The US futures are bouncing a little. I dont know how bad Europe will be today. The indices got hit pretty hard and there was real apathy. The Dax has rallied 8 days from the low, and now is in its second day of decline. I would like to be a BUYER today if the Dax gets down to 6685 or thereabouts. Thats the low from the 31st January. The SP500 has also rallied 8 days and are now in its second day of decline. If we are really seeing a bottom that will hold, then we won't see more downside by tomorrow until we had a trip up to 1380. I think I wrote it in the newsletter, but it is worth repeating here. The month after a big sell off is volatile and rarely retreats all the way back up to the old highs. Rather most rallies fail and most sell-offs are bought.
The Matrix Newsletter has re-launched and focuses solely on the FTSE, the DAX and the SP500 togher with Gold and Cable. It is completely revitalised and focuses in great details on explaining how the Matrix turns are calculated. This month for example there are 5 charts alone for the SP500, with short-term views and longer-term views. The change came about because very few people were trading the stocks in the newsletter. As a result of it the content has changed and the stocks are gone. Now it is solely on direction of the main indices and on educating you on the use of Matrix time cycles. You can subscribe to here. I think it is safe to say the improvement is significant. It looks very stylish and it exceptionally rich in content. There is however a whole lot of bad language, but that kind of makes it fun to read.
I will be out of the office in the morning, so I will post some thoughts around 10am
Good luck today
Tom Hougaard
www.tradertom.com
5th February 2008 - 09:21am..
I sent out my weekly newsletter yesterday. I hold on to the belief that we will see a volatile month with the market attempting to make it to 1425 at some point during the month. I also believe that we wont make much headway in February. This assumption is made on the basis of research of other exceptionally bearish months. Virtually every single one of them saw the market attempt a rally in the subsequent month, which all failed.
If you want to sign up for the newsletter, please do so here. It is free.
I also point out in the newsletter I favour the short side of gold. I think gold will head down to the $850 area before climbing towards $1000.
For today, I really dont think I will trade intra-day until the US opens. The Dax map is good today and it points to a reversal later in the afternoon.
So in conclusion, I would like to see more upside in the indices before I short. Right now I suspect we are in a short-term (1-2 day) correction before more upside resumes.
Kind regards and good luck today
Tom Hougaard
www.tradertom.com
5th February 2008 - 07:30am..
look out for a mixed day - there is little direction pre-market. I will post my bigger views today at 10am. Here is the Dax Map for today. This will act as my guide for morning:
4th February 2008 - 13:45pm...
I am out of my Dax short, taking 40 points - spread. Newsletter coming out later...
Trade in question:
4th February 2008 - 11:49am
good morning,
I am just catching up with the market after the Hard Right Edge Workshop this weekend. I am not trading this morning, but will later on. I will update later today and send out my weekly newsletter.
I got some early feedback, in case you are interested:
"Having the privilege to work alongside and pick the brains of Fund
Managers, Proprietary traders, Market Makers and countless independent
traders I have been exposed to some great minds. I have never got so
much value out of eight hours as my time with Tom Hougaard and Dr. David Paul at their 'Hard right edge' seminar. What I learnt at the seminar
will take my trading to a higher level. Toms strategies are completely
unique and are not covered anywhere and Dr. David Paul is a must see
speaker for both his psychological insights and his unique approach to
trading. Anybody who is interested in trading cannot miss this
opportunity to gain insights from two of the most original and
innovative brains in trading." Simon
I will announce the next date to those who pre-registered last month, and then publish the date here on the site.
I am looking to take an intra-day short in the Dax now. Here is the map for the day:
talk later
Tom H
31st January 2008 - 09:49
Take a look at the overlay of the Dax map to the actual Dax price action today. It has been priceless for me today:
31st January 2008 - 09:49
Good morning,
Let me first give you the Dax Map for today and then discus the market:
What's going on in the world? 14 days ago the Fed chairman told congress that they would not play to the tune of the market. 4 days later they make the most dramatic rate cut in 26 years. 7 days later they cut by another 50 basis points. The big question is what was the testimonial 14 days ago all about? Did they know nothing 14 days ago?
Over the past 2 days the range in the Dax has been 130-150 points. This morning the range so far has been 130 points. I am attempting a short-term trade in the Dax cash at 6745. If we are having a standard range day, then the low will be in this area. Otherwise we could have a double range day and the Dax could see 6600 by the end of the day. I suspect that the normal end-of-month effect has been suspended with all the turmoil and traders trying to get to grips with the rate decisions from the Fed.
Yesterday was 34 days from top to top. The market hit the lows from the 9th January. 1380 in the SP500 cash will be a sticking point going forward. The market is in perfect balance so far, so to change the bearish tune, we need to see a move above 1380.
Despite my attempt to pick a bit of loose change on the side by buying the Dax this morning, I think I need to place my money on the short side and a potential re-visit of the lows from last week - hence the chart from yesterday with the DAX now and in 1987.
