Friday, October 20, 2017

Black Monday's 30-Year Anniversary

News
The majority, driven by headline fear, was forecasting a 1929-style collapse, crisis, and various other forms of chaos. Tape readers that listened to the message of the market and ignored the majority's fear saw the secondary and primary trend flip from bearish to bullish by mid 1988. The rest is history.

Please review the computer's output from 1987 to 1990 to better understand how the majority fears were misplaced and how the minority of tape readers benefited by standing against them.

Headline: Black Monday anniversary: How the 2017 stock market compares with 1987

Is the stock market’s seemingly relentless 2017 rally anything like the 1987 run-up that ended 30 years ago Thursday with the most devastating one-day plunge in Wall Street history?

At first glance, investors might think so. And charts arguing the case have made the rounds from time to time. But on closer examination, many of those comparisons don’t hold water.

Here’s a look at a pair of charts from LPL Financial that illustrate the point.


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Canadian Dollar Review $FXE #Loonie

Canadian $ Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Canadian Dollar's overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

Upside alignment in the secondary and primary trend alignment defines an anemic multi-month rally. The bulls follow the tape as long as upside alignment exists and TIME permits. Smart money, a small group that recognizes that all markets follow the cycle of TIME, will slowly reduce their positions as the majority enters the trend.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Thursday, October 19, 2017

Semiconductors Review $SOX #Semis

Semis
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Semiconductor's overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

Upside alignment in the secondary and primary trend alignment defines a powerful multi-month rally. The bulls follow the tape as long as upside alignment exists and TIME permits. Smart money, a small group that recognizes that all markets follow the cycle of TIME, is reducing their positions as an optimistic majority enter a rapidly aging trend.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

#Sentiment Review $SPX

Sentiment
The old American idiom of a day late and dollar short is an phrase easily applied to majority's ability to time (buy or sell) US stocks. The majority, influenced more by instinctual behavioral tendency of the individual to seek acceptance of an emotionally-driven crowd than act independently in the minority, views rising and falling stocks prices as bullish and bearish. This tendency that drives them chase when probabilities favor fading relegates the majority as the consistent bagholders of history's panics and trend changes.

Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.”, John Templeton



Subscriber Comments



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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Wednesday, October 18, 2017

Majority Focuses on Domestic Factors When Analyzing US Stocks

News
Sounds logical, so it must be true. The majority, which is just beginning to realize that the stock market is rallying, believes things like fundamentals, policies - largely domestic factors are the sole driver of US stocks. They generally ignore international capital flows.

Successful traders recognize early that non-linear trends are driven by human behavior, not mathematical relationships. Accelerating trends are notoriously difficult to trade for the majority. The majority, still neutral on stocks, may not be given an easy entry. If US stocks continue to defy logic, the majority will eventually capitulate and buy aggressive, thus, securing their role as bagholders of major trend transitions.

While the cycle of time defines extended secondary trends for US stocks,  it neither suggests a major top nor decline is imminent.  The cycle of TIME is far less extended for the primary trend.  In other words, an easy pullback may not develop despite the majority's neutrality towards stocks.

Headline: Treasury Secretary Mnuchin thinks a failure to pass tax reform will send stocks tumbling

Treasury Secretary Steven Mnuchin thinks the stock market’s performance depends on tax reform.

“There is no question that the rally in the stock market has baked into it reasonably high expectations of us getting tax cuts and tax reform done,” Mnuchin told Politico’s Ben White in a podcast interview published Wednesday.


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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Reading the Tape $AAPL, $AMZN, $ATR, $BABA, $EBAY, $GBTC, $NFLX, $NVDA, $TSLA

Reading the Tape
Traders read the tape - ticker tape in the old days to determine the recent buying and selling pressure. Here lies the importance of volume. It's easy to spot a large buyer or seller when the volume is light. Big buyers usually enter before big moves.

Jesse Livermore read the tape and never fought it.

Of course there is always a reason for fluctuations, but the tape does not concern itself with the why or wherefore. It doesn’t go into explanations. I didn’t ask the tape why when I was fourteen, and I don’t ask it today at forty…, Reminiscences of a Stock Operator.


While the tape, often triggered by price in reaction or anticipation of the new flow, is triggered by price, it's fueled by force. Volume is the domain of force. Traders/investors must learn to read the force behind the trend.

Subscriber Comments

Secondary and primary trends of Apple, Amazon, Aptar Group, Alibaba, Ebay, Bitcoin Invst Trst, Alphabet/Google, Netflix, Nvidia, and Tesla. Follow alignment.



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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.

Heating Oil Review $UHN


Heating Oil Review
Those that view the message of the market on daily basis are likely confused by trading noise. While trading noise contributes to the long-term trends, it does not define them. Human behavior tries to explain trading noise as a meaningful trend. This confuses the majority which, in turn, contributes to their role as bagholders of trend transitions.

Heating Oil's overall trend, revealed by trends of price, leverage, and time, are defined in the The Matrix for subscribers.

Subscriber Comments

Upside alignment in the secondary and primary trend alignment defines a multi-week rally. The bulls follow the tape as long as upside alignment exists and TIME permits. Smart money, a small group that recognizes that all markets follow the cycle of TIME, will slowly reduce their positions as the majority enters the trend.

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Market-driven money flow, trend, and intermarket analysis is provided by an Insights key.