Once again, let me start with some of my morning tweets:
· GM all. I don't have much of an upside target but may test 1410. Haven't seen any downside trigger yet. SPX hourly reversal at 1395
· Retest of overnight high in ES failed. But also a small double bottom. lets just wait and watch which way it goes. No rush to front run.
· Selling or shorting here would be dumb. At least we should see the hourly reversal.
That hourly reversal now stands at 1404. The daily reversal is at 1375 and long term monthly reversal is at 1320. So till 1320 is taken out we are still in an uptrend. Take that. I would expect almost everyone to be numb by now and resigned to never ending up move. Already we see talks of SPX 1600 and beyond!
But I think we are now entering in a correction zone. The next few days may bear me out. I would expect between 3-5% corrections by the end of the month. However such a correction will definitely be a buy opportunity. Precious metals continue on a sell signal and we may have to wait till Mid-April for a decent tradable bottom. Euro is making an inverse H&S and we may see a bounce upto 1.33. The AUD/USD and SPX correlation has now been replaced by NZD/JPY and SPX.
This is a classic example as to how old correlations break down and new are formed.
US $ index lost 3 days in a row but we may see a rebound from here.
A lower close will give a sell signal and considering the total market, we are not ready for the blast off rally yet. May be next month.
As you can see, more often than not, it pays to follow the unbiased and uncluttered market analysis. I would be wrong from time to time but I have now incorporated the trend following algorithms with my other parameters which should reduce the whipsaw and will prevent front running. No economic analysis or complex charts based on TA or EW. Pure trading and investing guidelines which works.
You may incorporate these signals with your methodology and see the results yourself. So pass it on to your friends and family who might be interested in stock market. And do follow me in twitter (@BBFinanceblog) as you will find it useful. Thanks for reading http://bbfinance.blogspot.ca/
in Nasdaq we have now nice 3 peaks and doomed house pattern.. Down to 2580, then up to 2650 and that is it. down to 2000
ReplyDeleteI am following the SPX and I think we are at point 21. My cycle analysis is indicating the peak, point 23 around mid-April.
DeleteIf you take out Apple, Nasdaq has actually not done very well. So may be it will fall before SPX. Just like Russell 2000.
BB, any idea / background information on why "The AUD/USD and SPX correlation has now been replaced by NZD/JPY and SPX". What is the mechanism behind this? Thanks!
ReplyDeleteI really don't know Ringo. I just see that NZD/JPY is having a better correlation now.May be because AUD is reducing the interest rate. But honestly, there can be so many factors. Sometimes back it was EURO.
DeleteThanks - related question since I am not familiar with currency markets - what interest rate do you mean in your statement: "May be because AUD is reducing the interest rate". You made a similar statement a few weeks ago but I still don't understand it. Thanks!
DeleteIt is the rate of interest RBA sets. Like in USA where the Fed has an interest rate of 0-.25 which they charge to Banks, RBA charges a base interest of 4%. So big banks would borrow in low interest currencies like JPY or USD and invest in currencies like AUD which pays more. This is called carry trade. Of course it is more complicated than this, but you get the idea.
DeleteGreat work on the blog, read it every night and follow your twitter.
ReplyDeleteOne question, are you long currently? And would you add here?
Thank you. I am market neutral now. Find it too risky to be long. Need some correction before getting long again. May be by month end.
DeleteNice post. I enjoyed your post a lot. It is so interesting that I couldn’t take away my eyes from your blog
ReplyDelete