After the crash of 1987 it is a common understanding that equity markets immediately began to rally again. That is actually not the case. I have attached a chart of the Dax from the current crash ( or at least big correction) and inserted in black on the chart is the crash pattern from 1987. What I think is interesting is that the Dax didnt really rally in earnest until 5 months later, in March 1988. Yes, we saw a rally immediately off the lows, but the market only bounced for a week or so and then actually made NEW LOWS. It wasnt until the lows were re-tested that the Dax rallied.
I am pointing this out to you because I think many of us trading are thinking that the markets, with the help of the Fed and every other Central Bank in the world, will bounce back to new highs. I am by all means positioned for this scenario, but you know what they say about history. It has an amazing ability to repeat. It will be an interesting time ahead of us.
The Dax needs to back above 7300 to really be stable again. Otherwise I would prefer more of a base being built. That means I will be ready to go short again, once I see technical levels being breached. Right now we are seeing a rally off the lows. This could take the form of a 3-wave move higher, before test lower levels again. At a bare minimum the DAX needs to get above 7000 again before we can start talking about a real rally getting underway.
So far the Dax Map is spot on... expect sideways higher prices from here onwards. If you want to get a daily map like this, click on the link at the top of the page. They are very helpful for intra-day trading.
I didnt write yesterday as I was simply focusing on not getting shaken out of my long positions from the 28th. I have been stopped out overnight. I had a look at some charts from the crash of 1987. I will post them around 9am. Basically we could stuck in a range for month now. In the meantime take a look at the Dax Map this morning, as it suggest a bounce from the open but then more downside.
I will update site around 9 - 9:30 with analysis.
On Tuesday I will announce the next date for the Hard Right Edge Seminar. If you want to be contacted, and have not already done so, please click here to receive notification.
Until 9:30am
28th January 2008 - 07:05
The Dax is being called down 250 points. I dont think it will be that bad. I am buying. I am not doing anything with the FTSE yet. It seems to me strange that the DAX should open down this much and the FTSE open down just 100.
I will update again around 10am.
Tom Hougaard
www.tradertom.com
24th January 2008 - 13-37pm update.
The markets are solid and I expect the strength to continue. On a different note, Soc Gen, the largest French Bank, have reported losses, which overshadows Nick Leesons losses and even Ahmararet Hegde fund's losses. I have a special insider in the bank who sent me this photo of the compliance manager, when he was told about the $7.8 billon loss. Click HERE.
24th January 2008
I am on CNBC at 06:30am.
I will be showing the following charts(Click on the charts to enlarge them)
The two charts below shows a proprietary technique I use for finding highs and lows in the market outside of using time. It is essentially a standard deviation measure. As you can see from the charts below, we are in a territory we have only seen 6 times in the last 20 years. We are exceptionally oversold and we are finally seeing fear in the market!!
The next chart shows the same technique applied to the VIX index. It measure the option activity - the amount of put buying (insurance protection bought by funds). As you again can see from this chart, the fear in the market is finally where you need it to be to see a low being made.
When the stock markets make front page news and pre-occupy the main TV channels, then I know that we are near a low. I remember so clearly being on some mainstream channels on the 10th/11th and 12th March 2003, all asking, when will the market stop going down. The day I was on BBC1 was the low of the bear market for the FTSE ( Interview Tom Hougaard. Interview on BBC yesterday). I have learned that this kind of market action and the ensuing publicity means we are close to a low, if not already there. The fear is rife, as you can see from the VIX chart above.
The only wild card I can find right now is in the chart below. I wonder what the surging YEN means for the market. You can see that this market has not had any major volatility. It is well contained within its history. What happens to the market if the Yen and the carry trade unwinds fast and the Yen plunges to 100 or lower? If you buy here, make sure you use a stop loss.
23rd January 2008 - 10:38
What a day, and yesterday too. While I am posting my analysis, you can entertain yourself by watching this interview recording on the trading floor yesterday by BBC: Interview Tom Hougaard.
UPDATE:
The markets are making new lows. I am watching for the market to snap back here. The Dax is trading at the morning levels from yesterday. I suspect the real test of this level will come once the US opens in an hour. Right now I dont have time to update any further. I have a position and have an execution dispute with my broker. Stay put. I will name and shame if I don't get a satisfactory resolution to my dispute.
Tom Hougaard
22nd January 2008 - 06:38
I am sorry, but I have to post this one. What is he thinking now? Will we have the much-hyped emergency rate cut? The open for the Dow is now worse that that post 9-11. Go figure.....
I ran some deviation excersizes last night on the Dow and the Dax. I will show you the Dax and explain the result. This indicator is a proprietary system I use for measuring the extent of overbought or oversold markets. We are extremely extended, but as one person told me yesterday: can you stay liquid enough for the eventual recovery.?
The Dax has just opened for trading. It was called down 30 points. It opened down 170 points. The Dow is now being called down 650 points. Yesterday was a brilliant day for day trading. I will do the same today.
The updated data for the chart below puts the Dax on par from an "oversold" point of view with the bear market low of March 2003.
All the best today - good luck
Message from Tom Hougaard:
Sincere apologies for anyone looking for my analysis today, and on top of that, the day of all trading days. My website manager had uploaded my site onto a different server and as a result of it, I was unable to post on my site. The problem is fixed and I will update the site by tomorrow 8AM.
