Calibrating Gann`s Planetary Lines

Transcription

Tradersworld
January/February 2011
ISSUE #48
com
Introduction to Roger Babson’s
Action Reaction Trading Technique
Being Accountable
Dynamic Trading Workshop
Catching Significant Trends
Vantage Point Review
The Trading Strategies
Time Factor Points of Force
Notes on Day Trading from
Novy Principles of Market
Flow
The Gartley
Trading
Book Review
Minimizing Financial Risk
What Really Matters Most
About Markets
17-Year Cycle & Interest
Rates
Calibrating Gann’s
Planetary Lines
WWW.TRADERSWORLD.COM January/February 2011
1
Letter From The Editor
Issue#48 has
many excellent
articles in it.
TRADERSWORLD
Editor-in-Chief
Larry Jacobs - Winner of 2001 World Cup Championship of
Stock Trading
Office
2508 W. Grayrock Dr., Springfield, MO 65810
Contact Information
417-882-9697,800-288-4266
Email: publisher@tradersworld.com
Traders World Magazine
Sonata Trading Computers
Traders World Online Expos
Traders World Magazine Digital Edition
is now 100% digital. It can be read on
our computer, and Ipad or any device the
reads pdf files. The benefits of this the
digital medium is already very clear. And
those benefits will continue to multiply in
the coming months as digital evolves. With
Traders World Digital Magazine, subscribers
will continue to receive the same quality
reviews and articles from expert traders
that you have come to expect from us in
the last 20 years. Our coverage will not
alter, only the format, which offers these
benefits:
1) It arrives in your e-mail when it is
released automatically.
2) It’s in a completely portable pdf
document. Once you’ve downloaded the
issue (which takes a matter of seconds) you
can view it anywhere on your computer.
3) It looks like the Traders World
Magazine you’ve known. The format is
the same, only tweaked for the digital
experience.
I think you will enjoy this issue.
- Editor
Larry Jacobs
2
Copyright ©2011 Halliker’s, Inc. dba Traders
World. All rights reserved. Information in this publication must not be reproduced in any form without written permission from the publisher. Traders
World™ (ISSN 1045-7690) is published 4-6 times
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Contents
Jan - Feb 2011 Issue #48
7 Being Accountable
By Adrienne Toghraie
11 Dynamic Trading Multimedia
E-Learning Workshop Review
By Larry Jacobs
18 VantagePoint Intermarket
Analysis Software Review
25 Calibrating Gann’s Planetary
Lines
By William Bradstreet Stewart
32 The Trading Strategies to
Employ in Today’s Challenging
Markets
By Glenn Neely
40 Time Factor in Points of Force
By Oleksandr Salivon
42 Notes on Day Trading from Novy
Principles of Market Flow
By Leonard Novy
47 Introduction to Roger Babson’s
By Ron Jaenisch
4
57 Minimizing Financial Risk in a
Changing Enviornment
By Steve Selengut
67 Harmonic Elliott Wave
By Ian Copsey
74 Position Manager from CSI
78 Gann and Murrey
By T.H. Murrey
81 What Really Matters Most About
Markets
By Jeff Rickerson
85 The Law of Cause and Effect:
Creating a Planetary Price-Time
Map of Market Action Book Review
87 Gartley Trading Method Book
Review
90 17-Year Cycle and Interest Rates
November 1010 Ushers in Major
Transition Period
By Eric S. Hadik
96 Sync Yourself into the Market
By Larry Jacobs
Advertisers
03 World Cup Championships
44 Jack Winkleman
06 eSignal
45 Tim Bost
08 Traders World Subscription
46 Specialist Trading
09 Trading On Target
50 NoBSFX
10 Mikula Forecasting
56 Traders World Online Expo #9
13 Dynamic Trading Multimedia
E-Learning Workshop
60 Market Investment Management
63 Tsunami Trading
15 Traders Coach
65 Super Timing
19 Selfish investing
66 Merriman Market Analyst
20 Vantage Point Software
73 Traders World Back Issues
23 SFO Magazine
75 CSI Commodity Systems Inc.
26 Sacred Science
79 Murrey Math Trading Supplies
28 Sacred Science
83 Market Optimizer
30 Sacred Science
89 Market Analyst
33 Neo Wave Institute
95 Know Yourself Astrology
35 Jan Arps
97 Best Selling Books
37 Gann Numbers Newsletter
38 Traders World Online Expo DVDs
39 ELWAVE
43 Training for Traders
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6
Being
Accountable
By Adrienne Toghraie, Trader’s Coach
help
• Realize that they do not have what it
takes
If you are committed to doing whatever
it takes to follow your rules to reach a
higher level of profit, you should consider
asking someone to help you with this task if
you are not doing a good job of it yourself.
F
rom the time we are born, most
of us learn that we must be
accountable for our actions. First it
is to our families and then later to
our teachers, preachers, coaches,
and society. Since traders are already
conditioned to be accountable, they should
make use of this tool in reaching for trading
mastery.
Sweeping it under the carpet
Traders like to think that they only need to
be accountable to themselves in order to
get the best out of their trading. But it has
been my experience that most traders fail
miserably at this task. So why are traders
not able to do this?
They do not want to:
• Be wrong
• Admit that they are changing their rules
• Face up to the fact that they do not
have good rules
• Realize that they need psychological
Who could take on the role of a trader’s
accountability?
• A significant other
• A friend
• A trading buddy
• A teacher
• A coach
be
•
•
•
•
•
•
•
•
•
What would a person need to help you
more accountable?
A clearly defined set of rules from you
Your commitment to telling the truth to
them
An accounting of the trades you took
Why you think the trades you took were
good opportunities
The risk/reward ratios before the trade
The money management procedure
you followed
Whether or not you followed your rules
The lessons you learned
And at the four month periodical review,
the changes you would make and why
Reward or punishment
There
should
be
a
clearly
defined
7
SUBSCRIPTION
TRADERS WORLD
MAGAZINE Digital
predetermined punishment or reward that
both of you agree upon for not following
your rules. Here are some examples of
punishments or rewards to consider.
Punishment
• No trading the rest of the day
• Walk around the block before taking
the next trade
• Twenty push ups
• Limit the size of your trades for the rest
of the week
Rewards
• Ten percent of every good trade will go
into a rewards account for you
• A food or entertainment treat
• Time with a special friend
• Any - my favorite, a massage
Conclusion
Click to
get the
48 issues on
CD
Click to
Subscribe for
only $19.95
8
When you make yourself accountable
in trading to someone else, you activate
that part of you that has already been
programmed for accountability. In doing
this you will be more accountable to
yourself.
ADRIENNE TOGHRAIE, a Trader’s Coach,
is an internationally recognized authority
in the field of human development for
the financial community. Her 11 books on
the psychology of trading including, The
Winning Edge1-4 and Traders’ Secrets
have been highly praised by financial
magazines. Adrienne’s public seminars and
private counseling have achieved a wide
level of recognition and popularity, as well
as her television appearances and keynote
addresses at major industry conferences.
www.TradingonTarget.com
919-851-8288
Adrienne@TradingOnTarget.com
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10
Review: Dynamic Trading
Multimedia E-Learning
Workshop
I
By Larry Jacobs
n the past few years, trading courses
have proliferated for almost any
type of trading. Some have taken
advantage of new technologies to
deliver their educational material,
others have been little more than Power
Point presentations with voice over. The
Dynamic Trading Multimedia E-Learning
Workshop takes advantage of E-learning
techniques to deliver a comprehensive
learning experience unlike most other selfstudy trading courses.
Robert Miner has been educating
traders since the mid-1980’s. He was one
of the presenters at our first conferences
in 1989 sponsored by Gann-Elliott Trader
Magazine, the predecessor to Traders World
Magazine. At that conference over twenty
years ago, he presented his W. D. Gann
Home Study Trading Course which was the
first independent study course for traders
that we are aware of. So, Miner does have
a long and successful history producing
educational materials for traders.
Miner’s credentials include publishing
an advisory service since the mid-1980’s,
writing two of the best selling trading
books of all time (Dynamic Trading and
High Probability Trading Strategies),
winning first place in the Robbins World
Cup Championship of Futures Trading,
being named Guru of the Year by the Super
Traders Almanac, speaking at many of
the trading conferences for over 20 years
beginning with the Computrac conferences
over 20 years ago and more.
Miner calls his latest self-study
workshop the culmination of over twenty
years of real world trading experience
and trading education. He has taken
advantage of contemporary, self-study
learning techniques with the Dynamic
Trading Multimedia E-Learning Workshop.
Following the introduction sections where
Miner discusses trading as a business,
trading verses forecasting and more,
he begins to focus on each of the three
primary areas of technical analysis that
are a part of a complete trading plan
he teaches including pattern, price and
indicator strategies.
11
Miner describes that his trading
approach is to identify conditions with a
high probability outcome and acceptable
capital exposure. He teaches three technical
areas to identify the trade setups including
simple pattern recognition, price reversal
zones and multiple time frame momentum
strategies. None of these technical areas
should be foreign to traders but Miner does
approach them from unique and more
simplified perspectives than we usually
are taught in other trading courses.
As one of the leading Gann, Elliott and
Fibonacci traders and trading educations for
more than twenty years, we would expect
the course to include complete price and
pattern analysis strategies. Miner delivers
with a quick and simplified trend and
counter trend pattern approach derived
from Elliott wave and price reversal zone
strategies, as he describes, go beyond
simple Fibonacci retracements.
A unique feature of his trading plan that
we have not seen implemented in other
trading courses is the Multiple-Time-FrameMomentum-Reversal strategy which is
the primary filter taught to identify which
markets have the best trading opportunity
regardless of the time frame traded.
But, the heart and soul of the workshop
are the last two major sections, Practical
Trade Strategies and Trading The Plan.
In these major sections, The Dynamic
Trading Multimedia E-Learning Workshop
teaches the student a complete trading
plan from objective entry strategies to
how to manage the trade to the exit. This
is where the bar-by-bar screen recordings
are put to good use as Miner challenges the
student to identify what to do (or not do)
as each new bar is added to the chart. This
is as close to a live trading and educational
12
experience that is possible.
Each section is divided into 5-10
relatively short modules. Each module
includes background instruction, step-bystep and bar-by-bar details of the specific
technical or trading strategy followed by
a summary and short quiz. Each module
also includes a PDF file of the summary of
the key strategies taught in the module so
the student will compile a complete quick
reference guide of the entire workshop
and trading plan.
The Dynamic Trading Multimedia
E-Learning Workshop is not a quick study.
Miner states it should take a student about
30 hours to complete the course including
all of the study materials and the quizzes.
We don’t believe this is too much time to
learn a comprehensive trading plan from
a 20+ year veteran. Miner warns the
students to study the workshop in the order
the sections were designed because each
module builds on the strategies taught in
the prior modules. After the entire course
is complete, the student can then go back
to specific sections to review at any time.
I think The Dynamic Trading Multimedia
E-Learning Workshop is an exceptional
course for any trader and any time frame.
To view a video of the trade strategies
taught in the Dynamic Trading Multimedia
E-Learning Workshop and a special offer
for Traders World Magazine, CLICK HERE.
(goes to (http://www.dynamictraders.
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13
Catching Significant Trends
Equals Big Profits!
By Bennett McDowell, President, TradersCoach.com
Most money in trading is made from
catching a significant trend. Most money
lost in trading occurs by missing or being
on the wrong side of trends. So the
real question is “How do we protect and
preserve our trading capital as we position
ourselves to catch the next profitable
trend?
Significant trends are known to emerge
from market consolidations and it is
during these consolidations that traders
experience “whip-sawing” leading to
psychological trauma that can cause havoc
with a trader’s life, which can cause the
trader to miss the trend altogether!
It is said that markets trend
approximately 35% of the time, meaning
that 65% of the time they are trend-less.
Consolidations are known to occur before
many significant market trends and to be
a profitable trader you must learn how to
exploit these trends while not losing your
money when the market is trend-less.
Consolidations: A Textbook
Definition
Let’s define a market consolidation. A
dictionary definition of a market is “the
world of commercial activity where goods
and services are bought and sold; without
competition there would be no market”.
A dictionary definition of a consolidation
is “something that has consolidated into
a compact mass; combining into a solid
mass; an occurrence that results in things
being united”. Reading these two text
book definitions leads one to believe that
14
a market consolidation is one where the
competition between buyers and sellers
unite to form a compact mass. A trader’s
definition of a market consolidation is one
where prices have remained range bound
within a narrow price channel.
Is market consolidation an area
where little or no new information has
come into the market to cause a greater
disagreement of value or perceived value
which would move prices? And do trends
occur because the value or perceived
value is changing so much that the price
must change to represent the new value?
Answering yes to these questions leads to
the conclusion that market consolidations
are areas where no new value perceptions
are being generated. Thus, prices remain
“tight” or range bound.
The Nature or Psychology Of
Market Consolidations
Consolidations by their very nature can not
last too long since they become increasingly
unstable with time. Most traders view
consolidations as a stabilization of price,
but
consolidations
actually
become
increasing unstable with time. In fact the
longer a market remains consolidated, the
more unstable it becomes.
Market consolidations have their own
cycles.
During their initial formation
traders are undecided as to value and the
price oscillates. If this condition continues,
traders’ perceptions of this asset’s value
remain the same until new information
enters the market to change perceptions.
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5
Until new information arrives, the
consolidation becomes narrower and
narrower to a point where the consolidation
is now very unstable and this is where new
trends are born.
The longer or more mature the
consolidation is, the larger the trend usually
is as well. Lengthy or mature consolidated
markets are so unstable that even just a
whisper of new information coming into a
consolidated market can make it move,
but a shout of information can make it
trend fast!
Once you spot a mature consolidation,
your trading approach should be to
bracket the upper and lower part of
the consolidation.
This helps to avoid
unprofitable “whip-sawing” trades within
the consolidation channel caused by
insignificant trading reactions from minor
market information. It is important that
16
your trading approach not react to every
“whisper” of information that the market
ultimately finds meaningless.
By bracketing your trade entries above
and below the consolidation channel, you
automatically eliminate unnecessary losing
trades. If you are an aggressive trader
who welcomes the additional risk of a few
losing trades within the channel to achieve
a superior trade entry price, then you
should wait for the mature consolidation
to get very tight and thus very unstable.
This will increase your odds of
successfully timing the next significant
trend and therefore reward your aggressive
entry approach. Just as important as the
length or time of the consolidation is the
low Average True Range or volatility of
prices in recognizing the mature end of
the consolidation before a significant new
tend emerges. It is important to note
that not all significant trends emerge only
from market consolidations. But if you
recognize a consolidation in the market,
the potential is great for a significant trend
to emerge if the consolidation has become
so consolidated it is now also become
unstable.
Finding & Monitoring Market
Consolidations
The first step is to find markets that are
in consolidation so you can be ready to
trade the breakout when it occurs. To
find these consolidated markets, it will be
best to scan for markets will low volatility
and narrow price movement. Look for a
consolidation with at least 20 price bars
before considering it for a potential trade
based on “bracketing the high and low of
the channel.
Since markets can consolidate for
weeks and even months, you will want to
monitor several markets simultaneously
while they are in consolidation, this way
you do not have to wait a long time before
entering a trade.
Active traders can use this technique to
scan for trade setups, and with 9,000 +
stocks the trader can be quite active! If
you are a day trader, you can scan intraday
charts looking for consolidations as well.
Trading Market Consolidations
Once you have identified the consolidation
of at least 20 price bars, the next thing
to do is to draw a line on the top and
the bottom of the consolidation channel
effectively “bracketing” the consolidation
Then place your long trade entries onetick above the upper consolidation band,
and your short trade entry one-tick below
the lower consolidation band.
Where To Place Your Stops
Once the market breaks and begins to
trend, stops can be adjusted according to
market activity, with the initial stop-loss
being placed on the opposite side of the
consolidation channel in relation to which
way the market started to trend.
Trade Example Combining
Bracketing
The stock chart below illustrates a market
consolidation in the Nortel’s stock with
upper and lower lines drawn in that bracket
the consolidation.
Trade entries are
placed above and below the consolidation.
Also note how prices become even more
compressed towards the end of the
consolidation just before this market
begins to trend. This occurs often since
markets usually spring from compressed
price consolidation.
When the market finally breaks above
the channel you should enter your trade
one-tick above the upper green colored
band or line drawn on the chart above.
Your initial stop-loss is placed one-tick
under the lower band and adjusted upward
as market activity warrants.
Conclusion
Sometimes one good technique is all we
need to be profitable traders. Trading from
market consolidations may just be the
trading technique you have been looking
for.
Whether you’re a futures trader, stock
traders, day trader or position trader,
adding these trading concepts to your
trading toolbox should prove worthwhile.
www.TradersCoach.com
17
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Software from Market Technologies gives
individual traders that needed edge.
To be clear, VantagePoint does not
produce buy or sell signals, nor is it an
automated trading system.
Instead,
VantagePoint uses proprietary, patentpending technologies involving neural
networks applied to global intermarket
analysis to analyze how related markets
influence each other. These technologies
produce unique predictive, technical
indicators that make short-term, highly
accurate trend forecasts.
In the trading world, the trend is truly
your friend, and having a tool that can
identify trends – particularly impending
changes in trend direction -- reliably and
consistently is a big step toward trading
success.
VantagePoint has been serving traders
since 1991 when Louis Mendelsohn first
introduced trading software that utilized
what, at the time, was his revolutionary
intermarket-analysis approach using the
pattern recognition features of neural
networks. Mendelsohn is no stranger to
18
technical analysis. In 1983, he was the first
person in the world to introduce strategy
backtesting in commercially available
trading software for personal computers.
