Sunday, September 21, 2014

Here's Why Trendlines are Your New Best Friend, Part 3


See how trendlines help you make calculated trading decisions

By Elliott Wave International

Have you ever seen Donald Duck play pool? Trust us, it isn't pretty.

An expert pool player, on the other hand -- well, he can just look at the billiards table and imagine lines drawn out, marking the trajectory the cue ball must take to make the shot.

Now, what if you could just look at a financial market's price chart -- and see actual lines drawn out that aim straight for the "pocket" of opportunity?

According to our resident Monthly Commodity Junctures editor and chief commodity analyst Jeffrey Kennedy, you can.

All you need to do is implement a tried-and-true tool of technical analysis known as trendlines. (And let's just say, what Paul Newman is to the game of pool in the Hustler, Jeffrey Kennedy is to the field of technical analysis in real life.)

In part 1 of our series, we showed you how Jeffrey used trendlines to identify a major break-out point in cocoa back in May 2014. Part 2 played the video of Jeffrey's April 2014 corn forecast, where he used trendlines to fortify his bearish wave count -- right before corn prices embarked on a powerful sell-off to 4-year lows.

Today, we're returning to that April 2014 Monthly Commodity Junctures video to show you 3 more examples of how Jeffrey used trendlines to "call the pocket" in coffee, sugar, and the U.S. dollar. Roll the tape!

Of coffee, Jeffrey said: "We can expect a counter-trend move back to near the previous fourth wave extreme, roughly say between 170 and 160.

Coffee prices indeed sold off in three waves (i.e. counter-trend action) to the "previous fourth wave extreme" after breaking through the lower boundary of the trend channel:

image

Of sugar, Jeffrey said: "Once complete, wave (Y) of the larger fourth wave will give way to additional selling to back below the actual 2014 low."

Here's what happened to sugar prices after they fell below their trendline:

image

Of the U.S. dollar, Jeffrey said: "Ideally we'll begin to see this third wave move [up] develop soon... in a nice, volatile move to the upside."

The dollar indeed rallied strongly off that trendline:

image

It's safe to say, once you truly understand the risk-managing power of trendlines, they will become one of the most valuable tools in your technical toolbox. And nobody can attest to that fact more than Jeffrey Kennedy.

In fact, Jeffery loves trendlines so much, he wrote a book about them. Well, a free eBook -- titled "Trading the Line: 5 Ways You Can Use Trendlines to Improve Your Trading."

As the title of Jeffrey's eBook states, there are 5 ways trendlines improve your trading:

  1. Trendlines show you the dominant psychology of investors, be it bullish or bearish
  2. They define your risk via support and resistance price levels
  3. They give you advanced warning of potential price breakout points
  4. They help you identify critical moments in time
  5. Trendlines also tell you when the trend has turned

Want to learn how to draw your own trendlines -- and gain an advantage you've never had before?

Right now, we are offering the entire 17-page eBook (14 of those pages include Jeffrey's carefully chosen charts and analysis) as part of our FREE trader resources. Once you join the 325,000-plus members of our Club EWI family, it's yours for the reading -- at absolutely no cost.


This article was syndicated by Elliott Wave International and was originally published under the headline Here's Why Trendlines are Your New Best Friend, Part 3. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

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Friday, September 19, 2014

BANKNIFTY PREMARKET NOTES—19 Sept


 

BANKNIFTY PREMARKET NOTES:-

  • SGX NIFTY  is  8 POINTS UP showing   FLAT TO POSITIVE OPENING after yesterdays HUGE UPMOVE . So the BANKNIFTY also will open will around 20-30 POINTS GAP UP.
  • FII Activity – CASH SOLD --9 CR / INDEX FUT BOUGHT ++644 CR

 

What we DID YESTERDAY:-

-----We entered LONG at 15844  and we SHARED it on TWITTER .

image

 

BANKNIFTY FUT DEMAND SUPPLY
1 16111 16246
2 15996 16303
3 15874 16367

These levels are where we have to watch how market reacts and we have to take decision as per the PRICE ACTION.

