The State of The Trend

By: George Krum | Sun, Feb 22, 2015
Print Email

In our January 18th article we concluded that weak seasonality is behind us and the markets are approaching several consecutive weeks with strong bullish bias. The seasonally strong period started on Monday, Feb 2nd (green shaded area). During the last three weeks all three major averages (GJIA, SPX and NDX) made new highs, with the SPX gaining a little over 6.5%:

S&P500 Daily Chart

The fly in the ointment is that the DJ Transportation average has failed to make a new high yet, thus manifesting non-confirmation with the DJIA.

Looking forward, seasonality suggests that during the next few weeks the averages should enter a sideways/down phase.

One of the easiest ways to follow the ebb and flow of price movement, without the associated noise and random volatility is to use OT Trend Bars™. They offer several advantages over Renko, Kagi, and Trend break charts, and are suitable for long and short-term traders alike. They can also help shed any ambiguity associated with the use of other traditional TA tools. OT Trend Bars™ not only show the direction of the underlying true trend, but they are designed to get longer when the trend gets stronger, and to get shorter when the trend weakens or is about to end, thus giving advance warning when caution is needed:

S&P500 Chart
Chart courtesy of OT Seasonal

In summary, the trend for the major averages remains up and will continue to do so until the January lows are broken.

By contrast, the outlook for gold does not look very encouraging. GLD is currently testing key support. A break below the 50% retracement of the '08 - '10 upswing at 113.6 will signal that the lower cascading pattern will continue to unfold, pointing to a first downside target of 92.925:

SPDR Gold Trust Shares Monthly Chart
Larger Image

SPDR Gold Trust Shares Weekly Chart

 


 

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.

Copyright © 2011-2017 George Krum

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com