Market Technologies has continued
to increase VantagePoint’s predictive
accuracy over the past two decades by
refining its application of neural networks
to global intermarket data, while adding
more leading indicators, expanding the
markets covered, and generally improving
the software’s functionality and userfriendliness. Even newcomers to trading
can easily benefit from its forecasting
capabilities without having to “look under
the hood.”
Product Overview
VantagePoint software provides leading
indicators for more than 600 markets in
four major categories: forex, futures,
stocks, and exchange-traded funds
(ETFs).
The forex category includes
the eight major currency pairs and 13
important cross rate pairs. The futures
category covers all of the major financial
and commodity markets.
In
prior
versions,
VantagePoint
forecasted only U.S. Stocks comprised
of 12 popular U.S. Stock Sectors. The
newest version has added even more U.S.
stocks in response to customer demand.
Even more exciting to VantagePoint’s
customer base in over 125 countries is the
Virtue of Selfish Investing
Dr. Chris Kacher
Gil Morales
Market pros Dr. Chris Kacher and Gil Morales provide stock set-ups and ETF recommendations in real-time via email so you can immediately act on their alerts (for both beginning
and advanced investors):
• Dr. Chris Kacher used his timing model to help generate a long term return
of +18,241.2% in the stock market as verified by KPMG.
• Gil Morales achieved a return of +10,904.25% as audited by Rothstein Kass.
• Dr. Kacher and Gil Morales wrote the book, “Trade Like An O’Neil Disciple:
How We Made 18,000% in the Stock Market”.
• 2010 market timing results: +83.8% (unaudited results using 3x ETF TYH).
• 2009 market timing results: +118.3% (unaudited results using 3x ETF TYH).
• CONSERVATIVE APPROACH: using market timing model: June 9, 2009 - June 9
2010 +55.1% with exposure to the market less than half the time as audited
by Rothstein Kass.
• CONSERVATIVE APPROACH: 2008 market timing results: +38.8% using no
leverage (unaudited results).
Watch for Gil Morales and Chris Kacher on Traders World Online Expos
Dr. Chris Kacher / Gil Morales
MoKa Investors, LLC
181 Culver Blvd. Suite B
Playa del Rey, CA 90293
www.mokainvestors.com
www.selfishinvesting.com
19
20
addition of 12 Sectors of
Indian stocks as well as
12 sectors of Canadian
stocks.
VantagePoint has also
expanded its forecasting
coverage of ETFs and
now includes Canadian
ETFs in addition to U.S.,
international, short, and
ultra short funds.
VantagePoint
makes
searching all of these
global markets extremely
easy with its IntelliScan®
feature. Users can choose
from more than 70 filters
when scanning markets for
a potential trade. When
a market fits the selected
criteria, a mouse click takes
you to that chart so you can
decide if you want to make
a trade. (This information
is also available in daily
and historical data tables,
which are also exportable
into Excel).
Leading Technical
Indicators
The real power behind
VantagePoint comes from
the
forecasts
provided
by its leading technical
indicators derived from
Mendelsohn’s
patentpending
technologies,
which he and his research
team have been perfecting
over the past quartercentury.
Predicted
short-term,
medium-term and longterm
moving
average
crossoversWhen
a
predicted moving average
crosses an actual moving
average, it suggests an
impending trend change.
VantagePoint provides the
optimal moving average
combinations, but users
can also choose their own
combinations from among
six predicted exponential
moving averages of typical
prices and three actual
simple moving averages of
the daily close.
21
Predicted shortterm, mediumterm and long-term
differences
These indicators compare
the differences between
a
predicted
moving
average and an actual
moving average for the
various time periods. The
predicted differences act
as a momentum indicator
in evaluating a trend’s
strength or weakness and
often provide an early alert
about an impending trend
change.
22
Predicted Neural
Index (PIndex)
This proprietary indicator
compares today’s actual
three-day moving average
with a predicted three-day
moving average to forecast
whether the typical price will
be up or down in two days.
PIndex is the indicator cited
by Market Technologies for
its accuracy rates of up to
86% across a broad range
of markets over a broad
range of time. Predicted
next day high and low
This
indicator
gives
traders a heads-up on what
to expect for the next day’s
trading range. Breakouts
from this range can be
used to identify precise
entry/exit points to go
along with the short-term
forecasts provided by other
indicators.
Other Predicted
technical indicators
These indicators actually
forecast values one day
ahead for such popular
indicators
as
Moving
Average
ConvergenceDivergence
(MACD),
Stochastics,
Relative
Strength Index, and True
Strength Index.
Become a Better Trader with SFO!
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23
The VantagePoint charts also provide
other information, such as volume, open
interest, differences between the predicted
high or low and actual high or low. Included
as well is the nifty ProfitCalcTM tool, which
lets you instantly see the difference in
points and dollars between two dates on
a chart. The tool even calculates pips
for forex traders, and ticks and points for
futures traders.
The Accuracy of the Leading
Indicators
Extensive
evaluations
and
certified
independent,
scientific
studies
conducted by Ph.D. mathematicians and
rocket scientists over decades verify
VantagePoint’s accuracy statistics.
A recent study demonstrates, once
again, VantagePoint’s predictive indicators
live up to the expectations set by Market
Technologies. Here is a summary of the
accuracy study broken down by market
segment for the period 10/30/2009 to
4/30/2010.Commodities: The average
percent accuracy for the Neural Index was
78.1%, with a low of 73.3% for E-mini
Silver, to a high of 84.7% for ASX All
Ordinaries, E-Mini Japanese Yen, Gas Oil.
Forex: The average percent accuracy
for the Neural Index was 79.1%, with a low
of 74.8% for Euro / U.S. Dollar, to a high
of 82.4% for Australian Dollar / Canadian
Dollar.
ETFs: The average percent accuracy
for the Neural Index was 76.4%, with a
low of 71.8% for iShares MSCI Germany
IDX, to a high of 84.7% for iShares COMEX
Gold Trust.
Stocks: The average percent accuracy
for the Neural Index was 77.3%, with a low
24
of 70.2% for Adobe, to a high of 87.0% for
Cheesecake Factory.
Of course, there is no “holy grail” in
trading, and nothing works 100% of the
time, but increasing the odds of success
is what trading is all about. VantagePoint
does this. The fact that traders across
the globe have successfully utilized
VantagePoint since 1991 is a testament
to its predictive accuracy and increasing
relevance in today’s globally interconnected
trading environment where correlations
and hidden relationships between related
(and even seemingly unrelated) markets
now dictate market movements more than
ever.
Conclusion
Intuitively, traders realize that today’s
markets influence each other, and the
VantagePoint
indicators,
relying
on
intermarket analysis and an “intelligent”
neural-network process, provide a unique
perspective on markets, a perspective you
won’t find in any other analytical software
package. Traders still need to develop
their own strategies using these indicators,
but with the outstanding customer support
and the educational materials available,
traders quickly get up to speed, which
makes it possible to recoup the cost of
the software very quickly. The quality of
VantagePoint speaks to the adage, “You get
what you pay for.” If you are serious about
becoming a successful trader or investor
and you are looking for an edge that spots
and helps confirm potentially profitable
trading opportunities, while helping you to
avoid dangerous traps, VantagePoint is the
tool for the job.
For more information go to
www.Tradertech.com
Calibrating Gann’s
Planetary Lines
T
By William Bradstreet Stewart
hrough the autumn and winter of
1948, W. D. Gann hand charted the
May 1949 Soybean futures contract
traded on the Chicago Board of Trade. Unlike
much of Gann’s work, this chart survived
and is publicly available from numerous
sources. Many analysts have commented
on this chart and a number of them have
cited Gann’s use of planetary longitude.
I have reproduced it here with certain
planetary lines highlighted, as defined by
the color key below, showing exactly what
each of these lines represents.
W. D. Gann’s 1949 May Soybean Chart –
Planetary Lines Colored
Red Line = Mars Longitude – Blue Line =
Jupiter Longitude
Green Line Jupiter 255° Horizontal –
Dashed Blue = Jupiter 270° Horizontal
We can see here that Gann is drawing
trendlines and price level lines based
upon planetary longitude on this famous
chart, and these lines perfectly define the
trend as well as the top in the Soybean
market. Gann never spoke or wrote in
any detail about this technique, and the
few references we have to it appear only
on some of his most complex and messy
charts, having to be deciphered and
reverse engineered by the astute Gann
analyst in order to determine what he was
actually doing.
Many people have experimented
with using this technique, and a number
of software programs have functions
which
produce
variations
on
this
application. However, often after years
of experimentation, researchers are still
unable to discover the true potential of
Figure 1
25
A COMPENDIUM OF ASTRO-ECONOMIC
INFLUENCES PRACTICALLY APPLIED!
TO 110 YEAR ANALYSIS OF THE DOW JONES INDUSTRIAL AVERAGES
BY RICHARD SCOTT
TWO NEW FINANCIAL ASTROLOGY COURSES & TIME PROJECTION TOOLS!
This new course provides a direct and accessible doorway into the practical application of astro-economic theory for
trading. The difficulty that confronts most astro researchers is that there is too much contradictory material available,
which takes years to organize into a tradable methodology.
Richard Scott spent 8 years doing this research, by hand, watching the markets day after day, studying each change,
and then tracking down every influence and lead that he could find which would demonstrate to him the cause behind
market movements. He compiled 110 years of Dow Jones Industrial Average data, and, with his ephemeris in hand,
tracked down every instance of every influence. This course presents the results of that labor, summarized,
simplified, and clearly explained so that any trader can begin tracking and trading planetary influences in the markets
in a matter of weeks rather than years.
It further teaches how to determine the ongoing energetic background environment that the market is traveling
through at all times. This environment is defined by the summation of the underlying planetary energies at any time.
Any projection you have from any system can now be cross-checked with the Planetary Energy Background, and you
can affirm whether a turn will likely be a top or a bottom, or a trend will go up or down. This is very simple to
understand and to apply to your future charts, giving you an ongoing read on the energetic forces behind the market!
VOLUME 1 TEXT 240P. - VOLUME 2 CHARTS 90P. 170 IMAGES - BLACK SUEDE HARDCOVERS
TECHNICAL ANALYSIS & TIME PROJECTION
THE HARMONY OF MATHEMATICS & NATURE
BY CATALIN PLAPCIANU
ONE OF THE MOST POWERFUL & ACCURATE ASTRO-TIME PROJECTION TOOLS EVER DEVELOPED!
The Time Projection Technique presented in this course develops a new type of planetary time projection,
through the projecting of pairs or groups of planetary relationships into the future. The result of these
combinations is the projection of highly accurate future turning points with a false signal ratio of only 2
out of 10, or better. The time projections are highly accurate, generally occurring within a day of the actual
signal, even from points 30 years in the past. Specics of the projections can dene major turns, vs.
intermediate turns, vs. minor turns, and some combinations give very accurate projections of polarity,
whether a turn will be a bottom or a top. Using overlapping projections of multiple planetary
congurations serve as conrmations of important turning points, ltering out errors to less than even one
false signal in ten. The course also presents a detailed introduction to astrology, two different systems to
project price, and a means to mathematically determine the SPEED of the market. There are numerous
trading examples given for long, intermediate and intraday trading.
See our website for more details!
BLACK SUEDE HARDCOVER 264 PAGES WITH 200 CHARTS & DIAGRAMS & PROGRAMED TIME TOOL
SACRED SCIENCE INSTITUTE Ө
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EMAIL: INSTITUTE@SACREDSCIENCE.COM Ө US TOLL FREE: 800-756-6141
INTERNATIONAL 951-659-8181 Ө MAIL: P.O. BOX 3617, IDYLLWILD, CA 92549-3617
26
this powerful tool, because there is just
too much variation in planets, harmonics,
settings, and markets to easily make
sense of this phenomenon. But it turns
out that it is not only due to the range of
factors that leave most people incapable
of applying this technique effectively, but
also due to a price and scaling issue.
When Gann drew his May Beans chart,
Soybeans was trading below 360 on the
price scale, so his planetary longitudes
could easily be drawn right on his chart
using their exact longitudinal values. But
in many of our modern markets, prices
have gone through many multiples of a
$360 price scale, and when trying to apply
planetary lines to these new scales, the
lines skew and do not provide the effective
insight that they did for Gann above. This
has been the issue that has led so many
analysts to fail in finding a real use for this
tool. What is needed is a calibration factor
which realigns these Key natural planetary
forces to different markets with different
price scales, so that the planetary lines
can be usefully plotted on modern day
markets.
I have come across only one person
who has resolved this problem, Daniele
Prandelli, who in his new trading course,
The Law of Cause and Effect, solves
the puzzle of Gann’s Planetary Price Line
technique, by developing a mathematical
offset factor, or calibration rate, through
which powerful and effective planetary
lines can be laid out on any chart, in any
market, showing important price and time
trigger points and support/resistance
levels, which the market moves between as
if it were pushed and pulled by some kind
of magnetic force. Without the use of this
conversion factor one can put planetary
lines on charts all day long, but they do
not give accurate or consistent results that
one can count on. The endless variations
between the aspect harmonics can overload
a trader with so much information that it
all becomes essentially useless, unless
Figure 2
27
THE LAW OF CAUSE & EFFECT
CREATING A PLANETARY PRICE-TIME MAP OF MARKET
ACTION THROUGH SYMPATHETIC RESONANACE
BREAKTHROUGHS
IN
GANN’S PRICE/TIME RELATIONSHIPS
BY DANIELE PRANDELLI
W. D. GANN’S PLANETARY LINES CRACKED USING CALIBRATION FACTOR!
This new course unravels the correct application of WD
KNOW IN ADVANCE!
Gann’s Planetary Longitude Lines. Gann used these
lines on his famous May Soybeans chart, but most
 EXPLAINS MISSING CALIBRATION FACTOR
people have never been able to figure out how to apply
WHICH FITS LINES TO ANY CHART!
them as effectively as Gann did. Until now!
 DETERMINE IMPORTANT ENERGY LEVELS
This new course explains why most analysts have failed
USING PRECISE MATHEMATICAL RULES
here! There is a missing conversion factor or calibration
rate which must be used to adjust the planetary
 KEY PRICES TO TAKE TRADING POSITIONS
relationships to the scale and vibration of the market at
any particular price level. This book CRACKS the
 FORECAST CLEAR TARGET EXIT LEVELS
conversion factor and makes Planetary Lines one of the
most valuable tools you’ll have in your toolbox.
 KNOW IMPORTANT TURNING POINTS THRU
CONFLUENCE OF PLANETARY LINES
Simple to apply with the proper software, which is easily
available, this powerful technique will give an added
 DETERMINE THE SLOPE OF THE EXPECTED
dimensional perspective to market action. These lines
TREND THROUGH PLANETARY ANGLES
call both price and time, and are one of the easiest but
most powerful of all Gann tools. Once you know them,
 LONG-TERM, INTERMEDIATE AND INTRADAY
you will NEVER stop using these lines to trade from!
FOR A DETAILED WRITEUP INCLUDING CONTENTS, SAMPLE TEXT
& CHARTS, FEEDBACK & MORE SEE:
WWW.SACREDSCIENCE.COM/PRANDELLI/LAWOFCAUSEANDEFFECT.HTM
SEE HOW LINES ON CHART CALL MOVES!
Notice how the market just bounces along
from one line to the next, and particularly
how it often turns exactly upon these lines.
Planetary price lines are Magnetic Attractor
Fields which draw the market to them, then
push them away again, giving a trader a map
of the geometric, electro-magnetic lattice that
the market is influenced by. In the same way
that electrons jump between orbital levels,
the market will vibrate between these zones
defined by planetary resonance.
BLACK SUEDE HARDCOVER 240 PAGES
28
one understands how to mathematically
calibrate these lines with each particular
market. When this is properly done, the
planetary lines serve as a kind of lattice or
grid work through which the market moves
in a predictable and tradable manner.
The following example shows the
S&P500 Index from 2007 to 2010 with
only one planetary influence, shown by
the blue lines. Notice how the market just
bounces between these blue planetary
lines, and particularly how the extreme
tops and bottoms find their reversal points
exactly upon, or very close to these predetermined price levels.
This is because planetary price lines
act as Magnetic Attractor Fields which
draw the market to them, then push
them away again, giving a trader a map
of the geometric, electro-magnetic lattice
that the market is influenced by. In the
same way that electrons jump between
orbital levels, the market will vibrate
between these zones defined by planetary
resonance.
The prior example showed only one
planetary influence overlaid on the chart,
but there are other important planets which
will determine other important levels,
providing confluence points between the
lines for stronger indications. For example,
on the following chart we are zooming in
on the same chart and adding some other
planetary lines, in order to observe how
a confluence of multiple lines can give us
an even clearer indication of an important
bottom in the market. This low is the same
major bottom from the last chart.
Notice that with the addition of other
resonant planetary lines at this March
2009 Low, there was not just one line that
confirmed this Key turning point, but a
huge confluence of multiple lines, the first
lines creating the initial resistance from the
precipitous drop, with the final Low falling
EXACTLY upon the resonant confluence of
Figure 3
29
BEHIND THE VEIL
A NEW APPLIED TRADING COURSE USING
ADVANCED PRICE/TIME TECHNIQUES TO
PROJECT FUTURE TURNING POINTS...
BY DR. ALEXANDER GOULDEN
PRESENTING POWERFUL GANN STYLE FORECASTING & TRADING TOOLS!
We are extremely happy to announce the release of a new and
deep Trading Course. Behind The Veil presents powerful
trading techniques based upon the deepest scientific and
metaphysical principles. It unveils many mysterious and difficult
theories and applications similar in approach to those of W.D.