DAILY CHART:-

 

  • After yesterday’s  good UPMOVE in BANKNIFTY now it is expected a CONSOLIDATION or a PAUSE DAY today.
  • As per DAILY CHART this is the PLACE from where downmove is started. So here there will be SOME efforts will be seen from BEARS
  • Banknifty Daily Candle is STRONG BULLISH ENGULFING  CANDLE .

 

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Thursday, September 18, 2014

BANKNIFTY PREMARKET NOTES—18 Sept


 

BANKNIFTY PREMARKET NOTES:-

  • SGX NIFTY  is  35 POINTS DOWN showing   GAP DOWN  OPENING after yesterdays PAUSE CO . So the BANKNIFTY also will open will around 100  POINTS GAP down.
  • FII Activity – CASH BOUGHT ++136 CR / INDEX FUT BOUGHT ++52 CR

 

 

BANKNIFTY FUT DEMAND SUPPLY
1 15807 15990
2 15730 16115
3 -- 16210

These levels are where we have to watch how market reacts and we have to take decision as per the PRICE ACTION.

DAILY CHART:-

image

  • After a BIG DOWNMOVE on16 Sept Banknifty taken a PAUSE Yesterday.
  • . And Still Banknifty weakness  is looking to be continued. There are no SIGNS of recovery is till shown.
  • Banknifty Daily Candle is CONTINUATION BEARISH  CANDLE .
  • Now as the DAILY CHART SHOWs BANKNIFTY CAN have a GOOD SUPPORT at 15730.

 

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Wednesday, September 17, 2014

Don't Get Ruined by These 10 Popular Investment Myths (Part V)


Interest rates, oil prices, earnings, GDP, wars, terrorist attacks, inflation, monetary policy, etc. -- NONE have a reliable effect on the stock market

By Elliott Wave International

You may remember that during the 2008-2009 financial crisis, many called into question traditional economic models.

Why did the traditional financial models fail? And more importantly, will they warn us of a new approaching doomsday, should there be one?

This series gives you a well-researched answer.

Here is Part V; come back soon for Part VI.


Myth #5: "GDP drives stock prices."
By Robert Prechter (excerpted from the monthly Elliott Wave Theorist; published since 1979)

Surely the stock market reflects the nation's Gross Domestic Product. The aggregate success of corporations shows up as changes in GDP. Stocks are shares in corporations. How could their prices not reflect the ebb and flow of GDP?

Suppose that you had perfect foreknowledge that over the next 3 3/4 years GDP would be positive every single quarter and that one of those quarters would surprise economists in being the strongest quarterly rise in a half-century span. Would you buy stocks?

If you had acted on such knowledge in March 1976, you would have owned stocks for four years in which the DJIA fell 22%. If at the end of Q1 1980 you figured out that the quarter would be negative and would be followed by yet another negative quarter, you would have sold out at the bottom.

Suppose you were to possess perfect knowledge that next quarter's GDP will be the strongest rising quarter for a span of 15 years, guaranteed. Would you buy stocks?

Had you anticipated precisely this event for 4Q 1987, you would have owned stocks for the biggest stock market crash since 1929. GDP was positive every quarter for 20 straight quarters before the crash and for 10 quarters thereafter. But the market crashed anyway. Three years after the start of 4Q 1987, stock prices were still below their level of that time despite 30 uninterrupted quarters of rising GDP.

Figure 10 shows these two events. It seems that there is something wrong with the idea that investors rationally value stocks according to growth or contraction in GDP.

Interest rates, oil prices, trade balances, corporate earnings and GDP: None of them seem to be important, or even relevant, to explaining stock price changes. But you need not trust your own eyes. In a study that is stunning for its boldness in actually checking basis premises, Cutler, Poterba and Summers in a paper for the Journal of Portfolio Management in 1989 investigated the effect of economic news on stock prices and concluded,

"Macroeconomic news bearing on fundamental values...explains only about one fifth of the movement in stock prices."

