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Welcome all Safety in the Market traders to this month’s dedicated newsletter. What a month it has been since I last spoke to you in this forum. The equities markets have had a mini melt down and the currency markets decided it was time to really get moving, along with a number of commodities. This of course is primarily due to the trouble in Europe. This drama in Europe could not have come at a more apt time considering my view on the strong US Dollar and weak Euro dollar. Trust me, I didn’t plan it, the charts just told me to watch for trouble! It is amazing how the fundamentals fall in line behind the technicals if you have the chart reading correct. If you receive the Platinum Fast-track Newsletter you will know exactly what I’m talking about.
Last month I set you the task of printing your own AMP Wall Chart on ProfitSource and as a quick update I’m pleased to say that I’ve had great feedback on quite a number of you who took successfully took up the challenge. Well done!
In the last quarter of last year I was part of two forecasting classes. There was the Master Forecasting Summit in September and the SPI Forecasting Online Workshop in October. At both those events I showed my work for a top between 7 to around 16 January this year on the SPI200 and other global stock indices. It is still only early days; however things are looking good for another successful Gann forecast. The power of Gann’s teaching still never ceases to amaze me. In the beginning of January the press was talking up the stock market and superannuation, while Gann theory was saying to be on red alert for a top. I know what my preference is for my decision making and market analysis!
A big part of my forecasts has come from a theory Gann calls, Master Time Cycles. This involves comparing the current market action with history on the basis of studying the same period of each decade going backward looking for a ‘Road Map’. Using this technique the arguments are a strong on the basis of 20 year cycles.
- 1909 ran down to 1912 – 100 years (5 cycles of 20 years)
- 1929 ran down to 1932 – 80 years (4 cycles of 20 years)
- 1989 ran down to 1991 – 20 years (1 cycle)
Gann actually predicted the crash of 1929 and subsequent bear market using the addition of 20 years to the market action of 1909 into 1912. If we look at the chart of the SPI200 back in 1989, the market really wasn’t any good until November 1992.
Now this of course all may seem a little scary and potentially bad news. Well that depends on how you see things and how well positioned you are to take advantage of any market developments. There are ways of protecting exposure to stock market risk and of course we know there are ways to profit handsomely from a downward move in the markets if that is to continue. This is a time where knowledge and confidence is power to the nth degree.
Make sure you get along to Trading Tactics Seminars throughout the year, attend that advanced workshop you have always being saying you should get along to and get yourself ready. Opportunities like this don’t come along every day.
Until next month...
Noel Campbell
Professional Derivatives Trader
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