Gann and shows a trader how to use these principles to
successfully forecast and trade the markets. DON’T MISS THIS
VALUABLE COURSE!
Dr. Goulden, a Cambridge educated scholar, penetrated many of
the hidden techniques used by Gann, and has developed
numerous new and original trading applications based upon
similar principles, leading him to the forecasting results in seen
here.
The techniques developed by Dr. Goulden will teach traders how
to identify future pivot points following which profitable market
moves ensue. All of the timing tools needed to forecast these
pivot points and the geometric tools used to identify price entry
and exit points, and to determine the nature of the ensuing trend
are demonstrated in the Course. Based upon a deep level of
metaphysical and cosmological insight, these techniques are
easily applicable, clearly presented and shown through numerous
chart examples in multiple markets, including stocks,
commodities & Forex, in all time frames, monthly to minute.
FORECASTING RECORDS
In August of 2009, Dr. Goulden produced 7
forecasts in 7 different markets. His results were
impressive, 7 out of 7, yielding 3,161 points in 7
days, with 7 trades, in 7 different markets!

Wouldn’t you like to forecast like this?
T-Notes 20-22 August. Result - a pivot low on 21
August, followed by a rally of 241 points to 2 Sept.
 Soybeans 17-20 August. Result - a pivot low on 17
August, followed by a 710 point rally in 6 days.
 Gold 17- 20 August. Result - a pivot low on 17 August,
followed by a 780 point rally to 8 Sept.
 Platinum - 23/4 August. Result - a pivot high on 24
August, followed by a 607 point drop in 7 days.
 NY Cocoa 21-24 August. Result - a pivot high on 25
August, followed by a 257 point drop in 4 days.
 NY Cotton 21- 24 August. Result - a pivot low on 26
August, followed by a 426 point rally in 7 days.
 German Bund 21-24 August. Result - a spike low on
24 August, followed by a 140 point rally in 7 days.
FOR A DETAILED WRITEUP ON THIS COURSE INCLUDING CONTENTS, SAMPLE TEXT
WWW.SACREDSCIENCE.COM/GOULDEN/BEHINDTHEVEIL.HTM
& FEEDBACK SEE:
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IN HIS BREAKTHROUGH CYCLES ANALYSIS BOOK, WHEELS WITHIN
WHEELS, FINANCIAL MARKET ANALYST AND EDUCATOR DANIEL T.
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MARKET OUT TO 2108. AS YOU CAN SEE IN THE CHART ABOVE,
HIS MODEL CALLED THE MAJOR TURNS OF THE MARKET FROM
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CAN SEE HIS FORECAST OF THE S&P 500 GOING OUT TO 2036. IF
THIS MODEL IS CORRECT, WE ARE APPROACHING MUCH HARDER
TIMES THAN WE HAVE SEEN SO FAR, ONLY WITH OCCASIONAL
SPIKES ALONG THE WAY. IF YOU WOULD LIKE TO KNOW WHEN
THESE MOVES WILL HAPPEN, THEN FERRERA’S YEARLY OUTLOOKS
GIVE THE MARKET PERSPECTIVE FOR THE UPCOMING YEAR.
THE 2008 OUTLOOK IS NOW FREE ON OUR WEBSITE
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FERRERA OUTLLOK FOR 2011 IS $250.00.
30
Figure 4
3 different planetary lines!
Another fascinating element of this
technique is that it will demonstrate that
the markets are controlled by natural order,
even at times where people think there
was random error. The following chart
illustrates the influence of the planetary
lines on a move that was considered by
main-stream media to have been caused
by a “trader” or “computer” error, causing
the S&P 500 to plummet 100 points
during the day’s trading session (with the
Dow falling about 1000 points that day in
intraday trading).
As can be seen above, the low of that
day touched EXACTLY upon the confluence
of two overlapping planetary lines! After
seeing this, how can anyone believe that the
markets are merely random? Traders who
understand these techniques KNOW there
is no random movement in the markets,
and are well poised to take advantage of
such seemingly chaotic events!
It is a simple fact that the overlay of
these powerful planetary price techniques
upon any chart adds an extra dimension
to one’s market vision and trading
indications, giving a profound insight
into the forces behind real market action.
Whatever trading tools you may use, the
addition of the Gann’s planetary lines will
provide a significantly deeper insight into
the true cause of market reversals! We
have no doubt that, once understood, no
trader will ever again place a trade without
consideration of these essential planetary
price lines.
William Bradstreet Stewart
Sacred Science Institute
Institute of CosmoEconomics
800-756-6141 - 951-659-8181
www.sacredscience.com
institute@sacredscience.com
31
The Trading Strategies to Employ in
Today’s Challenging Markets
N
By Glenn Neely, Founder, NEoWave Institute
o matter what trading technique
or methodology you employ,
ultimately, there are only three
zones you can enter a market:
near the bottom, near the top or near the
middle. If you enter a market near the
bottom of its range, you could be called a
Bottom-fisher (if you bought) or a Trendfollower (if you sold). If you entered near
the top of the range, you can be called a
Trend-follower (if you bought) or a Toppicker (if you sold). When you enter after
a market’s high or low, on a pull-back
toward the center of its range, you might
be called a Bargain hunter (which breaks
down into two categories - an Accumulator,
if you bought, or a Distributor, if you sold).
Despite the incredible universe of
market systems available to the financial
industry, ALL trading techniques fall into
only one of three categories (i.e., Top/
Bottom-fishing, Trend-following or Bargain
hunting). By definition, a market will
spend about 1/3 of its time in each portion
of a market’s 3 ranges; so, each approach
to trading works about 1/3 the time. As
a result, if you do what most do (i.e.,
stick to one trading style) you will make
money about 1/3 the time and lose money
the other two-thirds. If you want to trade
successfully 3/3’s of the time, you must
understand all three phases of market
activity, learn to determine which phase is
unfolding, then adjust your trading style to
fit that environment.
In this article – second in my “Stock
Market Predictions” series – I outline
32
the three phases of market activity
–
Bottoming/Topping,
Accumulation/
Distribution, and Trending (up or down) –
and the best trading strategies for each,
including Elliott Wave/NEoWave and other
techniques. At the end, I provide specific
trading recommendations for today’s
difficult trading environment.
Bottoming/Topping phase of
market activity
A major market top or bottom is rare, which
means it holds for a long time. Therefore,
you can’t have a major top or bottom
every week. Recognizing a market top
or bottom can be difficult, yet extremely
profitable if you’re right. Unfortunately,
this phase of market activity is one of the
most dangerous times to trade, because
it can produce repetitive losses if you
continually guess incorrectly. For example,
in an expanding environment, a market
can be in a topping phase, yet make minor
new highs over and over without changing
33
the fact that a top is forming. The biggest
mistake I see when teaching others how to
trade is that they expect or forecast major
market turns all the time (by definition,
that can’t be true), which is why they end
up losing so often.
Accumulation/Distribution
phase of market activity
For this section, let’s focus on Accumulation
first. After bottoming, a market may
bounce off its low and experience a period
of back-and-forth consolidation. This
occurs because financially powerful traders
are accumulating positions, preparing
for the future market advance. While
wealthy traders accumulate positions, less
experienced, under-capitalized traders
might panic (thinking the market will go
lower), or be forced out (due to lack of
capital) as the market retests its bottom.
. While a majority of traders are selling
into the market’s decline, that “public
activity” makes Accumulation possible for
a minority of wealthy traders. In other
words, when the majority of traders are
selling, the wealthy understand this is an
excellent time to buy (hoard positions), and
they have the “financial patience” to wait
for the demand environment to change,
forcing prices higher. Distribution phase
is the exact opposite of the Accumulation
phase.
Trending phase of market
activity
Continuing our discussion from above,
once nearly all positions that can be bought
have been purchased, the Accumulation
phase is complete. Most traders are
committed – they’ve laid their claim – and
are now waiting for the market to move
34
their way. During Accumulation, wealthy
traders capture nearly all supply in the
hope future demand will make their longterm commitment worthwhile. This sets
the stage for the Trending phase of market
activity. As the economy improves – as
it always does – the public realizes the
“end of the world” did not occur; so, their
willingness and ability to invest increases.
Over time, growing public demand forces
prices upward. (Remember Economics
101: increasing demand coupled with
limited supply creates higher prices.)
In comparison to the prior two phases,
the Trending phase lasts the shortest
period. Generally, it’s the most difficult
phase to profit from because most traders
are uncomfortable entering a market well
after the bottom (they realize they are no
longer getting a bargain).
Which trading strategy should
you employ during each
phase?
Bottoming/Topping
–
At
market
extremes, NEoWave or Elliott Wave trumps
all other techniques, leaving little doubt
what will happen next and what to do. During
this phase, Wave theory clearly portends
market potential, allowing you to catch
major turns. Ironically, at such times, the
public (and your friends!) will have the exact
opposite market perspective, leaving you
a “lone voice in the woods.” Consequently,
profiting from Wave theory requires the
ability to identify patterns and enter when
multiple patterns simultaneously end.
Identifying and entering at major market
tops or bottoms makes most traders
extremely uncomfortable. As a result,
placing your trust in Wave theory at this
time requires mental fortitude and the
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personal confidence necessary to buck the
majority and take an unpopular position.
Though it often appears contrary to “logic
or reason,” following NEoWave (or Elliott
Wave) during this phase of a market’s
development generally offers the greatest
possible reward.
Accumulation/Distribution – After
a major top or bottom, a market will
transition into a choppy period (above its
low or below its high). Wave theory can still
be useful at such times, but its usefulness
begins to diminish. Instead, oversold and
overbought indicators tend to be more
useful, allowing you to “trade the range,”
getting in or out at each market oscillation.
The longer the consolidation, the longer
you should institute this strategy.
For example, let’s say you have interest
in the Gold market. In this scenario we’ll
assume Gold recently began rallying from
the $900 level. As one who desires to
accumulate Gold, you patiently watch it
rally to $1,000, which in hindsight enables
you to see the market created an important
and obvious low at $900. That observation
allows you to objectively implement
your accumulation strategy. When Gold
begins to pull-back from the $1,000 level
(noting this level), carefully watch your
indicators for an oversold condition similar
to what occurred near the $900 low. If
that oversold condition occurs when Gold
is around $950, it’s time to buy. If Gold
later exceeds $1,000, you can decide to
liquidate some of your position OR simply
wait for the next “oversold” condition to
pick up even more Gold. This process can
be repeated over and over each time the
market exceeds it prior noted high.
36
Trending (up or down) – As I
discussed in my previous interview,
this market phase can be random and
unpredictable. Here, Wave theory is least
useful. During the Trending phase, it’s best
to do what most people are afraid to do:
buy into market strength. Keep in mind,
strong market trends are not common,
especially those in which you can buy into
a new high or sell into a new low. When
strong market trends happen, they can
yield tremendous return in a very short
period, far outweighing results you might
get from other market phases.
While it’s clear when a market is
trending, a safe, low-risk entry may be
difficult to identify. So, what do you do?
To explain, let’s continue our Gold market
example: Gold bottomed at $900, rallied
to $1,000, then sold off to $950. If the
Accumulation phase has ended, Gold will
next move into an uptrend. This is when
the “scary” buying-into-highs strategy
actually works. In our example, you would
place an order to buy Gold at $1,001; if
activated, your stop would be just below
$950 (say $949). This way, you are “going
with the flow” of the market, letting it
identify your specific entry and stop points
as it progresses. When implemented at
the right time, this strategy produces the
greatest profit in the shortest period.
Today’s challenging U.S. stock
market: What phase is it in?
Which trading strategy should
you use?
After rallying for nearly 2 years off 2009’s
low, the U.S. stock market is now (mid
January 2011) in the top 1/3 of its price
range from the 2007 high. As a result, your
focus should be on “Top-picking.” During
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this period, wave theory works best. Make
sure to wait for structure to complete on
all time frames, starting with the largest
time frame first (this means monthly). As
monthly structure clears and warns a top
is near, drop down to weekly charts and
make sure patterns on that time frame are
close to ending. If that is true, move to
daily wave charts and wait for structure to
end on that time frame. If all is in order,
you are ready to “sell on weakness” with a
stop at the established high OR sell-intostrength with a stop 2-3% above current
prices (this approach requires the market
not rally too much after you get in, so is
a little riskier). Waiting for confirmation,
by selling-into-weakness, is generally a
better idea, but it does reduce future profit
potential.
About the author
Founder of NEoWave Institute, Glenn Neely
is internationally regarded as the premier
Wave analyst. He has devoted more
than 25 years to mastering Wave theory,
stock market predictions, and successful
trading. In 1990, Neely published his
advanced Wave analysis process in his
classic book, Mastering Elliott Wave. In
the following decades, Neely continued to
evolve Wave theory to make it objective,
practical, and consistently accurate. This
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January/February
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39
software tool that is designed to be compatible with the TradeStation Open Platform."
Time Factor
in Points
of Force
P
by Oleksandr Salivon
oint of Force is an
area on the chart,
where
strong
price levels and
significant
time
periods intersect. There is
a great number of tools,
which help to identify
levels, where price can
meet resistance or support.
Congestions of price levels
are much stronger than a
single level, but there are
always few congestions.
How do you know where the
trend will finally reverse?
Here we find importance
of Time Factor. If time for
the move elapsed – price
will start moving in the
opposite direction from the
nearest significant level.
Price methods in
action
Today we will work with
November Wheat chart and
reveal reasons for the price
soar in July. First we find
out that in January-June
2010 price movement was
weak, i.e. price slid to the
new low and than returned
higher that low, while if
it remained below - this
would be an indication of a
strong structure. Only this
would tell us that Wheat
price is about to change
medium-term trend for at
least few months rebound.
To find where the final
bottom might take place add 50% of the previous
range (Figure 1).
Considering the date
of reversal we can take 5
months from January 11
top and one year from June
2, 2009 top. If you take
some time to investigate
reversal dates, you will
find more confirmations of
the early June importance.
Dividing 633 top by 6 you
get 105.5 and final bottom
appeared exactly on 105th
trading day. Buying on June
40
11th or even on June 30th
after classical confirmation,
one should hold until daily
swings showed strength,
consequently
moving
trailing stop under the
swing low or low of the
second day back.
To find where Wheat
will find resistance on the
way up - take 1284 to 473
price range and divide it in
8 parts, adding 1/8th to 473
low we get 574, 676, 777,
879, 980, 1081. Also take
633-473 range and extend
it adding 1, 1.5, 2, 2.5, 3
extensions (Figure 2). In
the Square of 9 - 47 (473)
is 90 degrees from 88
(876) and 473 is 4 cycles
minus 45 degrees from
869. Playing with these
tools you will understand
that congestions around
675, 870 and 960 will be
important. Two of them
worked precisely, should
we wait for 960?
Time is initial factor
for change in trend
But how we would know
that June 9 is a final
bottom and that price will
not stop at 533 or 574. This
question can be answered
only by studying cycles.
No matter how good price
levels and indicators signify
a reversal, if the cycle is
calling for a higher top
or lower bottom - it will
eventually take place in
predetermined time.
Final higher low in the
first week of July before
price
skyrocketed
was
extremely important as
we had synodic JupiterSaturn cycle traveled 45
degrees from Feb 27, 2008
and Saturn proceeded 108
degrees from Apr 29, 2002.
Following
only
price
levels we would close
positions on 574, 675 or
770, but understanding
that this is a major change
for few months you would
hold until see 870, and then
added after rebound.
We see how beautiful
markets are, how amazing
and precise results you can
achieve after researching
market’s own individuality.
Oleksandr Salivon has been
studying the markets for 7
years. He learned all known
methods of market analysis
but was not satisfied
with their accuracy until
discovered precise tools in
the works of W.D. Gann.
He did his own research
in Astronomy and applied
it to the soybean and
wheat markets. He may be
reached at soyb@asalivon.
com.
Suggested reading:
W.D. Gann, Master
Commodities Course
W.D. Gann, Tunnel Thru
The Air
41
NOTES ON DAY TRADING from
“Novy Principles Of Market Flow”
S
by Leonard Novy
ince the advent of electronic
trading, day trading has become
the most sought after and the
most elusive of trading regimens.
There are thousands of systems and
methods that try to capture consistency
of market action only to find that markets
display a wide array of personalities
that defy coincidental meeting points
designated as “the buy” or “the sell” within
the system or method.
This article will attempt to shed some
light on organizing short term trading as
it is viewed from the standpoint of “Novy
Principles of Market Flow.”
42
While there is not enough space in this
brief article to cover the many aspects of
this large body of work there are some
concepts that I would like to share with
the readers in hopes of adding clarity to
what it is that traders do irrespective of
the design of the method or system that
you are using.
In “Novy Principles of Market Flow” day
trades fall into one of two categories.
Scalping and Position Day Trading.
SCALPING
Most methods and systems attempt to
use very short term intraday time frames
for entries and exits while using longer
term intraday time frames as a directional
guide.
Here are some concepts you might
want to consider. I hear traders say that
they want to be scalpers….. “I just want to
catch a few ticks”. There is nothing wrong
with that as long as the term “scalping” is
better defined to a condition in the market
that will allow that to happen.
We at Training For Traders define
“scalping” as trading an impulse or energy
pocket in the direction of the market
flow. For those kinds of trades there
should generally be no draw down. The
expectation should be that the trade is
elected and it moves as planned with very
little hesitation.
In order to arrive at that condition,
short term timing signals should be
moving from the center of the scale (ZMZ
= Zero Momentum Zone) outwards to the
extremes.
