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Welcome from me to all our Safety in the Market traders to this month’s dedicated newsletter. I’m in the midst of final preparation for our first, and perhaps only ever Master Forecasting Summit. It is with great pleasure, though, that I get to take a short break from that bring to you an exciting update.
Back in July I wrote an article for you entitled, ‘Opportunities, Opportunities, Opportunities...’ My focus there was on a double bottom set-up on Seven (SEV) and also a chance to talk to you about the importance of seeing the market in terms of the ‘bigger picture’ using a potential AMP set-up as the case study below.
Chart 1 below is the chart from that article. I had broken the market down into sections and felt we might be looking at the equivalent of a big picture ABC wave pattern.
Chart 1 – AMP Daily Bar Chart – Big Picture ABC Set-up
click chart to enlarge
Well, since the time of writing (10 July 2009) AMP has been on a stellar run, virtually without a pullback. It also provided a couple of successful ABC long trades along the way. Once the market had moved away and the pattern perspective was confirmed, the benefit of the work certainly doesn’t stop there. Taking the extrapolation of Smarter Starter Pack theory one step further, we can now run our ‘big picture’ Point A to B range up from the ‘big picture’ Point C.
Chart 2 below has the update market action on AMP. You can see the strength of the run that I’m talking about - it was very profitable for me and I hope for many of you!
Chart 2 –AMP Daily Bar Chart – Big Picture ABC Set-up Update
click chart to enlarge
Taking the ‘Reference Range’ of $3.52 to $5.57 we get a range of $2.05. Adding that range to the 8 July 2009 low ($4.55) we get a target of $6.60 ($4.55 + $2.05). The recent high on 1 September has come in at $6.67 and since that time we have observed an ‘Overbalance in Price’ off that top, perhaps indicating at least a short term change in trend. For my mind it will only be a pull-back for now and a chance to watch for another low to buy in again in the coming few weeks. However $6.60 was a great place to take profits and shows to perfection just how powerful this ability to combine perspectives can be.
I couldn’t have asked for things to work out better. That being said, am I surprised that it worked out so well? Of course not, Gann is brilliant, our Safety in the Market education is brilliant and you have to just get in there work, ponder and plan and you, too, can be watching the market unfold nearly perfectly at times in front of your eyes.
Until next time...
Noel Campbell
Professional Derivatives Trader
P.S. Take a look at the Seven (SEV) chart coming off the double bottom we looked at in the same article back in July – go you good thing.
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