|
Welcome all our Safety in the Market traders to this month’s dedicated newsletter. While April proved a slightly tougher month for trading than March it still essentially provided more to the upside for the overall market. The signs of the fear abating in the short term continue to appear. I’ve been talking about my sentiments over the past couple of editions. The moves in AMP and ANZ certainly were great successes. Where are things now overall and what should one be watching out for next are always key questions to be answered.
This month I have a slight treat for you in terms of putting more focus on the element of time. If I’m going to share with you some things I’m looking at for future direction, the element of time is always a big factor. However ‘time’ is something that can be overtly shared in this forum, it is more a subject for Platinum Fast-Track Monthly Newsletters.
If we are looking at least for a bear market rally (a bull cycle in an overall bigger bear market) we are still going to see the market move in ‘sections’. This means breaking the market movements into up and down legs, taking a slightly broader view. I’m happy to stick with my outlook for now that we are forming a ‘first leg-out’ from the March 10, 2009 low. The question is where and more importantly when might it end?
Chart 1 shows the daily bar chart action on the SPI200 from around the beginning of November 2008. You will see where I have broken down the movements from the November 21 low into sections. By studying the time frames within each section we get some valuable insights.
Chart 1 – SPI200 Daily Bar Chart – Sectional Analysis
click chart to enlarge
The run up from the November 21 low (3361) to the January 7, 2009 top (3811) lasted for 47 days. The run down from the January high to the March 10 low (3111) then took 62 days or basically 133% of the run up.
The market has run up to a current high on May 11 (3953) in a time of 62 days which is 100% of the last run down and of course 133% of the last run up. 150% of the last run up is about 71 days and would take us to May 20. These are two keys time frames to watch out for time pressure and in this situation a possible high. The fact that this latest up leg is longer in both time and price compared to the last up move, helps confirm a belief this could be a first left up in a new bull cycle.
Chart 2 shows the market action from just prior to the May 19, 2008 high (6004). Looking back in terms of Time by Degrees we also have some great stuff highlighting the importance of dates in May.
Chart 2 – SPI200 Daily Bar Chart – Time by Degrees
click chart to enlarge
Looking back from early May (where we are now approximately) we have great changes in trend at key degree intervals backward on January 7 (2009), November 7 (2008) and August 5 (2008). Around May 19 we have very important turns around 180 and 360 degrees going backward.
The next big trading opportunity looks likely to be following the pull-back from the 1st leg out and well worth waiting for patiently. Things always take longer than we wish when waiting and seem to happen so quickly at the time. Be patient, keep your eye on the ball and the time will come.
What I have shared with you here is a brief insight into the valuable knowledge to be gained through our Gann Jump Start Workshop and the Ultimate Gann Course both of which are a part of the Platinum Fast-Track Program.
Adding the element of time to your trading plan and knowledge base will become the most important step you take. Time analysis is incredible and once a part of your trading plan represents your most profitable and empowering step. I know I wouldn’t be without it.
Until next TIME...
Noel Campbell
Professional Derivatives Trader
|