Scalping is a technique applied to a
condition in the market flow where energy
and momentum are about to surge. Once
in the trade, the trader can money manage
the flow to clip off quick profits or to turn
a short term trade into longer term winner.
POSITION DAY TRADING
www.TrainingForTraders.com
Leonard Novy
Sign up for Free Critical Interim Updates at www.TrainingForTraders.com
Go to www.GatesOfConfirmation.com for Up Coming Free Webinars
Novy Principles of Market Flow are not a Method or a System.
Use the Natural Flow of the Market to your Advantage
Contact: Leonard Novy at info@trainingfortraders.com.......Ph 760 841 1522 Calls returned Promptly
43
Position day trading is typically for traders
who use Fibonacci Retracements or Pivot
Point Support and Resistance or Line
Drawings, Bollinger Bands or Moving
Average Support and Resistance etc, who
are waiting for the market to hit a target
for an entry in the opposite direction. Most
of the time, these targets will be over run
with emotion.
This means there will be draw down. This
is a developmental area where the market
is running into opposing forces that cause
for a lot of back and forth movement. If
your expectations are that you will need to
place a stop loss that adjusts to the current
volatility to allow for the trade to develop
then you are in the right frame of mind.
If you try to scalp under these conditions
you are likely to lose most of your money.
Scalpers don’t like using big stop losses
and shouldn’t be playing in this arena.
Position day trading is for players who like
Your Personal
Trading Seminar
to trade areas of support and resistance
rather than energy pockets
In Summary: The idea with Scalping is
to find a repeatable and consistent action
that moves the market instantly in the
intended direction with no draw down. It’s
a performance trade and it must perform.
That is the condition.
The idea with Position Day Trading is
that it is developmental in nature and
requires patience along with acceptance
of draw down. The expectation is that
targets will be over run before the turn
comes and one must measure risk relative
to the current volatility. The condition for
Position Day Trading is different than for
Scalping.
For more information on Novy Principles
of Market Flow please contact me at info@
trainingfortraders.com or 760 841 1522
or go to www.trainingfortraders.com
Simple
Secrets
by Jack Winkleman
This is a book put
together
Winkleman
Come to a personal seminar with Jack
Winkleman. You’ll learn state of the art
trading techniques that he developed over
the last 30 years. You’ll see the market like
you never have seen before. The seminar
will help you anticipate directional shifts in
the market giving you significant advantages
in trade. For more information click here.
Seminar Cost is
$4,500
44
by
Mr.
telling
a trader how to use
past harmonic cycles for forecasting future
trends. This book is a picture of the market
since 1920 in Soybeans. As an additional
bonus, it has a track record of the Dow Jones
from 1900. It gives you the key repeating
cycles in the market in both Soybeans and
the Dow Jones. 200 pages. Cost is $90.00
plus S&H. Available from Traders World
800-288-4266. click here
What every trader needs to know
about the astro-trading advantage.
The old man’s advice wasn't given
lightly.
As a veteran trader, he had decades
of experience under his belt.
He was doing his best to counsel a
young man who had decided to
become a trader too.
“When you first start out,” the
mentor said, “you’ll learn a lot about
the companies behind the stocks.
You’ll read balance sheets and
earnings statements, and look for
undervalued equities. But as you
begin to trade, you will discover that
the fundamental approach has a lot
of limitations.
“Then you'll start to explore
technical analysis. You’ll try
different kinds of oscillators,
stochastics, and moving averages,
and in every case, you'll eventually
discover that they don't give you the
trading edge you need.
“If you stick with trading after that,
you’ll probably get to the point
where you take a look at cycles
analysis and Elliott Wave theory,
and you'll start to see patterns in
price charts that you hadn't noticed
before. But after a while, you will
understand that those wave counts
are pretty subjective, and you won't
trust them so much as indicators for
your trading, either.
“If you’re lucky, and if you don’t
lose your trading capital, you’ll hang
around long enough to encounter
Fibonacci ratios, and if you work
with them persistently you will be
amazed at how well they connect
with key market movements. There
is a lot of value in those Fibonacci
numbers, and if you learn to use
them they will add a lot of positive
potential to your trading.
“And maybe then you will stumble
upon the most valuable trading tool
of all, the one that not many traders
are even willing to talk about. That’s
financial astrology. You may hear it
being ridiculed, but you should
definitely take it seriously.
Along the way, I’ve exposed key
market factors most astrologers
ignore and most ordinary traders
have never even heard about—
Transneptunian dynamics, planetary
price indicators, and heliocentric
relationships, among other things.
“Actually, most of the biggest banks
around the world have astrologers
they confidentially consult with
about trading opportunities and
market trends. But of course those
banks never publicize that fact.
Rapid Astro-Trading Mastery
“When you use astrology in your
trading, you’ll start to understand the
way the markets really work. And
then you won’t need to get any more
advice from old fools like me.”
I Was Excited To Hear It
I can’t personally vouch for that
story. I wasn’t on the scene when the
original conversation took place.
But that’s the way it was told to me,
and I have to admit I was really
pleased when I heard it.
You see, astrology is vital for me
and my own trading and analysis.
As you may or may not know, I
focus most of my time on applying
new and proven astro-trading tools
to forecasting and profiting from
trends in the stock market.
I started using astrology more than
40 years ago, and have perfected
astro-trading techniques for the past
23 years—and I still spend at least
10 to 12 hours each week, doing
detailed astrological research and
market back-testing. I also publish
Financial Cycles Weekly newsletter,
create professional astro-trading
tools, and privately coach topperforming astro-traders.
More recently, I’ve had a major
breakthrough in speeding up astrotrading mastery, and I’ve been
helping seasoned traders and
newcomers alike find more
confidence, more profitability, and
more money-making insights. . . all
more rapidly, and perhaps much
sooner than you would expect.
The results have been phenomenal.
And I was just wondering if you
would be as surprised as I’ve been in
discovering what it’s like to enjoy
and profit from an outcome like that.
But whether or not you’re an
experienced trader, if you’re now
thinking about using astrology at all
there are a few absolutely critical
things you need to understand.
In fact, if you don’t consider them,
the markets will eat you alive.
A Gift for You
You’ll find the details in my new
book on “Eight Billionaire
Strategies for Breakthrough Stock
Market Success”.
It has just gone to press, and I’d like
to send you a copy with my
compliments. There’s no cost or
obligation, but you do need to let me
know where to send your copy by
logging on to the book sign-up page
at http://tinyurl.com/traderbook
—Tim Bost
45
46
Introduction to Roger Babson’s
R
by Ron Jaenisch
oger Babson was at the New York
stock exchange on March 14, 1907,
at the request of a friend. The
market had started a drop from a high
of 111 on March 6, 1907 on the way to a
low point of 60. Much of the drop occurred
on March 14. “On that day I actually saw
men’s hair turn gray.” Roger wrote in his
autobiography.
It motivated him to do
a study of stock exchange
transactions
and
what
he referred to as foolish
investments. He came to
the conclusion that the cost
to even thrifty investors was one and a half
billion dollars a year at that time. At that
point he made a life changing decision,
to do something to prevent the losses. It
put him on the path, which resulted in the
founding of Babson Business Statistics,
Babson Business College and the Gravity
Research Foundation.
Prior to Babson graduating from M.I T.
in 1898 he sat in Professor Swains Civil
Engineering class. To make the class more
interesting, Professor Swain used stock
market charts to illustrate the application
of Isaac Newton’s laws – particularly of the
law of action and reaction. Babson used the
exercises learned in the class to develop
his method of analyzing the stock market
and investing, subsequently making his
fortune as a financial advisor and investor.
Roger Babson, himself said that
his interest in gravity started with the
Figure 1
47
childhood drowning of his older sister in
a river near Gloucester, Massachusetts.
In an essay called “Gravity- Our Enemy
No. 1,” he wrote, “She was unable to fight
gravity, which came up and seized her like
a dragon and brought her to the bottom
One of the things he valued throughout
his life was learning about the British
scientist, mathematician, and philosopher,
Isaac Newton. Roger Babson was impressed
by Newton’s discoveries, especially his
third law of motion--”For every action
there is an equal and opposite reaction.” He
intuitively combined Newton’s various laws
of motion, and focused upon the easiest to
explain to the public, which was the third
law of motion. He eventually incorporated
Newton’s theory into many of his personal
and business endeavors. Later in this
article the reader will see how specifically
Newton’s Action Reaction theory is applied
to trading.
Upon graduating in 1898, Roger
knew for certain that he preferred an
alternative career. His father Nathaniel
Babson counseled Roger to find a line of
work that would ensure “repeat” business
indefinitely. After careful consideration,
Roger Babson decided to try the world
of finance and looked for work as an
investment banker. In 1898, Roger began
his business career working for a Boston
investment firm where he learned about
securities, stocks, and bonds. Inquisitive
by nature, Roger Babson soon knew
enough about investments to get himself
fired. Acting in the best interests of his
clients, he had questioned the methods and
prices of his employer and quickly found
himself out of work. Babson subsequently
set up his own business selling bonds at
competitive prices in New York City and
then in Worcester, Massachusetts.
He published his analysis of stocks and
bonds in newsletters and sold subscriptions
to interested banks and investors. In
1904, with an initial investment of $1,200,
Roger and Grace Babson founded Babson’s
Figure 2
48
Figure 3
Statistical Organization, later evolved
into Business Statistics Organization and
then Babson’s Reports, until eventually
it thrived as Babson-United Investment
Reports. Probably due to the Internet and
free stock data, it closed its doors in 2001.
Babson, in his autobiography titled the
last chapter “How $2,000 can become
$831,543 without borrowing a penny”. As
the reader will later in this article, there
are powerful techniques that he developed
that are useful for a technical trader to
achieve and surpass such a goal.
Roger read several books and kept
Brenner’s Prophecies of future ups
and downs in prices as one of his prize
possessions. He found that a particular
quote from the book was important to
remember.
“There is a time in the price of certain
products and commodities, Which if taken
by men at the advance, But if taken on the
Figure 4
49
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Figure 5
decline leads to bankruptcy and ruin.”
It was Brenner’s book and a book
by Henry Hall, How money is made in
securities investments, that Roger Babson
brought with him to an important meeting
with his old friend, Professor Swain. It was
Professor Swain that originally introduced
him to the idea of applying Newton’s third
law of motion to investing.
It was Professor Swain that worked with
Roger Babson to come up with a composite
chart called the Babson chart.
As can be seen in the Babson Chart,
a normal line is drawn through the chart,
Times above this line were thought of as
times of prosperity and times below it were
times of recession or depression. Babson
utilized the charts to forecasts not only
the times of prosperity but the degree and
length of the periods.
Babson wrote in his autobiography,”Our
contribution
to
the
analyzing
and
Figure 6
51
Figure 7
forecasting of business conditions was
in connection of the areas above and
below this Normal line. Other systems
of forecasting considered only the high
and low of the charts, while our studies
considered the areas of the charts.
Based upon Newton’s Law of Action
and Reaction, we assumed that after
a depression area, equal in area to
the preceding area of prosperity, had
developed, another area of prosperity
would be due. In making these studies we
took cognizance primarily of the shape of
the areas.”
The size and shape of next area of
prosperity, which was above the normal
line, was independent of the size and
shape of the prior area that was below the
normal line.
Many scholars have examined the
theory and found it to be flawed. As you
will see in this article, the scholars did not
Figure 8
52
Figure 9
truly understand the concept.
Recent computer based studies of this
theory have led some to the conclusion,
that the area above the normal line is
very useful at forecasting the turning
points in the area below the normal line.
Furthermore, as will be shown, that the
extremes of the areas above the normal
line can also be forecasted successfully
with a few modifications to the application
to theory.
An example of the application to the
FXI chart above took three steps. First,
using a special protocol the Normal line
was selected and drawn
There after the high pivot point was
selected for drawing an Action line that is
parallel to the Normal line as seen in Chart
B.
Finally the pivot area of the recession
area below the normal line was forecasted
by drawing a Reaction line. The Reaction
Figure 10
53
line is always drawn parallel to the Action
and Normal line. It is the same distance to
the normal line as the action line is.
In the above gold chart the Normal line
was selected using the normal line selection
procedure. There after three action points
were selected. Note that the Action and
Reaction points are equidistant form each
other in relation to the normal line. Note
that when the normal line is down sloping
the action points that are selected are low
points and the reaction points are high
points. The selection of the low action points
from extremes is not universal in the Action
Reaction line calculations processes. What
is also not universal is that in this case the
Action points are equal and opposite to the
reaction from the normal line.
After the protocol has been applied
to selecting the normal line in the above
Semiconductor Index chart. the action
points were selected and the computer
program drew in the reaction lines. Note
that in this case again the normal line is
down sloping, the action points are low
points and the reaction points are typically
high points. The action points are equal
and opposite to the reaction points, when
measured from the normal-center line.
When Alan Andrews drew the Action
Reaction lines by hand, the charts would
look like the June 2010 Gold chart above
and the action lines and reaction lines
would be numbered in order to identify the
pairs of Action and Reaction points easily.
It is well known that Roger Babson used
Action Reaction theory for indices. Above
is a chart of a stock where the Action
Reaction lines are drawn. The Action point
is equal and opposite to the reaction point
when measured from the center or normal
line. The prior three examples utilized a
54
peak to low line for the normal line, this
is the appropriate line in over 5% of all
charts.
Roger Babson researched the application
of Newton’s third law of motion and used
it to forecast important turns in the stock
market. Speaking at the Annual National
Business Conference on September 5,
1929 Roger Babson observed, “Sooner
or later a crash is coming, and it may be
terrific”. JK Gailbraith records: “Babson
was not a man who inspired confidence
as a prophet in the manner of Irving
Fisher or the Harvard Economic Society.
As an educator, philosopher, theologian,
statistician, forecaster and friend of the
law of gravity he has sometimes been
thought to have spread himself too thin.
The methods by which he reached his
conclusions were a problem. They involved
a hocus pocus of lines and areas on a
chart. Intuition and even mysticism played
a part. Those who employed rational,
objective and scientific methods failed to
foretell the crash. In these matters, as so
often in our culture, it is far, far better to
be wrong in a respectable way than to be
right for the wrong reasons. Wall St was
not at a loss as what to do about Babson.
It promptly and soundly denounced him.”
Perhaps one of the reasons that Roger
Babson was denounced by JK Gailbraith,
was that his theory seemed to simplistic to
those that did not understand it completely.
They would have learned that applying the
theory was a complex process.
Since Mr. Babson probably did not want
to confuse his audience he did not give
the details to the general public about his
forecasting methods, which as you can see
in the above chart forecasted the low in
the SPX after the market made a massive
drop due to the events of September 11,
The Author, Ron Jaenisch is a high
performance psychologist, and has spent
2001.
Comments made by JK Gailbraith years studying the techniques, much of
indicated that, Roger Babsons forecasting which was with Dr. Alan Hall Andrews in
methods were far more complex than the Miami. Ron has a library of over 900 pages of
public was led to believe. Those that came to the writings of Professor Andrews, referred
the Gravity Research Foundation meetings to as the lost cache of Andrews writing.
such as Alan Andrews, Igor Sigorsky and The documents are full of rich details on
Clarence Birdseye were privileged to the the day to day use of the Action Reaction
Techniques, how they were
details.
applied in real time to
Alan Andrews taught
generate substantial profits
some of the Action Reaction
and various techniques that
trading concepts to the
Alan Andrews only told to a
public in his “Action/Reaction
select few.
Course” that he offered after
This
treasure
of
he retired as a Professor
documents gave Ron a
of Civil Engineering at the
unique opportunity to apply
University of Miami. In
NLP in order to model the
private sessions and writings
extremely successful trading
recently discovered (often
periods of Dr. Andrews in
referred to as the hidden
the 1960’s and early 1970’s.
cache of Andrews writings),
During this time Andrews
he revealed the many rules
would send out exact trading
as well as something he
directions on Friday for the
called the “Ore rule”. It is
Figure 11
next week via U. S. mail.
a
mathematical
formula
that Professor Andrews recommended for During a 6-month demonstration period
the selection of the Normal lines for high Andrews was able to turn $5,000 into
$50,000 trading futures while giving his
probability trades.
When it comes to Normal lines, there are students orders ahead of time via mail.
a wide variety of types of lines that may be
drawn and important rules as to which one Ron Jaenisch, lives in the USA and his email
to use under varying market conditions. In address is RonJaenisch@hotmail.com.
addition there are rule sets to determine His website is www.Andrewscourse.com
the selection of Action points, which are where the Updated Advanced Andrews
used to determine the Reaction points. Course (with manuals and videos) can be
With the advent of computer technology ordered as well as a leather bound copy of
the rule sets are very easy to implement.
the hidden cache Andrews techniques.
There is so much more to understand
prior to using the techniques for trading.
This leaves lots of material for future
articles.
55
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56
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Minimizing Financial Risk
in a Changing Investment
Environment
By Steve Selengut
M
ost investors incorrectly think
of “risk” as the possibility that
the market value of a financial
asset might fall below the
amount that he or she has invested in the
asset. OMG, how could this be happening!
Think about it. The harboring of these
misconceptions (that lower market price
= loss or bad and/or that higher market
price = profit or good) is the greatest
risk creator of all. It invariably causes
inappropriate actions within the large
mass of individuals who are uninitiated in
the ways of the investment gods.
Risk is the reality of financial assets
and financial markets: the current value
of all securities will change, from “real”
property through time-restrained futures
speculations. Anything that is “marketable”
is subject to changes in market value. It is
as the gods intended, and portfolios can
be designed so that it just doesn’t matter
quite so much as you’ve been brainwashed
into thinking.