I am on CNN at 05:20am, in case you happen to be mad enough to roam around at that time.
Tom
18th January 2008
09:13am update
Good morning,
The market is exceptionally nervous and it is clear that we could easily have another plunge. However, I suspect that most people trading this believe we are closer to a low than a high. Yesterday's loss in the Dow puts us on par with the biggest declines over the last 8 years. I firmly believe we will have a fierce snap-back rally, and I am trying to stay in for this. I managed not to get stopped out yesterday, but it came close.
The declines in the Dow have ranged from 1000 points to 2000 points. This current drop is 1600/2100, depending on where you measure from. I am going to have patience here. I have no doubt that a snap-back rally is overdue, and technically we hit a 1:1 yesterday in the SP500.
I have brought along a chart for the DAX. There are two items I wish to point out to you:
1/ the Futures hit a perfect 1 - 1.27 extension last night.
2/ The most extreme divergence from the MA I use for trend occured yesterday. Back in July 2007 the first red line to the left of the chart measures the distance from the current price to the MA I use. The exact same distance occured yesterday, which leads me to believe that we will see a recovery of some sort over the next few days. It will be volatile but you need a little patience here.
Good luck today, and have a nice weekend
Tom Hougaard
www.tradertom.com
I am doing an interview on Bloomberg TV this morning at 07:30am. I am discussing the charts on FTSE, Dow and Nasdaq. I will update TraderTom after that. FYI, I believe that we saw a temporary capitulation. Today is option expiration.More at around 9am...
SPECIAL UPDATE 17th January 2008 15:42pm
I have bought a position for a longer-term swing in the March SP500 futures. My entry is 1360. My stop will be 1330 for now. I will look to move that up as soon as I feel safe we are moving higher. The entry signal is a perfect harmonic move from the highs last year.
Good luck today
17th January 2008 - 11:48am
Please be aware that Ben Bernanke is speaking today, which will no doubt affect the market. Right now the FTSE and the DAX are showing no sign of any real strength. As a matter of fact they look like they could break to new lows anytime. We have an option expiration tomorrow and Fed Chaiman speaking today, so the jury is still out on the cycle turn......
Tom
17th January 2008 - 06:41am
Good morning,
The Dow's rally last night and subsequent sell-off looks like an ABC correction. I have included two charts this morning, so you can see the smaller picture and the bigger picture.
On the daily chart you can see that 12800 is resistance. We are attempting a consolidating, so the Dow may have a chance of getting back to 12800. However on the hourly chart it looks like we will need more time to get there. The rally last night could simply be an ABC formation and I want to see what happens at 12700.
Daily chart - click to enlargeHourly chart - click to enlarge
I will watch Europe for the next couple of hours and I will post some charts around 10am today.
My gold target that I highlighted in the newsletter seem to have nailed the high spot on. We have declined some $30 since then. I wish the same could be said for my index trades.
I have a very specific turn this week and I suspect it will happen mid-week. I had hoped it came yesterday afternoon, but as far I am concerned the fact that we are seeing the market so weak ties in perfectly with the notion that 90% of the damage is done in the last 10% of the cycle.
I have bought some Dow for March this morning. I have bought some Hang Seng for January and some Dax for March too. I believe we will see a turn over the next 24 hours.
I have included the Market Map for today in the FTSE and in the Dow. It will be an interesting day. I dont think I will be doing too much intra-day trading because my bias here is for higher prices. I know what the trend is, so I will rather sit out and wait for the market to show some real buying interest.
The FTSE is being called below 6000. I want to see how institutions are going to react to that.
Click to enlarge charts
The chart below is the Dax chart overlayed onto the Bradley stockmarket prediction model. This one is calling for a turn here too. I don't pay too much attention to this model, but I thought I would show it to you nevertheless.
I am living the highlife: I am doing a radio interview for radio Wales at 08:00am on nationalisation of Northern Rock :)). It means I wont update properly until around 9am.
The US futures are being slammed on rumours/news that CitiGroup is cutting its dividend. It may save City upteen billions, but the market is probably not going to like it. I am still long the FTSE but have been forced to hedge this morning as I can't watch. I will update around 9am.
Regards
Tom
14th January 2008 - 07:45am
I have bought some more FTSE and Dow this morning. Someone, an unfortunate soul, just made an error and sold 60,000 e-mini contracts and plunged the market for a minute or so. Now we are back up to where we were.
Let's review where we are in the market briefly. We had a plunge on Friday night, which will either continue today or we will see a reversal. I am betting on a reversal. I have several reasons to do so:
1/ we printed a perfect 1:1 on the FTSE. It even looks like a Gartley pattern ( please view chart from Friday)
2/ The Bradley model is turning. I am putting less emphasis on this, but fact is we are deeply oversold, and overdue a correction. The trend is down of course, but I am betting that the turn from Wednesday will hold the market here.
The Market Map for today is pointing to higher prices. Here is the one for the FTSE 100:
ANALYSIS
