Thu February 18, 2010

Ten days ago I sent a link to the following chart:

http://www.eyield.co.uk/wavematrix/examples/ftse_1017.htm

At the time we were calling for a rally to 5300. The objective has been met and the rally is now running out of steam. I don't know how far prices will climb but I have a feeling a top is near.

The FTSE is moving towards an important resistance level because two of our timing indicators, 13-day BTI and Top 20 Differential, are near overbought. These indicators are very reliable, when they are overbought I am ready to go short.

On the FTSE 100, the pattern from the low at 5033 is an upward correction in a bear market. Prices have retraced 50% of the January-February decline which is a common retracement level for a counter trend. The next decline is about to start.

If you would like to subscribe to the FTSE short term forecast click on the link:

http://www.eyield.co.uk/paymentftse100.htm

Tue December 22, 2009

There is no need to be bullish unless you are a short term trader. The FTSE 100 may well climb past 5400 but early next year the trend will change, we could be near the start of a major correction.

Two markets that have helped the FTSE 100 rally from the March lows, the bank index and the dollar, are no longer behaving as expected, see:

http://www.eyield.co.uk/wavematrix/examples/banks091221.htm

The dollar has been too low for too long. Note the inverse correllation between the dollar and the FTSE 100 since march. The dollar turned down in early March and has been going down until early December. The sharp rally in the dollar should coincide with a turn down in stocks.

With regards to bank stocks, the correlation has been positive since March but take a look at the chart of the Bank index and you will note that banks made their highs in September while the FTSE 100 continued to make new highs after September. The relative strength line has been declining since August, an indication that bank stocks are no longer fuelling the FTSE 100 rally.

These events are major bearish developments but we may have to wait until January before the next bear market begins as in the short term the FTSE 100 could rally to new highs.

To receive regular FTSE short term forecast reports click on the link:

http://www.eyield.co.uk/paymentftse100.htm

Fri November 20, 2009

I spend a great deal of time researching UK stocks for our clients. The decision to trade is based my own strategy which is technical in its approach. No fundamentals, I only use market direction, my own timing indicators and Elliott wave analysis. Take a look at the recent trades since August:

http://www.eyield.co.uk/myarea/performance/ukselect_trades091118.htm

Note that I only trade blue chips. Why? Because they are the most liquid stocks and have a tight spread which is a requirement for long term profitability. The holding period is a few days to a few weeks. I can go long or short with CFDs, for example when my market forecast is down and the stock is topping and has completed an Elliott wave, I will go short. The following example illustrates this point:

http://www.eyield.co.uk/wavematrix/examples/RTO_101.htm

I went short and made 12.5% on Rentokil Initial in just a week. Take a look at the above table and you will see that since August I have made 40 profits and 18 losses. To give you an idea our portfolio is up 20% during the period.

To request further information, click on the link:

http://www.eyield.co.uk/form/managedportfolio.htm

Wed October 7, 2009

A bearish divergence between 34-day BTI and FTSE 100 is a negative development for the UK market:

http://www.eyield.co.uk/wavematrix/examples/divergenceneartop2.htm

The 34-day BTI is a directional indicator published in the FTSE short term forecast. When it's positive the FTSE is in bull market mode, when it's negative it's a bear market. The indicator is currently positive but since the end of July it's making lower lows but the FTSE 100 is making higher highs. This is called a bearish divergence, an indication that the rally will end soon, possibly in October or November.

If you would like to receive regular FTSE short term forecast updates, click on the link:

http://www.eyield.co.uk/paymentftse100.htm

Fri June 19, 2009

At last, a simple and effective way to trade the FTSE 100. No reports, no graphs, no in-depth analysis, no technical jargon ... Just BUY and SELL indicators whose remarkable accuracy are tribute to five years intensive research and development into FTSE forecasting. With proven performance of over 80% accuracy in the past 24 months, the term 'simple but effective' could not be better placed.

To see the system - please click here

To subscribe to the FTSE Timing Indicator, click on the link:

http://www.eyield.co.uk/paymentftsetiming.htm

To view the system, click on the link:

http://www.eyield.co.uk/wavematrix/ftse_indicator_test.htm

Sat March 28, 2009

After a long advance the S&P is losing momentum as shown by the declining RSI between 23 and 26 March. This is called a bearish divergence, a sign that the rally in the S&P is running out of steam. Sometimes near a top, a related market like the FTSE will underperform the main index. Here we can see this underperformance by using the relative strength between the S&P and FTSE. The rising relative strength in the last few days means the FTSE is struggling to keep up with the S&P, another indication that the S&P may be near a top.

As a general rule, a market turn will be accompanied by a divergence between prices and a momentum indicator. A divergence describes a situation when prices and the momentum indicator move in opposite direction. 

There are various momentum indicators that can be used. The most common are the RSI, MACD, OBV, Momentum and Price Oscillator.

The most important signal is given when the divergence occurs between the 3rd and 5th wave which signifies that wave 5 is nearing an end or, in the case of a correction, between the end of wave A and the end of wave C. In an uptrend the top of wave 5 is above the top of wave 3 but the momentum indicator is falling. In a downtrend the bottom of wave 5 is below the bottom of wave 3 but the momentum indicator is rising.

Thu February 5, 2009

Have you ever wondered why some traders are successful and others are not? I am not talking about traders with different strategies here, I am talking about two traders with the same trend following system. Trader A trades only at critical turning points whereas trader B trades in and out of the main trend. The difference between A and B is that trader B is doing more trades in the hope of producing a greater profit.

If trader B is an astute trader he could well beat trader A. The truth is, trader A is more likely to produce the greatest profit because he trades at critical turning points. These are key levels described in our FTSE short term forecast.

Critical turning points are trading opportunities with a high probability of success as defined by our indicators, 13-day BTI and Top 20 Differential. They don't come every day but when they do the chances of making a profit are high. Here is an example from our FTSE short term forecast:

The FTSE is approaching major resistance, so we alert our readers. Click on the link:

http://www.eyield.co.uk/wavematrix/jzx090127.htm

The next day our Top 20 Differential is overbought but the wave pattern is not yet complete. We move the critical turning point higher. Click on the link:

http://www.eyield.co.uk/wavematrix/lwq090128.htm

The next day the conditions are in place for a reversal. This is a critical turning point. Click on the link:

http://www.eyield.co.uk/wavematrix/ntg090129.htm

The decline is underway. Click on the link:

http://www.eyield.co.uk/wavematrix/cph090130.htm

These reports are delivered to our clients daily. If you trade the FTSE, the above example illustrates the importance of using our FTSE short term forecast for direction. Like many who are receiving our FTSE short term forecast (and the list is constantly growing) I am sure you will like what we do.

To subscribe to the FTSE short term forecast click on the following link:

http://www.eyield.co.uk/paymentftse100.htm

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