What is abnormal is the hype surrounding
market value changes and the hysteria
such hype causes among investors. No way
should a weak real estate market translate
into near zero bank balance sheet entries
--- it just doesn’t compute, except when it
is popular politics.
Similarly, the reality of financial-impact
cycles (market, interest rate, economy,
industry, etc.) just doesn’t fit at all into
the hindsightful, but popular and generally
accepted, calendar year assessment
mechanisms. Brainwashing again.
The amount, cause, frequency, range,
and duration of market value change will
always vary in an “I-don’t-care-who-youlisten-to” unpredictably certain way --- the
certainty being that the change in market
values of investment assets is inevitable,
unpredictable, and essential to long term
investment success.
Without these natural changes, there
would be no hope of gain, no chance of
buying low and selling higher. No risk, no
profits, and no excitement--- boring!
The first steps in risk minimization
are cerebral, and involve developing
an understanding of the fundamental
economic purpose of the two basic classes
of investment securities.
From the investors’ perspective: (a)
equity securities are expected to produce
growth in the form of realized capital gains,
and (b) income securities are expected
to produce spendable (or reinvestable)
income. But it isn’t real growth until it’s
realized, or real income until it’s received.
57
Alternative investments? These are
the contracts, gimmicks, commodities,
hedges, and other creative ideas that
college textbooks used to call speculations.
Once upon a time, fiduciaries, trustees,
and unsophisticated individuals weren’t
allowed to use them. The stigma is gone,
but the artificial demand adds risk to all
markets.
They are especially risky for the millions
of 401(k) and IRA investors who probably
cannot explain the difference between
stocks and bonds, from any perspective.
Most investors have virtually no clue what
is actually being done inside the products
they select, and have even less of an
interest in learning about it. They dance
knee-jerk style to the daily media buzz.
Wall Street knows this, and takes
advantage of it mercilessly. In spite of
the recent financial crisis, pension plan
fiduciaries (particularly in the public sector,
go figure) are falling all over themselves to
throw money at the very alternative and
derivative speculations that crashed the
market just months ago.
401(k) participants are force fed
products du jour from self-serving
providor menus that make little effort to
identify risk, much less minimize it. Very
few plans allow participants to develop an
understanding of their investment choices
with the only education provided by the
product vendors themselves.
What ever happened to stocks and
bonds, the building blocks of capitalism? Do
investors recognize the financial interest
they have in the very corporations their
elected officials are encouraged to tax,
constrain, and regulate into competitive
mediocrity?
Another mental step in risk minimization
58
is education. You just can’t afford to put
money into things you don’t understand,
or which the salesman can’t explain to
you in ordinary English, Spanish, French,
whatever.
Of course you would prefer to skip this
step and jump right into some new product
athletic shoes that will hurdle you over the
work and directly into the profits. How’s
that been working out for you? It was once
written (somewhere): no work, no reward.
Risk is compounded by ignorance,
multiplied by gimmickry, and exacerbated
by emotion. It is halved with education,
ameliorated
with
cost-based
asset
allocation, and managed with disciplined:
selection quality, diversification, and
income rules--- The QDI.
Real financial risk in equities boils
down to: the possibility that a company’s
stock (that 30% share of your brother-inlaws’ pizza parlor) will become worthless
as management succumbs to economic
forces, and/or mandated costs imposed
by outside entities whose edicts must be
complied with.
In debt-based securities, risk is: the
possibility that the issuer of an interest
bearing IOU (the money your spouse
loaned her brother at 6% to start flinging
pizza) stops or falls behind on its payment
obligations and/or declares bankruptcy
and wipes out both owner (shareholder)
and creditor (bond holder) interests.
Here’s an interesting risk in the
securities markets, one that governments
have cleverly refused to address for
fairly obvious reasons. The “Masters of
the Universe” routinely get paid obscene
amounts of compensation for risking OPM
(other people’s money) perhaps a bit too
cavalierly.
Company fails, shareholder interests
become valueless, debt obligations are
worthless, while the fat cats keep raking it
in, even suing to preserve their bonuses.
Boardroom corruption, and direct lobbying
(another euphemism, for bribing) of
elected officials are two additional risks
that investors need to be aware of.
Most people enter the investment arena
thinking that “Risk” is a board game they
played in college. Today, I would guess
that the majority of investors have never
owned an individual share of common
stock or a Municipal Bond.
The popularity of investment products
has heightened the risk for all investors
and has indirectly led to many of the policy
errors that threaten both capitalism and
the economic fabric of America. Market
prices are increasingly and inappropriately
influenced by decision-making based only
on the derivatives that contain them.
Few people consider the investment
risk associated with public policy decisions.
Product investors and derivative speculators
participate in less personal markets, where
it is more difficult to connect the dots
between their personal financial interests
and their political alignments.
So in a very real sense, investors
have to deal with public policy risk every
bit as much as they need to analyze the
risks associated with the securities and
other financial products they hold in their
portfolios --- complicated, but it is doable.
Apart form these important peripheral
considerations, the risk of loss in any equity
investment is generally greater than the
risk of loss in any debt related instrument.
The potential reward from each type is
just the opposite, and that’s where all the
excitement begins.
Do we risk more for the chance of a
greater return, or do we risk less and
try to preserve our investment capital?
Keeping in mind that investment capital is
a measure of cost, not of market value,
and that the only real loss is a realized
loss.
Typically, the older the investor, the
more boring or income focused the portfolio
should be --- minimizing the overall level
of risk. But it’s difficult to actively minimize
or manage your risk in the “open end”
mutual fund or passively managed ETF
marketplaces.
Risk
minimization
requires
the
identification of what’s inside a portfolio.
Risk control requires decision-making by
the owner of the investment assets. Risk
management requires a selection process
from a universe of securities that meet a
known set of qualitative standards.
Product owners assume the added “fear
and greed” risk of the general population,
while their fund mangers stand aside and
mumble about the opportunities lost in
either direction.
Without a risk sensitive menu to
select from, 401(k) participants need to
minimize risk by: (a) avoiding the poor
diversification that may be a requirement
of their plan, and (b) developing outside
income portfolios with any investable
income above the employer matching
contribution.
The
first
and
most
important
management action focused on risk
minimization in any “program” is the
development of an asset allocation plan.
The plan separates “liquid” investment
assets into two buckets (Equity and
Income) based on cost, not market value.
No portfolio should have less than 30% in
59
The Market Cycle Investment Management Methodology (MCIM)
Steven R. Selengut
Most investors, and many investment
professionals, choose their securities, run their
portfolios, and base their decisions on the
emotional energy they pick up on the Internet,
in media sound bytes, and through the product
offerings of Wall Street institutional boiler rooms.
They move cyclically from fear to greed and back
again, most often gyrating in precisely the wrong
direction, at or near precisely the wrong time.
The MCIM methodology combines risk
minimization, asset allocation, equity trading,
investment grade value stock investing, and
base income generation in an environment
whose time frame recognizes and embraces the
reality of cycles. It attempts to take advantage
of widespread "fear and greed" decision-making
by others, by using a disciplined, patient, and
common sense methodology.
This methodology embraces the cyclical
nature of markets, interest rates, and economies
--- and the political, social, and natural events
that can trigger changes in cyclical direction.
Little weight is given either to the short-term
movement of indices and averages, or to the
idea that the calendar year is the playing field for
the investment "game".
Interestingly, the cycles themselves seem
to concur with the irrelevance of calendar year
analysis, and it makes little sense at all to think
of investing as a competitive event. What index
or average comes even close in content to your
unique portfolio of securities?
The MCIM methodology is not a market timing
device in any sense of the word, but its disciplines
will force managers to add equities to portfolios
more during corrections and to take profits
enthusiastically during rallies. As a natural (and
planned) effect, portfolio "smart cash" levels will
increase during upward cycles, and decrease as
buying opportunities increase during downward
cycles. (See the "Process" Chart)
Absolutely no attempt is made to pick
bottoms or tops, and strict rules apply to
both buying and selling
disciplines. NOTE: these
rules are covered in minute
detail in “The Brainwashing
of the American Investor”
(click on the book on the
left to order the book from
Amazon.
Take the opportunity to
come to the Kiawah Golf
Investment
Seminars
for more information click
here.
60
the income bucket --- no ifs, ands, or buts.
And no investment plan should be
developed “tax” or “cost” first. Risk
minimization comes first, and then tax
minimization if possible. Finally, transaction
cost minimization can be considered if you
are qualified to run your program yourself.
A cost based asset allocation approach
(Working Capital Model) assures growing
levels of “base income” throughout the
portfolio
development
process
and,
possibly, into retirement. Income growth,
by the way, is the only real hedge against
that other economic risk, inflation --- a
buying power problem that has nothing to
do with the market value of the income
producing assets.
Minimizing investment risk is done
best through the use of disciplined sets of
rules for the various operations involved in
managing a portfolio. Strict rules need to
be developed for security selection, three
types of diversification, income production,
and for profit taking.
Forget the Wall Street “I-can-fix-that”
product menagerie. We’re not interested
in massaging our market value to take the
sting out of cyclical market value changes.
Our plan is to take advantage of these
changes as they unwind around us over
time, and when they occur unexpectedly,
causing
short-term
disruptions
and
dislocations.
In the securities markets (stocks
and bonds), the real risk of loss can be
minimized without products and futures
speculations, without commodities and
hedge funds, and without the ageda that
most people experience throughout their
investment lifetimes.
The old fashioned principles of investing:
Quality, Diversification, and Income, plus
disciplined, targeted, Profit Taking are the
only hedges an investment portfolio needs
to assure long-term success. Conveniently,
the QDI+PT applies equally well to both
classes of investment securities.
“Q” is for quality. If you study the longterm behavior of Investment Grade Value
Stocks, and high quality income CEFs,
you’ll discover that they hedge themselves
quite effectively.
Risk is wrung out of portfolios by
investing only in S & P, B+ or better rated,
dividend paying, and historically profitable
companies and then only when their equity
prices are well below their 52-week highs.
“D” is for diversification. Absolutely
never allow any position in your portfolio
to exceed 5% of total portfolio working
capital (i.e., the total cost basis) and never
start a position anywhere near maximum
exposure. You want to be able to buy more
at lower prices.
Similar diversification rules apply to
industry exposure and global diversification
through the use of the mainly world class
companies in the investment grade quality
categories.
“I” is for income. Own no security
that does not pay regular, dependable,
dividends or interest. Regular and growing
dividends are a quality indicator in equities.
In the income “bucket”, seek out above
average yields while avoiding those that
seem either too high or two low.
Managed closed end funds do it best
and provide easy “PT” and “buy more”
opportunities. Buy established CEFs with
long term “income” (not ROC) payment
records.
“PT” is for profit taking. Absolutely
always smile and take your profits willingly,
net/net 7% to 10% (dependent upon
61
available reinvestment possibilities and
security class), and never, ever, look back.
Trading this same body of securities,
again and again, has been shown to sustain
growth of capital and income consistently
in a relatively low risk environment.
Market Cycle Investment
Management With Ten Time
Tested Risk Minimizers
In the recent financial crisis, a very small
percentage of (I bought my house to live
in) homeowners stopped paying on their
mortgages. Still, the hysteria over the
bursting housing bubble (i.e., lower market
values) led to financial institution road-kill
because of ridiculous accounting rules.
When the dot-come bubble destroyed
“new economy” gladiators in a gory
spectacle destined to repeat itself over
time, what investment portfolios cheered
unscathed from the coliseum bleachers?
If you reduce the amount of betting in
your portfolio (and throw out politicians
who don’t have a clue about the workings
of free markets) you can safely navigate
even the choppiest seas that the market,
interest rate, and economic cycles roll your
way.
The tide-like change of market values
is the normal order of things, and until we
embrace the cyclical nature of markets,
all markets, our disappointment and
disillusionment will continue. Portfolio
market values will reflect where we are
within the various cycles.
Interest rate sensitive securities (all
bonds, government securities, preferred
stocks, and relatively high dividend
equities) vary inversely with interest rate
expectations, most of the time.
Where we are in the interest rate cycle
62
is fairly easy to determine, and you need
to position yourself to take advantage of
the higher rates that will sneak into the
economic formula as the cycle moves
further and further from its recent lows.
How do we prepare for higher interest
rates? By designing the income bucket
of the portfolio so that it refills itself with
at least 30% of total portfolio realized
income, and by owning income generating
securities in a form that is easy to add to.
With a reality-based perspective,
investors appreciate that falling market
values are opportunities to add to portfolios.
Loss taking and cash hording as stop loss
measures for income portfolios is a flawed
strategy from all but one perspective --that of the salesperson.
That seemingly rational form of
attempted
market
timing
reduces
the amount of income available for
reinvestment and living expenses, in an
approach that creates victims of higher
interest rates instead of beneficiaries. You
need to welcome both higher and lower
interest rates, if for no other reason than
that you can’t prevent them.
Don’t mess with the investment gods;
accept the cycles they throw at you; respect
and use them wisely for a better chance
of investment success. Find meaningful
numbers that signal cyclical change and
which chart current positioning. Try the
IGVSI and related Issue Breadth, High vs.
Low, and Bargain Monitor analytics.
Bohicket Creek, in coastal South
Carolina, has tides ranging from four to
seven feet, twice a day, every day --- not
unlike the gyrations of the stock market. If
you are in the ocean at high tide, and stay
too long, you risk walking home shin-deep
63
in Pluff Mud a few hours later.
Boaters run aground by not paying
attention to tides, charts, navigation tools
and their GPSes. Investors get swamped
with information, media noise, breaking
news, politicians, gurus, and derivatives
--- so much so that they can’t see the
oncoming fog banks and tsunamis of
cyclical change.
Most investment mistakes are caused by
basic misunderstandings of the securities
markets and by invalid performance
expectations. Losing money on an
investment may not be the result of an
investment sandbar and not all mistakes
in judgment result in broken propellers.
Errors occur most frequently when
judgment is rocked out of the boat by
emotion, hindsight, and misconceptions
about how securities react to waves of
varying economic, political, and hysterical
circumstances. You are the commander of
your investment fleet. Use these ten riskminimizers as lifeboats:
1. Identify realistic goals that include
time, risk-tolerance, and future income
requirements --- chart your course before
you leave the pier. A well thought out
plan will minimize tacking maneuvers. A
well-captained plan will not need trendy
hardware or exotic rigging.
2. Learn to distinguish between
asset
allocation
and
diversification.
Asset allocation divides the portfolio
between equity and income securities.
Diversification limits the size of individual
holdings in several ways. Both hedge
against the risk of loss. Both are done best
using a cost based approach.
3. Be patient with your plan and
think of it as a long-term voyage to a
specific destination --- change direction
64
infrequently and gradually. There is no
popular index or average that matches
your portfolio, and calendar sub-divisions
have no relationship to market, interest
rate, or economic cycles.
4. Never fall in love with a security.
No reasonable profit, in either class of
security, should ever go unrealized. Profit
targeting must be part of your plan, and
keep in mind that three sevens beats two
tens --- and is much easier to achieve.
5. Prevent “analysis paralysis” from
short-circuiting
your
decision-making
powers. Limit the information you allow
into your course charting process, and
avoid any form of future prediction or bet
covering.
6. Burn, delete, toss-out-the-window
any short cuts or gimmicks that are
supposed to provide instant stock picking
success with minimum effort. Consumers’
obsession with products underlines how
Wall Street has made it impossible for
financial professionals to survive without
them.
Remember:
consumers
buy
products; investors select securities.
7. Attend a workshop on interest rate
expectation (IRE) sensitive securities and
learn to deal with changes in their market
value --- in either direction. Few investors
ever realize the full power of their income
portfolio. Market value changes must be
expected and understood, not reacted to
with fear or greed. Fixed income does not
mean fixed price.
8. Ignore Mother Nature’s evil twin
daughters, speculation and pessimism.
They’ll con you into buying at market peaks
and panicking when prices fall, ignoring
the cyclical opportunities provided by their
Momma. Never buy at all time high prices
and avoid story stocks religiously. Always
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buy slowly when prices fall and sell quickly
when targets are reached.
9. Step away from calendar year,
market value thinking. Most investment
errors involve unrealistic time horizon,
and/or “apples to oranges” performance
comparisons. The get rich slowly path is
a more reliable investment road that Wall
Street has allowed to become overgrown,
if not abandoned.
10. Avoid the cheap, the easy, the
confusing, the most popular, the future
knowing, and the one-size-fits-all. There
are no freebies or sure things on Wall
Street, and the further you stray from
conventional stocks and bonds, the more
risk you are adding to your portfolio.
Compounding
the
problems
that
investors face managing their investments
is the sensationalism that the media
brings to the process. Investing is a
personal project where individual/family
goals and objectives must dictate portfolio
structure, management strategy, and
performance evaluation techniques. It is
not a competitive event.
Do most individual investors have
difficulty minimizing investment risk in
an environment that encourages instant
gratification, supports all forms of
speculation, and gets off on shortsighted
reports, reactions, and achievements?
You bet they do!
