The State of the Trend

By: George Krum | Sun, Jan 18, 2015
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From a seasonal point of view, the year is divided into 15 weeks with strong bullish bias, seven weeks with strong bearish bias, and the rest with a weak or mixed bias.

The first week with strong negative bias is behind us and all the major averages are in the red for the year:

S&P500 Daily Chart
Larger Image

Seasonality suggests, however, that several consecutive weeks with strong bullish bias are to follow and are likely to set the tone for the next couple of months. For the bullish case, it is critical that the indices manage to break above the January highs during that period. An inability to do so, coupled with the absence of strong bullish seasonal trends during the second half of February and the beginning of March, will suggest that the bear trend is here to stay for several months.

An easy way to monitor the trend is to follow the interaction between price and weekly trend bars. Designed specifically to eliminate noise from random price moves, trend bars provide a novel visual and technical approach to defining trend:

Price and Weekly Trend Bars
Chart courtesy of OT Seasonal

Combining trend bars with seasonality offers a simple but effective way to avoid losses and let winners run.

 


 

George Krum

Author: George Krum

George Krum
www.citdates.blogspot.com

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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