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Posts Tagged ‘monthly’

Monthly key levels for April 2014

Posted by Danny on April 1, 2014

Here are our monthly key reversal levels going into April 2014. Remember, these monthly key reversal are only for long term market orientation. Try to invest mainly in the stronger markets (dark green) and take (partial) profits in markets that go to light green. Speculative buying can be done in the markets that switch from bearish (red) to mildly bearish (pink). A very patient long term investor can do well based on these monthly keys only, but for more optimal entry and exit points the weekly and daily key reversals can be used.

Monthly Current Mode Key (M) MoM (M) Months % Ch.
Nasdaq 4,198.99 3,461.22 9.21 52 94.20
S&P 500 1,872.34 1,578.04 8.27 26 42.66
Nikkei 14,827.83 12,822.68 7.86 15 39.83
FTSE 100 6,598.40 6,225.36 2.89 16 12.47
DAX 9,555.91 8,010.82 7.79 25 39.87
Bonds (TLT) 109.10 111.70 -2.38 9 1.61
Gold (spot) 1,283.76 1,446.26 -4.12 11 -13.04
$EURUSD 1.3768 1.3150 2.57 6 1.80
Oil (CL) 101.58 93.65 0.78 1 -1.38

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/

Comments:

* Monthly MoM is now turning down for Nasdaq, S&P 500 and DAX. It was down already for Nikkei and FTSE 100. So all major stock markets have now downward momentum. It can be months if not more than a year until monthly MoM turns back upwards. Until that happens we better be very cautious in the stock markets.

* MoM is turning up for Oil, which is bullish, but this market still needs follow through.

 

Monthly key reversal levels for other world markets:

Monthly Current Mode Key (M) MoM (M) Months % Ch
Australia (AORD) 5,403.00 4,860.44 4.54 17 19.13
Brazil (BOVESPA) 50,415.00 54,320.68 -2.26 22 -7.48
Canada (TSX) 14,335.30 12,786.98 4.89 14 12.51
China (SSEC) 2,033.31 2,255.74 -1.23 46 -21.12
Dow Jones Industrials 16,457.66 14,449.99 6.35 29 37.70
France (CAC40) 4,391.50 3,810.07 4.94 15 18.60
Gold stocks (XAU) 91.20 134.73 -4.35 27 -49.61
Hong Kong (HSI) 22,151.06 21,335.72 1.03 17 2.68
India (SENSEX) 22,386.27 18,799.74 3.91 18 19.17
Indonesia (JCI) 4,768.28 4,142.95 -0.23 57 135.25
Italy (MIB) 21,691.92 17,020.56 5.13 6 24.09
Malaysia (KLCI) 1,849.21 1,670.32 5.02 56 57.39
Mexico (IPC) 40,461.60 41,844.06 -0.87 1 4.34
Russell 2000 1,173.04 978.44 8.28 26 47.18
Russia (RSX) 23.99 28.00 -0.58 2 -4.27
Singapore (STI) 3,188.62 3,193.43 -0.63 2 5.88
South Africa (JOHA) 47,770.92 39,126.60 8.35 53 81.22
South Korea (KOSPI) 1,985.61 1,893.70 0.47 6 -0.60
Spain (IBEX35) 10,340.50 8,576.08 5.39 6 12.67
Switzerland (SMI) 8,453.80 7,343.32 6.10 20 32.11
Turkey (TUR) 48.68 57.67 -3.98 7 -1.85
Vietnam (VNM) 21.69 18.09 2.41 2 3.88

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/

Comments:

* Russia, Turkey and Vietnam have been added to the list with their main ETF ticker.

* No big changes except for Russell 2000, which is also seeing MoM turn down, indicating that it may have peaked out.

* A quick note for short sellers. Many people try to bet against a rising market only to be forced to cover their shorts on each subsequent rally. By the time the market actually peaks out they have no money left to bet against it. If you can wait until monthly MoM turns down from a very high level (above 8), as we currently see for the Russell 2000, Nasdaq and S&P 500, the odds for a bet on the downside will be much better. When that basic condition is in place, you just look for a favorable entry based on weekly and daily key reversal levels, for example when weekly MoM turns down as well, or when the market falls below a key reversal level. You want to have at least two different time frames agreeing with the direction of your trade.

 

Good luck,
Danny

 

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Monthly key reversal levels March 2014

Posted by Danny on March 1, 2014

Here are our monthly key reversal levels going into March 2014. Remember, these monthly key reversal are only for long term market orientation. Try to invest mainly in the stronger markets (dark green) and you will do well in the long term. Speculative buying can be done in the markets that switch from bearish (red) to mildly bearish (pink). For optimal entry and exit points we use the weekly and daily key reversals.