Steve Selengut
http://www.sancoservices.com
http://www.kiawahgolfinvestmentseminars.com
Author of: “The Brainwashing of the
American Investor: The Book that Wall
Street Does Not Want YOU to Read”, and “A
Millionaire’s Secret Investment Strategy”
HARMONIC ELLIOTT WAVE
By Ian Copsey
T
here is no doubt Elliott Wave is one
of those techniques that traders
either love or hate. For some
it’s almost a status symbol to be
able to count waves. Others find it just
too hard. I have looked over some online
Elliott Wave forums on an occasional basis
just to have a look at how people discuss
their wave counts. It’s not an infrequent
comment I see when some state “I like
Elliott Wave but it’s like something isn’t
quite right.” Others tend to not adhere
too strictly to the rules and just observe
for 5-wave moves. Looking at leading
Elliotticians’ analyses their counts rarely
any adhered to any relationships…
If you are one of these Elliotticians that
have had these doubts when counting waves
I have news for you… You’re absolutely
right. R.N. Elliott made a misjudgment in
the impulsive wave structure. I am 100%
certain of that.
THE HARMONIC WAVE
STRUCTURE
Given that I believe quite strongly in the use
of natural order ratios in both retracements
and wave projections I have spent a great
deal of time working out which waves were
related. It was through this process that I
thought I noticed a “Special Wave A” move
that Robert Prechter noted in 1986, a
diagonal triangle wave development which is
normally associated with an extended Wave
5 was occasionally seen in a Wave A position.
See Figure 1: Prechter’s Special Wave A
developing in five sets of three-waves
However, what I was facing was a fivewave move that developed in a similar
manner to a diagonal triangle, in which
Waves (i), (iii) and (v) all developed in
three waves and not five… This implied that
any individual five-wave move could only
develop in a Wave A position or in a Wave C
position. In the next higher degree this ABC
sequence actually formed one section of a
Figure 1
Figure 2
67
larger five-wave sequence all constructed of
impulse wave now appears. Note that each
three-waves.
Wave a and Wave c are constructed of five
If
I
attempted
to
apply
Fibonacci
waves as Elliott originally proposed. As
relationships to the standard count that would
opposed to the five wave impulse move
treat these as an example of an extending
in Elliott’s original version that could form
wave everything fell flat. There were no
either a Wave 1, Wave 3, Wave 5, Wave A or
relationships. When I used the three-wave
Wave C the harmonic version can only form
structure for Waves (i), (iii) and (v) then the
Wave A or Wave C.
wave relationships were perfect – and there
was no missing wave at completion.
See Figure 3 A five-wave decline in the
10-minute USDCHF market
As went through my daily ritual of
The chart above displays a 5-wave decline
tapping out various potential waves and
in USDCHF. While at first glance Elliotticians
finding
found
will declare this to be an example of an
myself using this alternative all the time.
extending Wave 3 the key to confirming
The projections and retracements began to
this harmonic structure is through the wave
become consistently accurate. See Figure 2
relationships. Before going on further I
A harmonic impulse wave.
should explain how Fibonacci and harmonic
relationships
I
suddenly
The image displays how the harmonic
ratios actually work.
A decline in the 10-minute GBPUSD market Figure 3
68
APPLICATION OF FIBONCCI
AND HARMONIC RATIOS
I shall not discuss in full how the Fibonacci
sequence was developed, or the ratios, but
merely state the popular retracement ratios
of 38.2%, 50.0% and 61.8%. For projections
161.8% and 261.8% are popular.
In fact, using the same methodology
we can derive a whole range of ratios, both
above and below 100%.
Below zero:
5.6%,
9.0%, 14.6%, 23.6%, 33.3%,
38.2%, 50%, 61.8%, 66.6%, 76.4%,
85.4%, 90.0% 94.4%
Above zero:
161.8%, 261.8%, 423.6%, 685.4%,
1109.0% 1794.4%
The Square Root of Two
The square root of 2, also known as
Pythagoras’ constant, is the positive real
number that, when multiplied by itself, gives
the number 2. Geometrically the square
root of 2 is the length of a diagonal across
a square with sides of one unit of length;
this follows from the Pythagorean theorem.
It was probably the first number known to
be irrational. Its numerical value truncated
to 5 decimal places is: 1.41421
At first I wasn’t quite sure how to use
this until I began to sit down and study wave
relationships and noted that two derivations
of the number frequently occurred: 41.4%
and it’s “opposite” 58.6% being 100 – 41.4.
Alternative Wave
Relationships
From the many hours of research into the
common relationships between waves I
noted those that are generated directly from
both Fibonacci and the square root of two
with trending projections tending to cluster
around certain ratios while corrective ratios
in Wave (c) also had its own clusters.
What I noted was that specifically Wave
(iii) it is possible to take the ratios less than
100% and add them to 100%, 200% and
occasionally 300% and 400% etc. These
generated projections of:
Mostly commonly extensions in Wave (iii)
I find on a very frequent basis are:
176.4%, 185.4%, 194.4%, 223.6%,
261.8%, 276.4%, 285.4% and 295.4%
Mostly commonly extensions in Wave (c)
I find on a very frequent basis are:
85.4%, 95.4%, 100%, 105.6%, 109%,
114.6%, 123.6%, 138.2% and 161.8%
APPLYING WAVE
RELATIONSHIPS TO THE
HARMONIC WAVE STRUCTURE
The key to the harmonic wave structure is
the requirement for all degrees of the wave
structure to develop with relationships that
confirm each other. For example, very clearly
Wave (c) must be related to Wave (a), Wave
(iii) must be related to Wave (i) and the Wave
(c) of Wave (iii) must have the same target
areas. Within the Wave (c) of Wave (iii) the
Wave v must also develop with a ratio that
confirms the same targets as the projection
of Wave (i) and the projection in Wave (c).
This type of harmonious development is key
to confirming the structure.
Now, referring back to the earlier chart
of USDCHF the following relationships were
noted. See Figure 4.
In this example the wave relationships are
exceptionally accurate. It is very important
to note how the internal ABC relationships
confirm the projections of Waves –i- through
Wave –v-. In addition, while not shown the
end of Wave (c) at 1.0434 should also be a
close relationship with that of Wave (a).
69
Implications in Wave
Relationships
Wave (iv) should be related to Wave (iii)
Wave (v) should be related to a ratio
As has been mentioned on several occasions
of the beginning of Wave (i) to the end of
the basis quoted by leading Elliott Wave
Wave (iii)
followers is that market movements follow
Within Wave (v) Wave c should be related
natural ratios and therefore the sequence
to Wave a and match the target in Wave (v)
of waves in a structure should reflect this
When these are applied to the harmonic
principle
of
relationships.
However,
the
current structure fails to adhere to these
beauty…
for the most part. The Harmonic Wave
Let me finish this brief explanation with
structure requires there to be natural wave
an example of how Elliott’s structure can
relationships:
mislead. See Figure 5.
Wave c in Wave (i) should be related to
Wave a
70
wave structure it can become a thing of
A decline in the 10-minute GBPUSD
market
Wave (ii) should be related to Wave (i)
The charts both display a decline in the
Wave (iii) should be related to Wave (i)
hourly GBPUSD market. The upper chart
Within Wave (iii) Wave c should be
has been labeled with what is a logical
related to Wave a and match the target in
wave count under Elliott’s description of the
Wave (iii)
wave structure. This appears to decline in
a complex five-wave move in which Wave
relationships and this generated the second
(3) has a double extension. Apart from the
problem of being able to forecast where
correction in Wave (2) all the swing highs
price should stall.
and swing lows are declining confirming
The lower chart labels this completely
a bearish move. This decline followed a
differently as a three-wave decline. There will
previous move lower and therefore the
be many Elliott Wave practitioners that will
implication is for another five-wave decline.
question this but the evidence for the count
The decline in Wave (1) does follow
come through the wave relationships which
Elliott’s structure of five waves with Wave
in this case provide exceptionally accurate
3 being the longest and providing the main
ratios that provided me with a much easier
thrust of the decline. The correction in Wave
call for a reversal higher.
(2) appears normal and this is followed by a
See Figure 6 and 7.
Wave (3) which has extended twice. Wave
The table to the left displays the wave
-2- is an expanded flat with the rest of the
relationships implied by Elliott’s original wave
decline developing normally.
structure. As can be seen there is a mixture
The problems I habitually encountered
of wave relationships. While there are some
with Elliott’s structural development were
that have the normal wave relationships I
twofold.
waves
look for, within a reasonable deviation, I have
wave
highlighted those which really would have
frequently
Firstly
these
lacked
any
extended
consistent
Figure 5
4
71
posed serious issues in forecasting. Indeed,
(v) of Wave (C) was only 4 points while the
there would be no real way to accurately
projection in Wave (C) was 1 point away
anticipate the end of the waves.
from the exact 161.8% projection of Wave
It was this type of imprecision that I
(A).
found difficult to accept. On many occasions
From that 1.5503 low price raced higher
the failure to be able to identify turns within
in apparent defiance of Elliott’s structure.
a reasonable margin saw reversals much
However, it was an easy call for me to make…
earlier and left me in no-man’s land wondering
where each Wave 1 would stall was a hit-
THE HARMONIC WAVE
STRUCTURE IN OTHER
MARKETS
or-miss affair and then everything became
So far I have given examples in the Forex
much more problematic.
market in which I have worked for most of
whether a correction was being seen and not
a reversal. Anticipating extended waves and
The table below displays the relationships
my 28 years in markets. I had always found
in the harmonic wave structure. The clarity
forecasting other markets a lot tougher.
of the wave relationships stand out from the
However, the harmonic wave structure has
first five-wave decline in Wave (A). Every
changed this and provides further evidence
single relationship is common for its own
that it reflects the correct impulsive structure
position, the 198.4% projection in Wave
through all markets. I have made accurate
(iii), the 33.3% retracement in Wave (iv)
forecasts in equity markets and gold to
and the 76.4% projection in Wave (v). The
confirm that the harmonic wave structure is
maximum variance was just 3 points.
applicable to all markets and timeframes.
The correction in Wave (B) developed
as an expanded flat with the pullback being
CONCLUSION
exactly 61.8%. These common relationships
I have been able only to include a limited
continued throughout the entire decline
number of examples in this article but I
even to the end where the extension in Wave
hope sufficient to provide solid evidence
Elliott’s original structure Figure 6
72
Harmonic wave structure Figure 7
that R.N. Elliott did unfortunately make
a
misjudgment
structure,
but
in
the
impulsive
an
understandable
wave
one
given the limited resources in being able to
thoroughly research all wave relationships
without extensive manual calculations.
However, I should add that the harmonic
SUBSCRIPTION
TRADERS WORLD
MAGAZINE Digital
wave structure is not a holy grail and there
is always a strong element of subjectivity
which can occur, specifically when Waves
(i) and (ii) are difficult to identify with any
certainty. However, the requirement for wave
relationships reduces the level of subjectivity
compared to the original structure.
I provide more detailed explanations on
the various implications of the harmonic
wave structure in my book and a greater
number of examples.
There is no doubt in my mind whatsoever
that the harmonic wave structure provides
a stronger framework on wave recognition
and improves the ability to forecast by a
very significant degree.
Ian Copsey
www.harmonic-ewave.com
Ian Copsey is a veteran technician having
begun his career in Foreign Exchange over
28 years ago. He provides his harmonic
daily forecasting report on the Forex
market through www.harmonic-ewave.com.
His book “Integrated Technical Analysis”
has been read by over 4,000 readers
worldwide. His experience ranges from
working in Barclays Bank’s trading rooms
in London and Hong Kong, acting as a
technical analysis specialist for Dow Jones
Telerate in Tokyo where he provided
seminars for bank traders and later as the
regional manager for technical analysis
products in Asia Pacific. He is also an
experienced speaker at seminars. He has
lived in Asia for over 22 years in Hong
Kong, Singapore and Tokyo where he now
lives with his Japanese wife.
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73
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Figure 2 Table Display Items
Figure 1 Position Window
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Figure 3 Portfolio Correlation
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Figure 4 Charts
76
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Figure 6 Market Position Summary
77
Gann and Murrey “sea”
12.50% Rule: 1942 and
1992
Gann and Murrey “see” 12.50% Move
Rule:
Gann 1942 then Murrey 1992
1992: Murrey “sees” 12.50% Rule: +
12.50% = 14.0625% Rule
12.50: = 1/8th (of) 1/8th = 1.40625:
14.0625: 140.625: 1,406.25: 140,625
14,062.50
Music City Money Maker: Murrey Math:
created 1992 Oct 09 Nashville 37215
Perfect Pitch Harmony “loses” 1/8
(of) 1/8th = 1/64th 3.125 minutes (after)
“Tuned”
Dow 30 Index 1/64th = 156.25 exact
Murrey Math Spread for (intraday) trading
1.5625: 156.25: 1,562.50 by 3/8th =
37.50% = 4,687.50 x 3 = 14,062.50
1/64th = 1.5625: 15.625: 156.25:
1,562.50: 15,625: 156,250
1.5625 x 3 = 4.6875: 46.875: 468.75:
4,687.50
1.5625 x 9 = 14.0625: 140.625:
1,406.25: 14,062.50
th
12,500 by 1/8th = 1,562.50 x 3 (3/8th)
= 4,687.50 Run x 3 = 14,062.50
1,250 by 1/8th = 156.25 Yrs = Mayan:
El Nino” Time x 3 = 468.75 Yr Cycle
T. Henning Murrey created 1992 – ’93
the world’s (only) 100% Harmonic 17
Octaves Trading Platform where all markets
78
want to run to 37.50% or 62.50% exact:
starting with Murrey’s Binary Algorithm:
MBA: .00152587890625 doubled out 17,
18 or 19 times will give you every (exact)
future reverse for any and all markets set
to Base Ten.
If you believe all market reverses to be
random, you can’t imagine one number
will “present” you with every (exact) future
price off M’$pie = 3.125.
Wall Street Experts and “local”
experts are (not) allowed to tell you:
there are no random market reverses
when you set all markets to: MMTS
1900 Oct (09 to 11) S&P 100
Index
at
140.625
+
703.125
=
843.75
highs
03.24.2000
1990 Oct 09 Gold at 250.00 + 1,000 =
1,250 + 1/8th = 156.25 = 1,406.25
1990
Oct
09
Crude
Oil
at
40.625
+
100
=
140.625
1990 Oct 09 Dow 30 Index at 2,500 + 10,000
+ 1,562.50 = 14,062.50 on Oct 09 2007
1990
Oct
09
US
30
Yr
Bond
All
Time
Highs
at
140.625
1990
Oct
09
BRK.A
All
Time
Highs
at
140,625.00
1990 Oct 09 S&P 500 Index at 312.50 x
5 = 1,562.50 on 17 Yr. Cycle 2007 Oct 09
Time: 17 Yr Murrey Math Cycle: Start
MURREY MATH SUPPLIES
The MurreyMath Trading Frame software program will
automatically decide for you if a market is Over Bought or
Over Sold, and automatically display the Trading Strategy
whenever the Daily Price Action
The MurreyMath Trading Frame Software gives:
•
•
•
•
•
•
•
•
•
•
•
•
All Gann Lines (8/8ths)
All Vertical Time Lines
All Squares in Time
Entry Price Points
Overbought/Oversold
Set 5 Circles of Conflict
Parallel Momentum Lines
Set Speed Angles (7)
Set Learning Mode Data
Present “Best Entry Price”
Present Daily Volume differential
Sell 50% of Position Price Points
Full Software Package $1000.00
End-of-Day version includes: One Set of Software, Murrey Math
Book, CD Learning Lessons & EMail Updates
EOD Murrey Math Software $1000
RT Murrey Math Software $2750
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Murrey Math Trading Book $78
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Call 800-288-4266, or 417-886-5180
79
1854 Oct 09: Nashville
Price: M’$pie = 3.125 produces all 17
or (17 x 17) 289 Internal trading Octaves
known
Since 1992 – 1993 and “back tested”
to Crash (of) Oct 1987: Crash Oct 1929:
Oct 2007
Mayan 52 Yr Cycle: 3/8 run 52 x 3 =
156: x 3 = 468 Yr Cycle*
Mayan 520 Yr. Cycle: 52 x 10 = 520 +
1492 Oct 09 Columbus Day = 2012 End*
th
1519 AD The Mayan Culture (already)
knew they would have to “suffer” through
156 x 3 = 468 Yr Cycle (of) torture by
Spanish Plague (of) Religious Ignorance
when one Spanish Moron Leader burned
10,000 math books (of) Mayans in one
day’s hard work.*
*He said: “the Devil made him do it” for
the protection of ignorant Christians who
hate math and can’t memorize Moses’ 365
Sins (days) of the Covenant Year.
Mayan Culture 1519 AD predicted
“suffering” takeover 1562 AD to end Aug
17 1987*
1987 Crash Aug 24 USA Stock Market
by way of World Currency Crash
1519 + 468 “Suffering” Cycle = 1987
Aug 17th World Currency Crash*
Aug 17 1987 Negative Cycle to Aug 17
1992 + Cycle and Dow 30 Index moves up
+ 300%*
5 Yr Cycle
2001 Aug 16 Negative Signal: Twin
Towers: World Turmoil: Sept 11 2001*
2002 Aug 16 Positive Mayan Cycle: USA
stock market moved up + 100%*
80
5 Yr Cycle: 2007 to 2012 End 26,000
Sun Light (across) Milky Way (at) 180
Degrees
2007 Aug 17 End Cycle Turns Negative:
Dow 30 Index 14,000 (near) 14,062.50*
Mayan Indians set USA Central Time:
at 18 x 19 = 342 (almost) (7 x 7 x 7)
wheat Stores*
Phi: .618 so we insert 18.618 x 19.618
= 365.24 Yr Year: Wow: 5th Grade Math*
Murrey’s Birthday: 3.125 Yr Cycle
Oct 09 1997 S&P 100 Index at 468.75
= 843.75 + 3/8th (125 x 3) = 843.75
468.75 + 2/8th (125 x 2) = 718.75 +
15.625 (1/64th) = 734.375 price on 2007
Oct 11
Oct 25 1997 lows at 406.25: to 843.75
= 437.50 = Perfect Pitch
Oct 25 1997 lows at 406.25 to 734.375
on Oct 09 to 11 2007 = 250 (2/8th) =
656.25
+ ½ Note: 62.50 = 718.75 + 1/8th Note
15.625 = 734.375
Murrey’s Birthday 5 Yr Cycle: 2002 to
2007
End Y2K Bear Market Crash (off)
140.625: 1 PE Ratio = “Losers”
End on Oct 09 2002: S&P 100 at
390.625 (up) to 2007 Oct (09 to 11)
390.625 to 734.375 = + 2/8th (125 x
2) = 250 + 390.625 = 640.625 + ½ Note:
62.50 = 703.125: + ¼ Note: 31.25 =
734.375 Close 2007 Oct (09 to 11)
390.625 + ( 7 x 7 x 7) = 343.75 =
734.375
This is a very long article and is continued
on the web at:
www.tradersworld.com/murrey48.pdf
What Really Matters Most
About Markets?
