17800 very quickly

The next chart is the Dow – above. I betted heavily on the Dow falling last week and I won big. Now I have to contend with the fact that the Dow has regained what it lost, and it did it the day after. So it changes the playing field today. So far the DAX is relatively flat, but I am watching for signs of strength or weakness in the early going. It is the beginning of a new month, and the way the Dow traded yesterday will have me alert to abandoning my bearish stance. So far I will still hold on to my bearish view. One rally will not have me change my mind.

Have a nice day.

Tom Hougaard
Tom Hougaard

25 Apr

Dow DAX and Yen

Monday 25 April 2016

I will start with the Dollar Yen. After the surprise attack by the central bank to weaken the yen last week, I thought it would be good to look at the chart. Naturally I am long dollar yen, after the chart pattern I posted last week (http://tomhougaard.dk/dollar-yen-alert-too-late-but-for-next-time/), but the chart doesn’t look at all so rosy. So there is conflict.

  1. I have a 61% fib resistance at the top (negative)
  2. I have a surge higher (positive)
  3. I have no obvious sell signals but overall the trend looks negative (negative)
  4. The market has made it back into the trading range. Anyone who has been short from this range will see profits evaporate now. The central bank has flexed its muscles (positive).
  5. The retracements have been more or less harmonious, but this can be interpreted both as positive and negative. The moves since last week has been orderly after the impulse up, and it has paid off to buy dips (positive), but the really big picture shows exactly the same pattern of big rallies before big declines in a big down-trend, so I have to accept that the bears are not dead (negative).

So what do you do? You take your bet. I will put most emphasis on the most recent developments, and I am therefore a buyer of Dollar Yen around this level of 111.10.

dollar yen 25 april 2016

Dollar Yen 240 min chart

The Dow is interesting. I have a SELL signal using a mechanical method on the daily chart. This coincides with my time cycle chart too. Nevertheless I am not rushing out to sell short the Dow in big quantities. I have to be patient because I haven’t seen any damaging weakness yet. Maybe it will come this week, but what is more interesting for me is to discuss what I will have to see to be PROVEN WRONG.

I will need to see the Dow close above the highs of last week, preferably at the end of the week (or any weekly close above last week’s highs). Until I see that I will remain negative, but I will naturally be flexible in my trading during the week.

dow 25 april 2016
Dow Jones index Daily Chart

 

You can’t have Dow and not discuss the DAX. The DAX index still looks good. The first chart is the hourly chart, and it shows how well DAX is holding 10350. On the second chart you see the big picture. The big picture is bullish.

How do I trade this? I need to accept that the Dax looks better than the Dow, and until I see weakness in either index, I will have to accept that I am bullish from the charts, but I am quite bearish from a time cycle and a fundamental perspective. As always I will trade WHAT I SEE, and NOT WHAT I THINK.

dax 25 april 2016 small time frame

DAX 1 hour chart – notice how it is holding on to gains from the rally. This is positive

dax 25 april 2016

The Daily chart is most certainly also positive, so you have a conflict between the DAX and the Dow.

Tom Hougaard
Tom Hougaard

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

13 Apr

My thoughts to the current market

I was unable to post my thoughts earlier today. I had a 4am start.

I would like to give my thoughts to the current market and the forecast that I have made.

  1. I woke up early this morning to find the market significantly higher in Asia. As a result of it I started buying European indices and shorting Euro Dollar and Sterling Dollar. I am still in some of these trades. (Here is stupid story: I sold short FTSE because I thought it had gotten too expensive. I am losing on that trade, and I deserve to lose. There is no such thing as “cheap” or “expensive”, and I have no idea why I succumbed to this idea this morning. Maybe I was not concentrating.)
  2. I am still position short Dow Jones index where I am currently losing several hundred points. I am in with 10% of my proposed stake size, and I am watching the situation closely.
  3. In the meantime I am trading the markets intra-day.
    Tom Hougaard thoughts to the current market and the forecast. Analysis, Dow index, Forecast

I have seen nothing yet which negates the forecast. On the contrary this is what I have seen many times before. For example at the 2009 low I knew I was looking for a low, and the sentiment got more and more negative. It took the market 3-4 more days than I had expected before it turned. When it did turn, it turned with a vengeance.

I agree it would have been better to forecast a big move up. I will have to be open to possibility that the markets have turned a corner and will continue to move higher. There is only one thing more stupid about being wrong: to continue to argue you are right, when you are clearly wrong.

Tom Hougaard

Tom Hougaard

Trading using harmonic numbers

06 Apr

Trading using harmonic numbers

My friend Larry Pesavento has made a short video about trading using Harmonic numbers. In all my seminars I teach this concept. It is an incredibly powerful tool to have in your trading arsenal. It will give you a very precise place to enter your trades, and it will give you a very clear idea of how much to risk on your trades.

Thank you Larry for making this video.

Enjoy.

Tom Hougaard