• Trade & Investment Planning

    Making your own trade and investment decisions should begin with two important points. The first is to develop a methodology that will lead to strategic planning for each market or instrument you decide on investing in. The second is to develop a well thought out business plan. This plan will give you the important aspects of planning, management and control. Both methodology and business planning are critical success ingredients. Eliminate either one and you increase your probability of failure.

  • Price Development

    In developing a methodology, understanding the development of price is critical. You must know whether the trend is up or down. Most traders and investors can identify the immediate trend but they ignore the next greater degree time frame trend. Understanding price development in multiple time frames is a critical success ingredient.

  • Trend Structure

    Understanding price development in multiple timeframes is important, but knowing whether the development is strong and strengthening or weakening will help understand whether to enter or exit a position. Knowing the structure of a market or instrument going into a support or resistance area will also help in identifying whether there will be a continuation of the trend, a pause, or a rotation back.

  • Trade Location

    If you understand where the participants in a market or instrument have found value in the past, you then know where “fair” and “unfair” prices are. This enables you to identify areas of good trade location for entries and exits. Identifying those areas in multiple timeframes can give you an indication of whether to expect a larger degree move or a potential rotation back to previously found value.

It is important to understand the development of price in any market you trade or invest.  Analyzing price development in multiple timeframes gives us areas of reference for support and resistance.  Additionally, studying the strength or weakness of the structure of the trend will give us a probability assessment of one event occurring over another.  In other words, coming into resistance, is there a higher probability for the market to continue to extend the rally, or will there be some type of rotation down.  If there is rotation down, then it will be important to determine the degree of time and price of that selloff. TheRead More →

As you will see in the Briefing, the internal structure of the Stock Indices is continuing to deteriorate.  Stocks are tightening and suggest another breakout is in the offing.  While we may see another day or two of upside rotation, unless the internals change, there will be some type of corrective move to the downside.  I fully expect the Fed to be in control of any rotation down until the election, so it may only be a rotation that would test the 2140 area in the S&P.  That is important support.  I am working with a group on a computer model for individual stocks.  ItRead More →

The news event (employment numbers) on Friday morning changed the structure of the Stock Indices to some degree.  Most of the divergences in Breadth were eliminated but volume was extremely weak.  New highs for the week did not suggest a breakout and up volume declined for the week as well.  This all suggests that unless we see a continuation of the strengthening of the market internals, we may see a retest of the breakout point.  In the S&P that point is 2170.  As you will see in the Briefing, the development of the Stock Indices in multiple timeframes is at critical levels.  Either they strengthenRead More →

I planned on publishing the August Newsletter at the beginning of next week.  However, the current development of the Stock Indices, especially after Friday’s trading, is very important.  I believe what happens the first part of the week could be very informative. All three Indices covered are at different important short, intermediate and longer term Key Reference Areas.  Any move higher puts them in vertical development.  However, a failure to move much above Friday’s highs will suggest weakness and the potential for some type of rotation down. The development of price and the structure of that development may have a dramatic impact on all timeframes. Read More →

Longer term, the Stock Indices are at important upper extremes with the S&P actually breaking out above that resistance.  The NASDAQ is right at long term resistance in the 4740 area.  However, going into that resistance, the internals have  been diverging from price and suggesting there should be a turn back to the downside. As you will see in the Briefing, if you look into what is occurring on a shorter term timeframe, the Indices are beginning to show some strength.  Volume is increasing.  Breadth is moving higher.  Up volume is increasing and new highs are once again breaking out.  While inter-market divergences still exist,Read More →

Price development in the Stock Indices continues to want to go higher.  The problem with the current trend is the structure continues to weaken.  As you will see in the Briefing, unless more instruments that make up the Indices begin to participate in the rally, it will not be sustainable.  It is always a higher probability for price to correct to the internals.  However, I must state there is always a possibility the internals will correct to price but that is typically around a news event.  If and when the selling begins, I have outlined extremely important lower support levels.  If those levels are broken, theyRead More →

While the Stock Indices push higher in terms of price, market breadth continues to decline, new highs declined for the last three weeks, volume is declining, the volume weighted average price declined and there are glaring inter-market divergences.  The Indices tightened even more on Friday and it suggests there will be a large move in the offing.  Either the all-time highs are a false breakout that will be quickly retraced due to the deterioration of the internals, or the internals will strengthen to support price.  I suspect the probabilities of strengthening internals are very low.    This breakout move in the Stock Indices is very concerningRead More →

This has been a very active month for me.  A physical move and then issues getting my systems back up and running have proved challenging.  In any event, the July Newsletter, that should have been posted two weeks ago, is now available.  You can access it by clicking the link below. The Markets in Development NewsletterRead More →

The development of price in the Stock Indices is strong and wants to go higher.  Thursday saw the markets tightening, as discussed in the Briefing and the expected breakout came after the employment numbers on Friday.  At this point the upper limits of the S&P are being tested.  However, the Indices reached a point of being extremely overbought by the end of trading on Friday.  This suggests some type of rotation down to work off the overbought condition.  There is a chance traders will come back on Monday and feel the rally on Friday was overdone and selling could ensue.  However, how any rotation down developsRead More →

I spent a little extra time this weekend to give a trade lesson in analyzing the Stock Indices using price development and price structure.  I feel what is occurring in stocks is extremely important because there may be a large move coming.  In fact, a break of Friday’s range may give us an indication of the direction of that break.  The Indices, for over a year, have been unable to break above recent highs.  That failure has resulted in substantial rotations down and then another test of the highs.  Eventually, this will be broken and when it is, a large move will result.  It is more difficultRead More →

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