Monthly Current Mode Key (M) MoM (M) Months % Ch.
Nasdaq 4,308.12 3,412.06 9.17 51 99.24
S&P 500 1,859.45 1,561.13 8.22 25 41.68
Nikkei 14,841.07 12,688.73 8.35 14 39.95
FTSE 100 6,809.70 6,199.12 3.20 15 16.07
DAX 9,692.08 7,937.38 7.90 24 41.86
Bonds (TLT) 108.57 112.83 -3.26 8 -0.02
Gold (spot) 1,326.39 1,452.31 -4.66 10 -10.15
$EURUSD 1.3798 1.3092 2.44 5 2.02
Oil (CL) 102.59 93.13 0.74 0 0.00

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/

Comments:
* Oil has closed above its key reversal level and is now long term bullish again. But the move is suspect as the MoM for oil is still going down. This could prove to be a fake out move, so be careful.

Monthly key reversal levels for other world markets:

Monthly Current Mode Key (M) MoM (M) Months % Ch
Australia (AORD) 5,415.40 4,821.93 4.70 16 19.40
Brazil (BOVESPA) 47,094.00 54,929.98 -2.23 21 -13.57
Canada (TSX) 14,209.60 12,620.53 4.07 13 11.52
China (SSEC) 2,056.30 2,278.28 -1.07 45 -20.23
Dow Jones Industrials 16,321.71 14,311.70 6.42 28 36.57
France (CAC40) 4,408.08 3,779.80 5.02 14 19.05
Gold stocks (XAU) 99.55 137.65 -4.91 26 -45.00
Hong Kong (HSI) 22,836.96 21,360.86 1.41 16 5.85
India (SENSEX) 21,120.12 18,601.30 3.42 17 12.43
Indonesia (JCI) 4,620.22 4,107.46 -0.80 56 127.95
Italy (MIB) 20,442.41 16,713.16 4.36 5 16.94
Malaysia (KLCI) 1,835.66 1,657.89 5.20 55 56.24
Mexico (IPC) 38,782.89 41,947.32 -0.55 0 0.00
Russell 2000 1,183.03 964.94 8.29 25 48.44
Singapore (STI) 3,110.78 3,193.35 -0.54 1 3.30
South Africa (JOHA) 47,328.92 38,723.71 8.27 52 79.54
South Korea (KOSPI) 1,979.99 1,890.95 0.59 5 -0.88
Spain (IBEX35) 10,114.20 8,457.48 5.21 5 10.21
Switzerland (SMI) 8,475.30 7,291.81 6.34 19 32.44

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/

Comments:
* Mexico (IPC) has fallen below its key reversal level and is now long term bearish.

Good luck,
Danny

Related articles:
Monthly key reversal levels February 2014

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Monthly key reversal levels

Posted by Danny on December 2, 2013

The start of a new month is always a good opportunity to take a look at longer term charts and indicators. While monthly charts do not give new signals very often, they can be very significant because monthly trends often continue for years.

The key reversal levels I have been sharing on a weekly basis also work on the monthly level. These key reversal levels are not moving averages, they are calculated quite differently. These key levels are also not forecasts, they just summarize where the market is right now and in what direction the momentum is going. They are to be used for market orientation. It is well known that trades in the direction of the main trend have better odds of being profitable.

It is important to know that on average these key reversal levels get crossed every 20 bars (on a closing basis). So, 20 days, 20 weeks, 20 months,.. depending on which timeframe is being considered. Some moves will be only 1 or 2 bars long, which means a quick turnaround and being stopped out at a loss. But you will also see a lot of cases where a market remains above (or below) its key reversal level for 50 or more bars. Twenty bars is the average and that’s useful to know, because when a move stretches beyond 20 bars then we know it is an aging rally/decline, or an aging bull/bear market (for monthly bars).
In comparison, if a 30 bar moving average is tested, then on a closing basis it gets crossed every 11 bars on average. This means that the key reversal levels can keep us in a trending move more effectively, and for a bigger portion of profits.

That’s enough background info for now, more will be coming when I have completed the materials to explain the use of key reversal levels in more detail.