Even here, I would question the conclusion that such news "explains" even 1/5 of the movement in stock prices. Surely a set of football statistics could generate a 1/5 correlation to the S&P. And every correlation, to have meaning, must have a theory to account for it.

What theory accommodates the idea that macroeconomic fundamentals explain 1/5 of stock price changes? If there is no accommodating theory, then the presumed causality involved is tenuous at best.v

(Stay tuned for Part VI of this important series, where we examine another popular investment myth: Namely, that "Wars are bullish/bearish for stock prices.")


Free Report:
"The Biggest Lie in Stock Market History"

Dear Reader,

We believe risks and opportunities even larger than those of 2007-2009 lie ahead in a bear market of epic proportions.

Only problem is, this bear market is silent right now. It's not visible to the public, because the government and the Federal Reserve inflate the credit supply and the U.S. dollar to hide its impact.

But make no mistake about it: There is a Silent Crash going on right now in the stock market, and it's having a very real impact on your spending power.

Read this special report now, free -- and see 15 eye-opening charts >>

Read more ...

BANKNIFTY PREMARKET NOTES—17th SEPT


 

BANKNIFTY PREMARKET NOTES:-

  • SGX NIFTY  is  50 POINTS UP showing  BIG GAP UP  OPENING after yesterdays SHARP CORRECTION . So the BANKNIFTY also will open will 100 to 150  POINTS GAP UP.
  • FII Activity – CASH SOLD --828 CR / INDEX FUT SOLD -- 162 CR

 

 

BANKNIFTY FUT DEMAND SUPPLY
1 15878 16024
2 15825 16130
3 15966 16210

These levels are where we have to watch how market reacts and we have to take decision as per the PRICE ACTION.

DAILY CHART:-

image

  • As we expected yesterdays Premarket Notes it played well and BNF given the EXPECTED BIG downmove.
  • NOW the Previous Support May act as Resistance.
  • Now the ZONE will be 16100 to 15850 for the DAY.
  • Banknifty Daily Candle is BEARISH ENGULFING CANDLE .
  • Now as SGX NIFTY is suggesting GAP UP..we can expect 61.8% retracement which CURRENTLY at 16137.

 

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Tuesday, September 16, 2014

3 WAYs TO SELECT STOCKS/SCRIPS FOR INTRADAY TRADING


image

Intraday Trading stock selection is a hard TASK for many Traders. There are many Ways to Select Stocks for INTRADAY TRADING. We will list few of them here which we consider that many successful TRADERs are using. Following are the ways to SELECT STOCKS/SCRIPS for INTRADAY TRADING.

1. FIXED STOCKS EVERY DAY:-

  • This is the method which many REGULAR TRADERS are using( I am ONE OF THEM). They SELECT some stocks which have GOOD VOLUME  and INTRADAY VOLATILITY THAT ONE CAN HANDLE.
  • One can SELECT from 2 to 10 STOCKS and can trade them REGULARY with your TRADING METHOD’s SIGNAL. ( LESS no of STOCKs is good. )
  • This method which I feel is useful COZ we are TRACKING SAME STOCKS for everyday. So we are aware about its levels in general.
  • Many of the TRADERS Trade ONLY NIFTY FUTURE and/or BANKNIFTY FUTURE everyday.

2. STOCKS IN NEWS:-

  • This method is also USED BY MANY ELITE TRADERS. This method is HIGH RISK and HIGH REWARD METHOD.
  • For this one have to go and watch the TELEVISION in the MORNING after 8’O Clock on CNBC AWAAZ and ZEE BUSINESS they SHOW STOCKS in news. (TIMING MAY DIFFER) Here they tell about the stocks which are in NEWS for today.
  • Here you can select FEW of them which have HIGHER NEWS VOLATILITY expected. For Ex. When the news SUPREME COURT NEWS about COAL SCAM COMES the Stocks which are related to it are definitely expected to give GOOD INTRADAY MOVES.
  • ONLY THING is that ONE NEEDs to BE CAUTIOUS and to go with the LATEST INTRADAY TREND with STRICT STOPLOSS. Because there can be sudden moves which MAY REWARD you highly or HARM you HIGHLY.

