Friday, November 30, 2012

Gold Weekly

Below is a weekly gold chart. The basis of the chart is the initial thrust from the 2008 low and January 2009 initial high pivot. Some observations.
  • the 3x2 fan line from the low seems to be the operative support resistance ratio.
  • the stars mark where gold has been supported by the 3x2 line.
  • gold dropped below the primary 3x2 line in April 2012 and declined to the 1st harmonic 3x2 below the primary 3x2--new support
  • the latest rally found resistance at the primary 3x2--new resistance: a further sign of weakness.
  • currently, gold is testing the harmonic 3x2 as it did earlier in the year. A break of this 3x2 harmonic would suggest lower prices--perhaps the next lower 3x2 harmonic.
  • Check out the first 3x2 rectangle--prices were relatively nearby the bottom right corner. check out the second 3x2 box--once again prices were close to the bottom right corner.


EURO-US$

Here is an example of the geometric technique by subscriber "Dolemite". His insights into markets is phenomenal...he has contributed greatly to the work I do.

Note the low @ 'X' where AF and BC intersect...and the top where AF and WY intersect.

Click here for Dolemite's updated chart

Thursday, November 29, 2012

USDX Harmonics

I was recently asked to explain my charts and how I would use them as a trading tool.
The chart below of the US $ encapsulates pretty much what I look for in the squaring of a pivotal advance or decline. I hope this is somewhat coherent:
  • The entire geometric structure is based on the decline AB--which is used to form the square ABCD. It is hypothesized that all pivotal movements in markets are related to each other in a fractal nature...that the characteristics of significant pivot will effect the behavior of future market activity. In this example I use a previous decline and project the geometry forward. It is also effective to 'square' the first impulse wave of a trend..the first wave of this years advance in Feb-March 2012 would be an example of a rally that could be extended forward geometrically. If a projected decline and advance show signs of harmony this becomes an incredible powerful tool.
  • The square is duplicated and extended out in price and time. Square CEIF is an example of the progression of square ABCD
  • The next step is to take the diagonal of ABCD (DB) and form a square DBEF. The squares project forward in a geometric expansion based on the diagonal of each successive square forming the pattern 1, 1.414, 2, 2.828, 8......The squares are color coded on the chart.
  • As the grid begins to take shape the corresponding harmonic angles are formed, such as 1x1, 2x1, 3x2, 1x2....
  • In the chart below note what has happened at points C, F & I. Prices were near these intersections (corners of the primary red square. (time-price harmony). Points C,F & I were also at or near major pivots in the USDX chart. (Pt. C being an acceleration) Follow the path A-B-C-F-I-G. Where are prices at those points?
  • D-F-G is providing support resistance while its 'root' A-C-I is also delineating support and resistance.
  • Note the center points of each progressively larger square--what do prices do?
  • Note BF || EG  &  BD || EF || HG

SO what does this mean NOW? 

  • The USDX is entering an important time price harmonic--Pt. G) The market has progressed 3 primary (1.00) squares, 2 green (1.414)squares and 1 blue (2.00) square.
  • Prices have touched the harmonic fan lines as they approached pt. G
  • HG is proving support but EG (2.00 square) has been violated similar to the break in October. Resistance is formed by DG, AG, BG (root points of each progressive geometric square)
  • If 80 is broken prices are likely to continue to decline, however the USDX could quickly rally to pt. G over the next few sessions to form another price-time harmonic. (represents a larger break than the October break in prices)
  • A clear and decisive break above point G would support the case for higher prices ahead.
  • A sharp rally to point G over the next few days would be pretty incredible to watch materialize.
Bottom Line: Market geometry is suggesting that an important time-price harmonic is nearby and the market is likely to react in a pivotal way--or an acceleration. At this point traders should do the following:
  1. Assess portfolio for computation of risk-reward scenario to determine size of position (# of contracts based on acceptable loss amount (% of portfolio) to undertake. (money management is the most important aspect of trading)
  2. Monitor your favorite trading tools: RSI, MACD, Candles, Bollinger Bands.....
  3. Set up an execution plan--void of emotion--at stick to it.
Here is an example of a PHI based geometric projection.


HOPE THIS HELPS

TRY THIS: Stare intently at the chart and visualize some of the three dimensional  shapes. The patterns of the market will become significantly clearer. Picture the structure as a multi-faceted diamond.

Monday, November 26, 2012

S&P Update


The Pebble Effect

H/T 'Dolemite'

The concentric circles are based on the decline AB. Note market behavior at arrows.
The following radii were used.
AB, AC, AD...AH


Pebble Effect based on 1st wave off June 4th low: AB


Friday, November 16, 2012

S&P Update

S&P 500

  • are lines  based on AB
  • AB = CF
  • BC = FG
  • CG = DH = EI

 Dow Transports


Tuesday, November 13, 2012

USDX

USDX
  • all lines are based on advance AB
  • CD is parallel to AB
  • FE is parallel to BC
  • BE is parallel to GC
The resolution of trend expected at point E should indicate the likely S&P/Gold action as well. if US$ up : then S&P | GOLD down


Monday, November 12, 2012

S&P 500 Approaching an important trendline

S&P 500

  • squares based on AB (the first leg from the 2009 low)
  • S&P has held above support provided by the 2x1 AE
  • 1x1 BE intersects 2x1 AE at current price levels but time does not intersect until January 2013. ( possible time for a major low and end of intermediate cycle bear campaign)
  • Note intersection of previous fan lines highlighted by arrows.


Thursday, November 8, 2012

S&P 500 Update

Weekly Chart


geometric fan lines from October and June lows.
  • 45* = 1pt:1day
  • 36* = 0.726/day
  • 30* = 0.577/day
Gann 180-360* from September peak 1474.52
  • 180 : 1398.71
  • 360 : 1324.91
  • 540 : 1253.11
  • 720 : 1183.32



Daily Chart 

  • Square BCDF is based on AB. ( BC = AB)
  • 2x1 from A is converging on 1x1 from B
  • Circle radius CB is containing price levels since market broke CE (2x1)
  • breaking below 1350 without a bounce would be very bearish and may lead to significantly lower prices sooner than later.

Tuesday, November 6, 2012

Thursday, November 1, 2012

The Nifty 50

There have been several requests from Indian subscribers to do some geometry on the Nifty 50. I have posted a weekly technical chart and a daily geometric chart. I will endeavor to make periodic updates on this market--which I think has INCREDIBLE growth potential long term.
  • diamonds are major pivots (and horizontal S&R levels)
  • Market is retreating from a weekly RSI overbought level.
  • breaking above the 'double resistance point' would be VERY bullish although a time-price correction is currently underway.

The daily geometric chart does not 'fit' that well since none of the harmonic lines of the square are providing support-resistance or delineating pivot points...although the corner of the square (point C) was fairly close to the time period of the October high (natural time-price square). The bottom of the initial square (green line BC) seems to be the midpoint of the May-Oct  rally. The parallel (red and green) lines should provide support and resistance.

Here is a harmonic based on the SQRT of 5 (2.236)
  • Triangles ABG and BDC are based on the rectangles formed from the 2x1 diagonal of square ABCF
  • AG = 2.236xBG   and  BD = 2.236 CD
  • The circles formed from radii AG and BD seems to resonate with price time patterns.



Testing the 200 day moving averages.