By Jeff Rickerson
exact price of the high/low or the exact
time (day) of the high/low?
Price
is
EVERYTHING
because
everything is contained within the price. All
fundamental news and thousands of pages
of reports, all greed, all fear, all knowledge
is contained within the price for that
market. Price is everything and price is
reality. What do you think REALLY matters
most about markets? ......................
PRICE!
Most traders focus on TIME. Guess
what? Albert Einstein pointed out that
time is just an illusion and that everything
is happening simultaneously (and this is
what quantum physicists also tell us).
Time is an illusion…..price is everything!
However, Einstein also stated that
price is a function of time in his method
of predicting price movement! Yes, he did
discover this and very few traders know
this. For more information see my book
“The Art of The Trade I…Cracking the Code
and Unlocking the Secrets to Trend/Profit”
on page 24 and page 67.
Which would you rather know: the
Think of a price chart as a puzzle with
a million pieces. Eighty percent of that
puzzle is already put together for you and
is right before your eyes in the form of a
daily bar chart. What does the other 20%
of that puzzle look like?
One of the key principles of trading
success is what is called the 80/20 Rule/
Principle.
On page 23 Chapter Two of my book
«The Art of The Trade I (Cracking The Code
& Unlocking the Secrets to Trend/Profit) I
talk about four(4) Key Principles. One of
those Key principles is the rule of 80/20
discovered by Vilfredo Pareto in 1897. The
rule of 80/20 simply states that 20% of
your effort creates 80% of your results. In my NEW book The Art of The Trade
II (The Art & Science of Trading Profits) I
discuss this 80/20 rule and how it applies
to trading. I state that not only does 80/20
mean 20% of your effort creates 80% of
your results but also “both in Time, Energy,
and Money!”
I illustrate this 80/20 principle as
applied to trading as follows:
Suppose you have $1,000 to trade with.
81
How would you trade that $1,000.00? Let›s
theorize two trades. Here are the results
of your two theoretical trades:
Trade #1: $800.00 profit / $200.00
investment = 400% return
Trade #2: $200 profit / $800.00
investment = 25% return
The 80/20 Rule as applied to trading is
very profound. For every dollar invested in
Trade #1 would yield 16 times more profit
than the same dollar invested in Trade
#2! (400 / 25 = 16). Trade #1 was highly
leveraged. Trade #2 was low leveraged.
Putting risk aside for a moment you would
rather have your money invested in Trade
#1. The 80/20 Rule of trading also applies
to maximizing your time. Think about it.
Focusing on the critical trades leverages
your time AND money with results 16
times FASTER!
All that knowledge about the reality
of price is displayed each minute, each
hour, each day in graphic form called a bar
chart. The chart contains the open, high,
low, and close for that time period. So, if
price is what matters most about markets
then what do you think matters most about
PRICE.........
TREND!
What matters most about price is its
TREND! Trend is price repetition over a
given time period (minute, hourly, daily,
weekly etc.). Trend can be precisely
calculated.
If what matters most about markets is
PRICE and what matters most about PRICE
is TREND then what matters most about
82
TREND?........
SYMMETRY!
SYMMETRY of course! To be more
precise exact price/time squared which
leads to perfect trend symmetry. Trend
symmetry is a price/trend that is repeating
in exact price/time flow within an exact
price and time pattern that is as equalized
as possible. It would be like the market
looking into a mirror reflecting itself back
onto itself in a never-ending flow of price
and time. More about this in a moment in
relation to price/time squared.
Ok, so if what matters most about
markets is PRICE and what matters most
about price is TREND and what matters most
about trend is SYMMETRY what matters
most about market symmetry?......
VELOCITY!
It is of course VELOCITY of the price/
trend.
Velocity of a trend is related to the
directional price movement and velocity is
equal to price divided by time. Velocity of
trend increases when price is accelerating
faster than time (large range price
movements). Velocity is decreasing when
time is increasing faster than price (small
range price movements).
Price “Flows” in direction, duration, and
amplitude as the square root of time with
the open, high, low and close charted in
exact proportion to each other relative to
space and time in perfect symmetry!
With the above we can hypothesize the
following:
83
(1) If price and time are EQUALIZED
and ….
(2) There is SYMMETRY between price
and time and….
(3) Price and Time are SQUARED
creating symmetry which
Creates
maximum
buying/selling
pressure within a
small space of price/time then….
(1) + (2) + (3) = High Price Velocity =
Trend = PROFIT!
As price approaches and enters this
point of singularity price, time, velocity,
volatility, and volume become compressed.
When the market/price moves out of this
“compressed” point of singularity price,
time, volume, volatility, and velocity
expand rapidly.
There is a law in physics which says that
water will reach its own level by its own
weight. There is a corresponding law of
market price action which states that price
(ticks; smallest units of price movement)
will reach its own level by its own buying/
selling pressure.
According to the laws of physics,
when enough electrons line up within an
atom to form a position, then all the rest
automatically line up in a similar fashion.
In physics this is called ‘Phase Transition’.
A similar situation happens in markets
when the smallest unit of price (ticks)
form a cluster and when enough of these
price ticks line up (in time) then a “tipping
point” or critical mass occurs and a phase
transition (change in trend) will occur.
This ‘Point of Singularity’ (as described
in my book The Art of The Trade I (Cracking
The Code & Unlocking the Secrets of
Trend/Profit) page 70 is the holy of holies
as far as trading is concerned. ‘The Point
84
of Singularity’ is the Alpha/Omega point in
a market, or the end of one trend and the
beginning of a new trend.
I have been searching for this since
1982 and in great detail since 1998 and
NOW I have discovered the mechanism
that causes this effect (you cannot have
an effect without a cause!). IT Is the
MAGIC (Price) TICK. The MAGIC (Price)
TICK operates on a Quantum physics
property called ‘Entanglement’ where
one tiny packet of energy (in the case of
trading a cluster of price ticks) influences
another. How this relates to trading is the
MAGIC (Price) TICK will influence the next
tick until you hit the “tipping point” (price
clusters that equal those tiny packets of
energy) and a major reversal in price will
occur. This is a remarkable discovery about
the markets.
These principles combined make
up what I call the Market Syntax Code
(a Triangulation of
price, time, and
symmetry).
The most important thing about
MARKET’S is PRICE.
The most important thing about
TRADING is PROFIT.
So, how do you MONETIZE PRICE into
PROFIT?
Proper alignment of price and time with
Symmetry in conjunction with Velocity.
For more information please read my
two books: The Art of The Trade I (Cracking
The Code & Unlocking the Secrets to Trend/
Profit) click here and The Art of The Trade
II (The Art & Science of Trading Profits)”
click here
The Law of Cause and Effect:
Creating a Planetary Price-Time
Map of Market Action
Book Review by Larry Jacobs
W
. D. Gann in 1948 charted the May
1949 Soybean contract in the chart
at the bottom of this page. This chart is
one of Gann’s most
famous charts. It is on
the internet on dozens
of sites and is one of the
most talked about charts
from
this
legendary
trader. Perhaps why this
chart is talked about so
W.D. Gann
much is the fact that
there are some planetary longitude lines
plotted on this chart.
The question that I have and many ask,
did Gann really use astrology to trade the
markets? Some say he did and even that
he hired expert astrologers to help him in
this area. Even in Gann’s reading list of
books, there were many astrology books
recommended.
In Gann’s time, astrology was not
mentioned by professional traders, as it
was considered almost witchcraft. So it is
understandable that Gann did not write
about it in any of his courses, however, in
some of the personal trading letters to of
his customers there were many comments
about astrology.
This second chart with the highlighted
blue, green and red lines is from the
new book “The Law of Cause and Effect:
Creating a Planetary Price-Time Map
of Market Action”, by Italian market
researcher and trader Daniele Prandelli. In
his book Parandelli unravels the mystery
of how to use these
planetary lines on
charts.
There have been
many traders who
have experimented
with using planetary
lines and in fact
several programs
now available that
use these lines.
The Gann Trader by
Peter Pich and the
Market Analyst by
Mathew
Verdouw
are the two most
popular programs.
Very few have been
85
able to document any successful use of
these planetary lines.
Now for the first time Prandelli has
introduced the proper conversion factors
that he felt W.D. Gann used in his trading.
With the unveiling of this information
the author gives traders the price-time
projections that they can use to plot on the
available trading programs just mentioned.
Traders can now have a functional tool for
entry points, projections and exit points.
Using these planetary methods the author
believes that it is no longer necessary
to use and be overwhelmed with the
indecipherable and inconsistent other
computer oscillator tools that traders
have attempted to use over the last few
years such as stochastics, RSI, CCI, etc.
As you have probably found out computer
oscillators are after the fact tools and don’t
really help traders to successfully trade the
markets and may even hinder them. The
author believes that planetary projection
lines, on the other hand, offer the trader
before the event tools to trade with.
In
his
book
Prandelli
illustrated
how
he uses planetary
lines with over
160 charts and
diagrams.
Most
of the charts are
on the S&P 500
index. He also tells
the reader how
to use planetary
lines
on
other
times frames. So
planetary timing
can be used for
day-trading,
86
intermediate and even long term trading.
The author also presents a number of
new cyclic trading tools to help traders pin
point timing along with these planetary
lines. They give the trader a high probability
correlation of price and time and when
to take action on entries and exits of the
market.
The book is recommended to those
traders and researchers who are interested
in finding out what is really about behind
those mysterious planetary lines Gann used
on his chart and how they can be applied
to today’s markets. As an added benefit
purchases of the book will be granted
access to an online research and education
forum providing direct interaction with
Prandelli. They can actually exchange
charts, ask questions and get guidance
directly from Prandelli.
For more information go to:
http://www.sacredscience.com/Prandelli/
LawOfCauseAndEffect.htm
The Gartley Trading Method
By Ross Beck
H
.M. Gartley was a technical analyst
who published his book “Profits
in the Stock Market” in 1935. He
is best known for his Gartley Patterns in
the markets. Ross Beck is the author of
the new book – Gartley Patterns. He is
the recognized authority on the subject of
Gartley Patterns.
In this book Mr.
Beck
explains
how to utilize
the methods of
H.M.
Gartley
to capture the
maximum profits
in the financial
markets.
The
book
is divided into
three parts
1) The first part examines how to
identify and profit from the pattern
formations in the markets.
2)The second part explains the how
the Gartley patterns are much superior
to classical chart patterns and even Elliott
Wave Theory.
3)The third part shows how to apply
Gartley pattern filters to improve the
profitability in entry and exit points.
Mr. Beck basically describes how to setup
your charts so to make sure the basics
are covered. He explains the different
types of charts, computer oscillators and
indicators and where to get your data. He
clearly explains exactly how Gartley and
Elliott Wave are related. How the AB = CD
label and the Elliott Wave ABC correction
are basically the same thing and how to
use the Quadrilateral to calculate price
extensions.
He also explains why the Gartley
Pattern is the most powerful pattern in the
financial market and he convinces you of
that. You’ll see the Gartley patterns in your
chart trading and how easy they are to
recognize. You have actually been trading
Gartley and you did not know it.
In the chapter titled, The Gartley Pattern
Revealed, the author goes into great detail
with many illustrations. He feels that it is
very important that the trader be patient
until the desired move is developed, all
conditions laid down are present, watch for
the minor reaction, which tests the market
and have the courage to get out with a fair
profit or protect the profit with stops.
In the next section the author compares
the Gartley methods with traditional
pattern methods such as double bottoms,
head and shoulders. He explains one of
the best opportunities in trading with
several chart illustrations. He details the
exact Fibonacci ratios to use in the Gartly
pattern and how it fits into the Gann box.
Finanally now that you know the
Gartley pattern he explains entry and
exit strategies and how they depend on
your particular style. He gives several
types of entries such as Fibonacci, 1-Bar
Reversal, Candlestick, and the Technical
Indicator Entry method. He explains his
exit strategies such as the 3-bar trailing
stop and how to trade multiple contracts,
scaling in and out, calculating targets, etc.
Then he goes into several case studies
87
that explains some of the strategies in the
book. In these cases he shows examples
of volume, quadrilateral price extensions,
quadrilateral clustering, 78.6 percent Fib
entry method and profit stop levels set,
profit targets, trailing stops. Finally he
discusses the importance of the trading
plan and how you can stick to it.
At the end of the book the author
explains Gann’s Mysterious Emblem. After
uses angles, circles, squares and triangles
relating to Gartley he felt that the Gann
Emblem fit perfectly into his XABCD Gartley
pattern. He explains how to use the Gann
Emblem with several chart illustrations.
Finally he gives you one more filter for
Gartly Trades, the Wolfe Wave. It is used
to identify the D point of a Gartley pattern.
There are many illustrations to explain this
pattern. For an video display click this link.
http://www.youtube.com/
watch?v=98CVJQrcH2I
This book is designed and trader or
researcher interested in geometric trading.
The author does an excellent job explaining
the geometry of Gartley and combine that
with his complete trading strategy and a
book written with simplicity and clarity, and
you have a winning book. So if you want
a complete package with details about the
Gartley pattern this is the book for you.
Ross Beck, FCSI can be reached at www.
geometrictrading.com The Market-Analyst
has a Beck plug-in for many of the tool
the author uses in his trading. It includes:
Figure 1 Beck’s Emblem
88
15
6
TRADERSWORLD.COM Late Fall 2008 / Early Winter 2009
61
89
17-Year Cycle & Interest Rates
November 2010 Ushers in
Major Transition Period
By Eric S. Hadik
S
ince early-2007, I have discussed
the 17-Year Cycle and its impact
on everything from earthquakes &
volcanoes to stock market crashes & real
estate debacles to currency meltdowns &
commodity cycles. Many of the projections
made in 2007 have already reached
fruition…
The Stock Market did drop 35--50% in
1-2 years (similar to what it did 34 years
prior… and 34 years before that… and 34
years before that… and 34 years before
that).
Real estate did turn out to be a bubble
that is still losing air.
Commodities did see another surge
from
late-2008/early-2009
into
the
present (though late-2010 into early-2011
pinpoints diverse cycle highs in many of
these markets, including Gold & Silver).
Major earthquakes did strike targeted
areas like Chile and/or South America
(as they did 17 years ago… and 17 years
before that… and 17 years before that…
and 17 years before that… all the way back
to before the mid-1800’s).
However, there are some markets that
have a similar 17-Year Cycle… but on a
delayed basis.
In these cases, the initial 17-Year Cycle
chart 1
90
‘action’ - like the stock market meltdown
of 2007--2009 - creates a ‘reaction’ in
other markets, like interest rate futures.
The plummeting price of stocks forces a
mass stampede - more euphemistically
recognized as a ‘flight to quality’ - into
Treasury Bills, Notes & Bonds. The result
is a type of mania in these markets, which
is often the final 10-20% of a much larger
move or trend.
This manic rally could be the final
blow-off or could be the first major
warning sign of an impending top. This
is where cycles again come into play.
A Trio of 17-Year Cycles
The first phase of this analysis begins with
- and ends with - the ubiquitous, 17-Year
Cycle. In the case of short-term interest
rates, the year 2010 is the culmination of a
trio of 17-Year Cycles - dating back to 1959
- and was expected to usher in a major
bottom in interest rates. See Chart 1
The Fed Funds Rates chart (first
published in November 2009) highlights
the major bottom in 1959, the subsequent
low in 1976 (17 years later; the low that
preceded the 1976--1981 ‘mania’ in actual
interest rates, in response to a ‘mania’
in inflation), and an important bottom in
1993 (17 & 34 years later).
Each one of these projected a major,
17-Year Cycle bottom for 2010, ideally for
late-2010.
Narrowing The Focus…
Also reinforcing this focus is the
corresponding futures peak (interest
rate low) in late-1993 - exactly 17 years
ago. The 4th Quarter of 2010 is exactly
17 years from one of the most important
peaks in 10-Year Notes & 30-Year Bonds of
the past 30 years. In the case of Notes,
the 4th Quarter 1993 peak ushered in the
largest correction of the past 20 years (a
peak that came 7 years from the previous
chart 2
91
one - in 1986 - and a drop in which prices
plummeted for 13 months).
A futures peak in late-2010 would also
come 7 years from the previous one (2003)
and could set the stage for a sharp decline
to follow - perhaps a 13-month decline beginning in November/December 2010.
And, it would come at a time when an
interesting 14-Quarter (approximately 3.5
year) cycle comes into play (the following
chart is of the treasury yields, so the
turning points are the inverse of what is
taking place in Bonds & Notes futures; all
of these charts represent an anticipated
bottom in interest rates and peak in Bonds
& Notes). See Chart 2
Narrowing The Focus A Bit
More…
The most likely time for this expected
peak - in Notes & Bonds futures - is in
November 2010. That is also when a
very consistent 26-month (2 years and 2
months) cycle comes back into play. This
cycle has governed the entire advance of
the past decade.
