|
Welcome all Safety in the Market traders to this month’s dedicated newsletter. Since I last wrote to you in early November, we have seen the market fall away quite heavily and then bounce all the way back in just under a week. It’s basically been that type of year for SPI200, particularly since the runs into and out of the 15 April high.
Chart 1shows the movements on the SPI200 over the past 4 years and just how small the range this year has been in total.
Chart 1 – Yearly Ranges SPI200
click chart to enlarge
Now of course you would all know that I’ve been happy with the Gann price and time pressure for the 15 April high of 2010. It is exceptionally strong in terms of time and price and looks likely to be the high of the year for 2010. The high of the year is one thing to pick, it is picking the big ‘cyclic’ highs and lows that yield the best results. That’s what David and Gann has us focussing on in their Master Time Cycles lessons.
Taking a look at Chart 2, I’ll show you something that came up at the last Gann Mastery Workshop in Brisbane just last week. Take a few moments to study it now and then we can discuss.
Chart 2 – SPI Sections of a Market
click chart to enlarge
In Chart 2, I have broken up the movements on the SPI200 since the 6 July low into what we could consider to be the ‘Sections’ of the market movements since that low.
As you can see, the range from 25 August to 8 November is around 133% of the first range out from the July low. Now according to Road Map Chart theory this is the ‘Gann Expansion’ area and would suggest that there is at least another run with the trend left it this market.
The dip down to 24 November recently took out the lows of the sideways period through October and since then the market has bounced back into life. Looks like the market may have made a false break to the downside before starting up for a third leg. When you look at the weight of evidence based on what the chart is telling us with this analysis, it encourages the long side for now and discourages the short side.
On the flip side, should the market fail to take out the April high and then break the 25 November low and then we are back on for the short side. You need to be your own trader and make your own decisions.
What I’ve been able to do with you this month is share some of the work we did at the Gann Mastery Workshop Brisbane with some of our most advanced students. Whilst there was a great deal more we discussed in terms of dates and prices to watch, this wave structure does give some conviction going forward in the short to medium term.
I wish all our Safety in the Market traders and their family all the very best for Christmas and the festive season. Set your goals for 2011 and get things in motion as soon as possible.
Until next month...
Noel Campbell
Professional Derivatives Trader
|