Here are the monthly key reversal levels going into December 2013:

Monthly Current Mode Key (M) MoM (M) Months % Ch.
Nasdaq 4,059.88 3,247.76 8.69 48 87.76
S&P 500 1,805.81 1,511.06 8.23 22 37.59
Nikkei 15,661.87 11,983.40 8.35 11 47.69
FTSE 100 6,650.60 6,119.14 4.69 12 13.36
DAX 9,405.29 7,572.45 7.08 21 37.67
Bonds (TLT) 104.45 114.32 -3.81 5 -3.81
Gold (spot) 1,252.50 1,508.11 -5.32 7 -15.16
$EURUSD 1.3591 1.2960 2.05 2 0.49
Oil (CL) 92.72 101.77 2.02 0 0.00

(Legend: Mode: green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | MoM indicator: green = rising, red = falling | Months: months since start of current bullish or bearish mode | % Ch: percent change since start of current mode | yellow box: changed direction)
(for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )
(for information about the MoM indicator, see: https://lunatictrader.wordpress.com/2013/09/14/mom-indicator/ )

A few notes:

* The Nasdaq has been above its monthly key reversal level for 48 months and counting, so that’s an aging bull market. Of course, that’s not news for most of us.

* For the Nikkei and FTSE 100 we see a pale green box because their momentum (MoM) is going down. The continuation of their bull markets is currently in question.

* Crude oil has closed below its monthly key reversal level in November, so it gets marked as month zero of a new bear market. We don’t know whether it will stay bearish for 1 month or for 50, but we do know that the average is 20 months. It will take a monthly close above the key level ( $101.77) to turn oil bullish again.

And here are the monthly key reversal levels for other major markets:

Monthly Current Mode Key (M) MoM (M) Months % Ch
Australia (AORD) 5,314.30 4,738.41 6.16 13 17.17
Brazil (BOVESPA) 52,482.00 57,210.12 -2.73 18 -3.68
Canada (TSX) 13,395.40 12,314.97 2.61 10 5.13
China (SSEC) 2,220.50 2,317.07 -1.34 42 -13.86
Dow Jones Industrials 16,086.41 13,932.41 6.74 25 34.60
France (CAC40) 4,295.21 3,687.97 6.36 11 16.00
Gold stocks (XAU) 86.46 151.16 -6.30 23 -52.23
Hong Kong (HSI) 23,881.29 21,190.47 1.82 2 3.84
India (SENSEX) 20,791.93 18,114.95 2.82 14 10.69
Indonesia (JCI) 4,256.44 4,081.06 0.74 53 110.00
Italy (MIB) 19,021.48 16,050.78 3.29 2 8.81
Malaysia (KLCI) 1,812.72 1,619.23 5.68 52 54.29
Mexico (IPC) 42,499.13 39,195.16 -0.70 52 56.97
Russell 2000 1,142.89 923.15 8.46 22 43.40
Singapore (STI) 3,176.35 3,037.30 0.96 16 4.61
South Africa (JOHA) 44,975.67 37,626.23 8.13 49 70.62
South Korea (KOSPI) 2,044.87 1,883.17 0.59 2 2.37
Spain (IBEX35) 9,837.60 8,083.23 3.80 2 7.19
Switzerland (SMI) 8,264.20 7,137.30 8.01 16 29.14

(Legend: Mode : green = bullish, pale green = weak bullish – may have peaked, red = bearish, pink = mildly bearish – may have bottomed | Key: key reversal level | MoM indicator: green = rising, red = falling | Months: months since start of current bullish or bearish mode | % Ch: percent change since start of current mode | yellow box: changed direction)
(for more details about these key levels, see: https://lunatictrader.wordpress.com/key-reversal-levels/ )
(for information about the MoM indicator, see: https://lunatictrader.wordpress.com/2013/09/14/mom-indicator/ )

* A lot of countries have aging bull markets. Of course, that doesn’t mean they have to end soon.

* China has been in a bear market for 42 months, but MoM is turning up and a monthly close above 2317.07 would turn it bullish. Keeping an eye on this one.

* Gold stocks are down 52% in the 23 months since they fell below their monthly key reversal level. So, this is one to watch as well. The monthly MoM for gold stocks index is at -6.3, which is the lowest it has been in over 20 years.  If its MoM turns up then we are likely to get a nice rally.

* Notice that all covered markets show a positive (green) %change in the direction of their market mode. So, all monthly signals are profitable at this point. That’s not always the case, but it shows the merits of going with the long term trend. It takes an extremely patient and courageous investor to stick to positions for such long times, but the rewards can be great. Day in day out we are being fed with news and information that scares us out of stocks. How many stocks in your portfolio have been owned for more than 3 years? If the answer is none, then it may be a good idea to switch off the news media and take a good look at monthly charts more often.

Good luck,

Danny

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