This 26-Month Cycle created lows in
January 2000, March 2002, May 2004,
July 2006 & October 2008 (1 month
margin of error) and projects a major top
for November 2010. This also resulted
in a corresponding 52-month low-low(high) Cycle Progression - March 2002 low
to July 2006 low to a projected November
2010 high - that has been in focus for
the past 18 months (the accompanying
chart is actually a copy of a chart that was
originally included in the January 2009
INSIIDE Track). See Chart 3
At the very least, a peak in November
2010 should hold for 6-12 months. Its
validity - and holding power - will be
strongly influenced by an important
chart 3
92
indicator - the monthly trend pattern. The
earliest that this indicator could confirm a
major (1-2 year or longer) reversal would
be on January 31, 2011. So, the action of
December & January needs to corroborate
this expectation.
But What About QE2 (and
QE3… QE4…)?
The most frequent question I have
received in recent months - with respect
to this analysis - is something on the lines
of ‘How would this jive with Quantitative
Easing?’ There are multiple responses
to that question (although I do not place
primary focus on fundamentals and do not
expect the fundamental rationale to be
obvious at the point of reversal)…
1 - The markets almost always discount
fundamental events in advance (often
6 months or more before the fact). So,
the Bonds & Notes futures markets should
have already priced in the latest round of
quantitative easing. By the time the Fed
announced this, the futures markets are
already looking ahead and posturing for
‘what’s next?’
2 - Sooner or later, the impact of
commodity price inflation is going to take
its toll. Commodities have been heading
higher for over a decade. Even in the midst
of collapsing real estate, employment
rates, etc., commodity prices have headed
higher. This means that they are nearer to
the point when and where a parabolic rally
will take hold. THAT is when the Fed and
the markets will be forced to sit up and
take notice.
On a 6-12 month basis, commodities
are expected to see culminating surges in
December and initial (3-6 month) peaks
in January 2011… the topic of a separate
discussion. A new bull market is not likely
to take hold until after mid-2011, although
the intervening lows are likely before then
(some as soon as March 2011). So, this
correlation between interest rates and
price inflation will not likely take hold until
chart 4
93
late-2011 or 2012, when the next surge in
commodity prices is more likely.
3 - Dollar weakness is only beneficial
to a certain extent. The Dollar’s demise
has had some redeeming aspects but is
ultimately a bad thing. It has contributed
to the inflationary surge in commodity
prices… but has also helped to support
stocks. However, all my long-term Dollar
cycles point to 2013 as a momentous year
that could see a decisive change in the US
Dollar (and possibly other currencies).
Leading into that year, I expect to
see another Dollar decline - most likely
beginning in July 2011 - that could force
the Fed or Treasury to ultimately defend
the value of the Dollar. Interest rates are
one of the weapons in the arsenal of Dollardefending tactics.
(On a 6-12 month
basis, the Dollar was projected to drop
into November 2010 and then rebound
into May/June 2011. This is still the case,
so do not mix oranges with apples - or
longer-term analysis with intermediate
analysis - when assessing this outlook.)
There is actually a lot more to these interest
rate cycles and the outlook for the coming months
and years. My objective for this discussion is
to again highlight the 17-Year Cycle - that has
been the focus of at least 4 or 5 Trader’s World
articles since mid-2007 (and the focus of dozens
of newsletters and special reports, most of which
can be found on our website - www.insiidetrack.
com) - and to highlight the important transitional
period in November 2010--January 2011.
While the Dollar & Interest Rates were/
are projected to bottom in November, many
other markets are not expected to complete
their 6-12 month trends until January 2011…
94
The January Shift!
While November & December are expected
to subtly usher in this transition, January
2011 could provide more obvious extremes
and reversals. Multi-year, multi-month &
multi-week cycles in Gold & Silver peak in
January 2011. A 3-6 month (potentially a
6-12 month) top is expected at that time.
Stock Index cycles peak in lateDecember and are expected to usher in an
important top IF the Indices have reached
specific, upside price targets. The ‘January
Cycle’ - a technique that helps identify
intra-year extremes and intra-year trends
- will be the ultimate filter for this.
Grains are expected to top in lateDecember or early-January & pull back
into March 2011. This is part of ongoing
projections for a Major bottom in earlyJune 2010 followed by a new, multi-year
bull market (see http://www.insiidetrack.
com/grain_cycles.html for a more detailed
explanation of the cycles and indicators
that forecast this, beginning in late-2009).
Several commodities are entering
decisive periods in December & January.
One that comes to mind is Coffee. Coffee
was projected to set a major low in
early-2009 and then surge into 2011 (see
http://www.insiidetrack.com/coffee_cycles.
html for details). In recent months, it was
expected to rally into November, set an
intermediate peak and pull back, and then
surge to new highs into late-December/
early-January.
Price action in early-December is
validating this and Coffee is poised to
surge into January 5--7, 2011, when a
myriad of short and intermediate cycles
come into play. Its 2-3 year (minimum)
upside target - from the 2009 lows - is at
259.0/KC, a level that could be tested in
December or early-January. However, the
most synergistic convergence of cycles
comes into play in May/June 2011 and
could have a much greater - and farther
reaching - impact on the price of Coffee.
Cocoa is another market that was
forecast to bottom in mid-September,
set a secondary low during the week
of November 15--19th, and then rally
into
January
(possibly
February)
2011.
The evolving analysis - with
corresponding cycles - is available at
http://www.insiidetrack.com/cocoa_cycles.html.
Know Yourself
Astrological Report
Phase II
The point of this is that late-2010/
early-2011 is a momentous period, when
an important shift could take place in many
markets. Some of these ‘shifts’ should
only last for 3-6 months. However, others
- like that in interest rates - should last for
many years to come.
See Chart 4
Looking ahead a little farther, June 2011 is
one of the most critical - and potentially decisive
- interest rate cycles of the next 2-3 years. It is
the culmination of many diverse cycles and could
help corroborate the outlook for a new paradigm
in the financial markets. The accompanying
chart from August 2010 (also a ‘yield’ chart that is
the inverse of the Bonds & Notes futures charts)
gives a small taste of the cycles that come into
play at that time. More specific and detailed
analysis and trading strategies will be available
in our publications.
IT
You need to know when it is favorable
for you to proceed aggressively or is it
time to proceed slowly and cautiously!
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many people as possible as inexpensively as possible. Traders World will have a professional astrology report done for you. The professional report is
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your personal and professional life. You can use
the professional part of the report to develop your
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desired growth in your profession. Problems can
be avoided and transformed into positives through
insight and wise action.
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Trading and can be e-mailed at INSIIDE@
aol.com.
Their website is at www.
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know the time of birth then we need if you were
born in the morning, afternoon, evening, night,
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95
Sync Yourself
into the Market
By Larry Jacobs
using a multiple monitor
trading system. I would
recommend using a three
monitor horizontal system.
This is what I have used for
the past 10-years and it is
wonderful.
What size of
monitors should you
get?
T
o be a successful trader you need to
sync yourself into the market. What
that means is you need to do the
necessary research before you trade. How
does this work. First go back on the long
term monthly and weekly charts. Get the
big picture. Then go down to the daily and
intra charts to get the near-term picture.
Never go against the long term charts
using the short term charts.
Master Traders of the past did not have
computers. They had to plot charts out on
chart paper by hand. This actually gave
them an advantage. They could see the
big picture and the near term picture all
at the same time. W.D. Gann used charts
that were actually on a roll. They were 30
inches tall and continuously on a roll. So
he could plot the long term and short term
trend lines all on the same chart.
Today you can do what the Master
Traders did on their long term paper charts
96
I would recommend 23 or
24 inch size. I would also
recommend a monitor stand
as you can see above in this
article. This keeps the 3 monitors right
next to each other and looks very nice. It
also hides the cables and looks clean. It
makes your office look space age.
Most software like eSignal will expand
charts across all three monitors. So
therefore you can view long term charts
expanded across three monitors. This
gives you the big and the short term
picture. Three big monitors give you a 60inch horizontal view.
You will also need a multiple monitor
computer. The Sonata Trading Computer is
the best as it has several advantages over
conventional desktops. First it is totally
silent so you can think without noise. It is
powerful using the latest Intel CPUs. It can
display up to 12 monitors. It is upgradeable
every 2-3 years for usually 50% less than
the original price.
go to: www.sonatatradingcomputers.com
Trading Book
Best Sellers
Understanding Gaps
Price by Scott
Andrews $24.95 Buy
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trading related literature…and to provide a
source of additional information as well as
a listing of other sources and articles from
which the reader may learn more about
the topic covered.
Stock Patterns for
Day Trading by
Barry Rudd $93.00
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This book describes the
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herein represents one of the first fullfledged books of instruction on short
term, swing, and day trading in individual
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described in detail. He uses the setups
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The Opening Price
Principle by Larry
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There is an amazingly
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Stop and Make Money
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Acclaimed stock market
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weeks. But unlike similar approaches, it
97
does not require constant monitoring of
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With the right approach,
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to generate annual returns of about 30%.
Winning Chart
Patterns: 7 Patterns
That Really Work
by Edward Downs
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Pinpoint high probability
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trade. You’ll discover … -7 Chart patterns
indispensable to profitable trading -Why
establishing a timeframe is essential for
correct chart interpretation -Differences
between measuring and exhaustion gaps
- and putting them to work for you -Using
Fibonacci analysis to trail your stops - and
lock in your profits -The distinction between
Volume Climax and Volume Trend – and
how each should be traded. PLUS – using
the MACD, risk/reward ratio, research,
professional commendations, and more!
Ed’s reputation - and personal success –
98
are built upon his conviction that “charts
are where it’s at.” Now, every trader can
benefit from his experience, when you add
this powerful new video course to your
trading library. Comes with Online Support
Manual
Intra-Day Trading
Tactics Course Book
by Greg Capra
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Short-term traders have
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Now Greg Capra shares
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an array of indicators creating a single -profitable -- trading protocol that will be
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See him guide you through his methodical
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his
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Watch and read as Capra drives home
the following critical points: -- The three
foundational forms of intra-day trading -The psychological demands you’ll need to
know to win big -- The need to define your
financial plan; building wealth or gaining
income -- The importance of mastering
charts- 5 and 15 minute patterns -- The
all-critical “tick indicator”— how to master
it as a key timing tool These are but a few
of the points that Capra outlines in this
comprehensive learning set. Use the book
and online video to develop a working,
hands-on knowledge of moving averages,
risk limits through relative strength
analysis, and targets that will position you
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This course will give you everything you
need to achieve intra-day trading mastery.
Seven Set-ups that
Consistently Make
Money by Jeff
Cooper $129.00
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A reliable trading set-up
can be worth a fortune
in winning trades. In
this new DVD course,
Jeff Cooper, author of the bestselling Hit
and Run books, hands over his seven
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With great detail, this course provides an
explanation of each set-up and examples
of the money making power in action.
You will: -See how the symmetry of the
market reveals the moves that are about
to happen, and gives you the information
to predict how big the move will be -Learn
how to recognize expansion patterns and
contraction patterns and use them to
take more wins out of the market -Find
out which moving averages allow you to
recognize a volatility pendulum -- a set-up
that produces some of the most explosive
moves -Watch as the pieces of set-ups, like
first turndowns and first pullbacks, come
together to show both sharp upswings and
quick drops before they happen You won’t
get any hypothetical theory in this course,
just real set-ups from a real trader that will
position you to make real money—again
and again. Plus, Cooper walks you through
his approach to using moving averages
that has allowed him to make his living
trading. This collection of tactics balances
the homerun big gain set-ups with the
consistent, reliable set-ups to give you
options that will work in a wide variety of
market conditions. These proven technical
patterns and powerful understanding of
market behavior are ready to work for you.
Finding Profits in
Forex: Combining
Elliott Wave and
Fibonacci to Pinpoint
Winning Trades by
Gordon Todd $98.00
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Traders in the know
realize that there is a
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is going on in the market and what is
actually going on in the market. Looking
at the market through the lens of Elliott
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to see what is really happening—and how
to profit from the market’s moves. Watch
as Forex expert Todd Gordon reveals the
secrets to combining Elliott Wave theory
and Fibonacci ratios to catapult your
trading success. In this new guide, Todd
breaks down these trading tactics, giving
clear explanations and real life examples
to help pull it all together. Elliott Wave and
Fibonacci are tools that have been used
for years in isolation; with Todd’s new
strategy, you can combine the strength of
these theories for a powerful view of the
market. Todd will cover: • Basic 5-wave
pattern • Three degrees of trend • Motive
waves, impulse and diagonal triangle •
Corrective waves • Fibonacci retracements,
extensions, and projections ...and how to
combine these tools for maximum profits
in the Forex market.
Plus, Todd reveals the time frames he
analyzes and which trades he executes—
99
Patterns of Gann by
Price: $159.00 Buy Now
By Granville Cooley This set of books
[included within this bound volume] is
not about pulling the trigger. It is not a
system on how to make a million dollars
in the market in the morning. It is about
certain mathematical and astronomical
relationships between numbers and their
possible application to the number of W.
D. Gann.
W.D. Gann in Real-Time
Trading by Larry Jacobs
Price: $69.00 Buy
Now
By Larry Jacobs If you
feel that you would like
to do short term scalping
or swing trading in the
markets, then this book might be for
you. It illustrates many short-term Gann
mathematical trading techniques which
have a high tendency to work intraday.
Various intraday time frames are shown
and how they can be used together to
keep you in the direction of the market.
200 pages
Patterns & Ellipses
Price: $49.95 Buy
Now
By Larry Jacobs Stocks and
futures move in elliptical
paths. When a market
makes a gap, its price
action usually passes into a
new sphere. All its activity will remain in the
current sphere until it moves into another
new sphere. This new book tells you how
to use ellipses along with detailed chart
patterns to determine if a stock or futures
100
contract is bullish or bearish. 100 pages
Pyrapoint
Price: $150.00 Buy
Now
By Don Hall Mr. Hall
discovered a secret from
one of Gann’s associates
“Reno” who shared a
desk with him on the floor
of the Chicago Board of Trade. Apparently
Gann carried a piece of paper with him to
the floor every time he made a successful
recorded trade. Mr. Hall found out what that
paper was and developed the Pyrapoint
trading method around this. An easy to
understand trading software program was
fully developed. It creates a natural trend
channel and areas of both support and
resistance. It’s clearly tells you when the
trend changes. 300 pages.
The Structure of
Stock Prices Using
Geometrical Angles
Price: $49.95 Buy
Now
By Russell M. Sedlar “This
chart based book shows
how
the
Geometrical
Angles described by W.D. Gann, when
used is this newly discovered way, literally
become the controlling force of stock price
fluctuation, causing tops and bottoms to
form and trend lines to be determined.”
Gann Master Charts
Unveiled
Price: $49.95 Buy
Now
By Larry Jacobs Complete
100 page book explaining
how to use Gann’s Master Square of Nine
Chart, The Gann Hexagon Chart and the
Gann Circle Chart. Many articles on the
square of nine are also included from past
issues of Trades World Magazine
The Secret Science
of the Stock Market
Price: $149.95 Buy
Now
By Michael Jenkins In this
book Mr. Jenkins gives a
start to finish ‘scientific’
examination of time and
price forecasting techniques starting
with basic line vectors and advances the
concepts to circles, squares, triangles,
logarithms, music structure and ratio
analysis. These concepts are developed
into a comprehensive method that allows
you to forecast any market with great
accuracy. Mr. Jenkins demonstrates how
a few simple calculations would have
predicted many of the greatest stock
market swings of the past seven years
with accuracy down to the day and price
targets within one point on the market
averages. This new book advances the
work started in his other books and course
but goes much further revealing little
known secret methods only a very small
handful of professionals know and in many
cases he reveals proprietary techniques
never before revealed to the public at any
price. The chapter on the Gann Square of
Nine is much more complete than 90% of
courses available selling for hundreds to
thousands of dollars more. This chapter
alone is worth several times the cost of the
book but the secret ratio analysis at the end
of the book will truly change your trading
habits forever. When you finish this book
there is little left to learn about advanced
trading and forecasting techniques with
the rare exception of astrological methods,
which are not covered in this work. This
book goes from beginning concepts to
the most advanced so anyone can greatly
benefit from reading it. All concepts are
demonstrated with actual chart histories.
It is not, however, for the casual investor
who does not want to take the time to
calculate a simple square root on a hand
held calculator. If you liked Mr. Jenkins’
previous books and/or his trading course,
then this one will easily surpass your
expectations.
Simple Secrets of the
Trading Master Price:
$90.00 Buy Now
By Jack Winkleman In
the ebb and flow of the
markets over a longer
time such as one year or
more, it is important to
know what the market has done in the past.
Certain years seem to follow the patterns of
previous years with uncanny likeness. This
is a book put together by Mr. Winkleman
and is a very valuable tool. This book tells
a trader how to used past harmonic cycles
for forecasting future trends. This book
is a picture of the markets since 1920 in
Soybeans. As an added bonus, it has a track
record of the Dow Jones Cash Index from
1900 - 2006. Cycles are nothing more than
repeating patterns. Trends follow cycles.
This book gives you the key cycles in the
market. All you need to know is what those
repeating patterns are. That is why the
historical charts become so valuable and
this is why this book is so important.
101

Calibrating Gann`s Planetary Lines

Transcription

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