3.  WEAK STOCK WEAK SECTOR/ STRONG STOCK STRONG SECTOR:-

  • This is also one of the GOOD PROVEN Method to select the STOCKs for INTRADAY TRADING.
  • Here you can go to the SITES LIKE MONEYCONTROL where you can find STRONG/WEAK SECTORS and then find STRONG STOCK from STRONG SECTOR and WEAK STOCK FROM WEAK SECTOR.
  • Here one has to FIND OPPORTUNITIES in the Direction of Trend.

We will LIST the other METHODS as and when we COME ACROSS it.

HELP US SPREAD the

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Don't Get Ruined by These 10 Popular Investment Myths (Part IV)


Interest rates, oil prices, earnings, GDP, wars, terrorist attacks, inflation, monetary policy, etc. -- NONE have a reliable effect on the stock market

By Elliott Wave International

You may remember that during the 2008-2009 financial crisis, many called into question traditional economic models.

Why did the traditional financial models fail? And more importantly, will they warn us of a new approaching doomsday, should there be one?

This series gives you a well-researched answer.

Here is Part IV; come back soon for Part V.


Myth #4: "Earnings drive stock prices."
By Robert Prechter (excerpted from the monthly Elliott Wave Theorist; published since 1979)

This belief powers the bulk of the research on Wall Street. Countless analysts try to forecast corporate earnings so they can forecast stock prices. The exogenous-cause [i.e., news-driven -- Ed.] basis for this research is quite clear:

Corporate earnings are the basis of the growth and the contraction of companies and dividends. Rising earnings indicate growing companies and imply rising dividends, and falling earnings suggest the opposite. Corporate growth rates and changes in dividend payout are the reasons investors buy and sell stocks.

Therefore, if you can forecast earnings, you can forecast stock prices.

Suppose you were to be guaranteed that corporate earnings would rise strongly for the next six quarters straight. Reports of such improvement would constitute one powerful "information flow." So, should you buy stocks?

Figure 9 shows that in 1973-1974, earnings per share for S&P 500 companies soared for six quarters in a row, during which time the S&P suffered its largest decline since 1937-1942.

This is not a small departure from the expected relationship; it is a history-making departure. Earnings soared, and stocks had their largest collapse for the entire period from 1938 through 2007, a 70-year span! Moreover, the S&P bottomed in early October 1974, and earnings per share then turned down for twelve straight months, just as the S&P turned up!

An investor with foreknowledge of these earnings trends would have made two perfectly incorrect decisions, buying near the top of the market and selling at the bottom.

In real life, no one knows what earnings will do, so no one would have made such bad decisions on the basis of foreknowledge. Unfortunately, the basis that investors did use -- and which is still popular today -- is worse:

They buy and sell based on estimated earnings, which incorporate analysts' emotional biases, which are usually wrongly timed.

But that is a story we will tell later. Suffice it for now to say that this glaring an exception to the idea of a causal relationship between corporate earnings and stock prices challenges bedrock theory. ...

(Stay tuned for Part V of this important series, where we examine another popular investment myth: Namely, that "GDP drives stock prices.")


Free Report:
"The Biggest Lie in Stock Market History"

Dear Reader,

We believe risks and opportunities even larger than those of 2007-2009 lie ahead in a bear market of epic proportions.

Only problem is, this bear market is silent right now. It's not visible to the public, because the government and the Federal Reserve inflate the credit supply and the U.S. dollar to hide its impact.

But make no mistake about it: There is a Silent Crash going on right now in the stock market, and it's having a very real impact on your spending power.

Read this special report now, free -- and see 15 eye-opening charts >>

Read more ...
 

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