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Big moves happen in the market (in either direction) when you least expect it, so expect it at any time!
- Dominick Mazza | |
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Today's Featured Article
Just looking at the tape from last week reveals the extent to which traders were short stocks after the Fed meeting and forced to cover, which sparked a rally that now has much of Wall Street bullish on stocks. Most traders, if they were able to filter out the noise and focus on charts, probably still did what they were trained to do: sell every trendline, Fibonacci retrace, divergence and moving average that appeared to suggest at least an intermediate term top in stocks. TradingtheCharts.com (TTC), on the other hand, is proof you can do things differently.
If you cannot view Chart 1 (Euro),
go here.
For weeks we'd been tracking a diagonal pattern in the euro, with a well-defined target fully expected to provide a major reversal. It didn't phase members knowing this idea cut against the grain of Wall Street consensus as the dollar floundered in a morass of declining interest rates and economic expectations -- while monitoring recognized levels that would invalidate the count, we knew a euro reversal would have repercussions for a wide range of markets, including the S&P 500, Gold and Silver. | |
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If you cannot view Chart 2 (S&P 500 Weekly),
go here.
The multi-year cycle shown above suggested an intermediate term market bottom would occur as support at a higher low, and in fact the market has rallied sharply from the low put in on the exact date predicted. Members were well aware of this likelihood well in advance just as other traders continued to fall prey to dreams of a 3rd of a 3rd of a 3rd down yet again.
If you cannot view Chart 3 (E-Mini S&P 500), go here.
Another perfect example of how TTC members eschew the news that must motivate so many of the losing trades on Wall Street, is our recent analysis leading into the April Federal Reserve meeting. While the majority of traders attempted to guess at what the Fed's policy statement would say and how the market might react, we started the week with a firm wave pattern idea that simultaneously gave us targets on the long and short sides, as well as stops and limits for the trade. With a bit of careful money management, another important concern to TTC members, we were able to turn Fed day into a winning day with a strategy based in no way on fundamental analysis or news. The chart below shows
the results of the idea posted above.
If you cannot view Chart 4 (E-Mini S&P 500),
go here.
Now, the reversal in the euro comes as the broad stock index reaches considerable resistance which our proprietary trend following system, used by members on a daily, weekly and intraday timeframe, has been signaling emphasizing as a crucial make-or-break area. Ironically, market sentiment has become overwhelmingly bullish, but having pounded the table about being long above 1256, the widespread feelings that it's now time get in to the market has us instead eyeing the exits.
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If you cannot view Chart 5 (S&P 500 Monthly), go here.
We continue to believe that the most important pivotal level going forward from here is in the vicinity of the 1440 area, and that price action from that level will give us the correct count for the major markets on a weekly time frame. That area comes from our proprietary Fib work but as you can see, the above chart points to about the same area. Certainly, both bulls and bears will be fighting it out in the month of May and the winner will take all.
Also making headlines as stocks rally on dollar strength and euro weakness, is the selloff in gold, part of what many are calling the end of the commodities boom. Gold in particular is getting much of the focus as a market whose recent performance says to many a top is in place. In sharp contrast, our view of the gold market, while not seeing a bottom quite yet, is of a complex correction within a bull market.
If you cannot view Chart 6 (Gold),
go here.
Not only does the Elliott wave count in the chart above foresee new highs in gold over the coming year, the weakness since the March highs has as a distinctly corrective look about it. A significant retracement from recent lows would corroborate the count above and fit nicely with our expectations for the euro.
In a word, the technique employed at TTC can be called "unbiased". Liberated from preconceived notions about what the market should do, our members learn to listen to what the market is doing, and how to trade accordingly. Through our superior proprietary numbers, trend cycle indicators, cycle projections and Elliott wave analysis, TTC members are able to shut off the TV, tune out the noise and make money doing what we do best: trading the charts.
Join before May 31, 2008
If you want to be a TTC member and trade the unbiased way, there's still time before our May 31st cutoff date, at which time we will close the door to new retail membership. Our roster has grown exponentially since our inception in January 2006, and, in the interest of maintaining a manageable group of dedicated traders, we will not be accepting new members after May 31st. The only possible exception will be institutional traders, who've already become a big part of our team, and on whom we'd like to focus our effort. All members before the cutoff can remain indefinitely, so join now and be grandfathered in at the current rates.
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About the Author
| Dominick Mazza has been a full time trader since 1996. He owns and operates TradingtheCharts.com since January 2006. His specialty is technical analysis of all markets using "unbiased" Elliott wave, proprietary Support and resistance levels, and proprietary trend charts. | |
Special Message from Our Author
Complimentary Elliott Wave Analysis
Sign up now and receive valuable insight into market structure and forecasts using Elliott Wave, Gann, proprietary cycle work, Delta, Fibonacci, and many other popular and proprietary indicators. You will also receive professional charts/comments covering a range of popular methods and systems and access to all areas including real time chat! Sign Up Today! | |
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