BLX: Bear market phase...Last portion of historical data covered here, this is the analysis for the bear market since the 2013 top.
Mad props to @timwest for coming up with this methodology/witchcraft...
Cheers,
Ivan Labrie.
Timeatmode
A primer on Key Earnings SupportIn this chart I'm illustrating a few trading setups that took place in $MCD following each earnings report for a year. The indicators you see in the chart are 'Average True Range' and 'Earnings Price Support' from @timwest's 'Key Hidden Levels' indicator pack.
Every time a company reports earnings, analysts, investors, portfolio managers, traders, you name it...are paying close attention on the data that comes out, and the prices that the stock is trading for at all times, this normally starts one or several days before the report, and lasts for a day or a couple days after the report. The indicator my mentor devised plots a technical level that helps us map how far prices can move, and where to seek low risk trading opportunities on subsequent retests of past reports' levels.
I use the ATR indicator to define the size of the stop losses that I use, which in turns helps me know how many shares to buy or sell when trading with this tool. To use this you need a method to determine the main trend direction, which can be fundamental or technical, or a combination of both. Time@Mode is the one @timwest created, and the one I use, which together with the proprietary indicators from the 'Key Hidden Levels' suite helps me find low risk trades that have a very good batting average.
Hope you found this post helpful, and if you did, check out my site here: www.fb.me
I offer trading signals since 2015, covering all markets I trade, or focusing only on specific markets according to each client's needs.
Cheers,
Ivan Labrie.
EURJPY: Time at mode trend signals$EURJPY is close to flashing an uptrend signal here, maybe in a day or two. If price breaks up forcibly by then, this signal might trigger leading to a rally to the box target on chart, in the time duration of the box or less. Once the target hit, it could be the top, and price come back to today's low area again, in roughly the same time as the box duration is, OR, price could form a new range, and a new box, surrounding the highest activity level from which a new trend signal will take off if price holds up after this rally ends.
If that were to be the case, we would be in the presence of a strong trend. For now, trend signals are reversed after they reach their targets, meaning that the market is range bound in the weekly, and daily, and only trending in shorter term periods.
Cheers,
Ivan Labrie.
Broad market update: DeleveragingI think we might be about to see deleveraging in the market, judging by the action in the yen, together with Gold rising on falling $VIX, while $SPX peaks, but fails to advance further after $VIX fell slightly. I suspect mid term election woes plus all the barrage of bad news related to trade wars and other topics might push investors into cash. Personally I've sold all my holdings except for my positions in gold and $TSLA, and will look into rebuying once a bottom is clearly spotted in the broad market.
For now, I will focus on determining if this thesis is correct, and if so, look into maximizing my gains in the gold rally that might emerge from here.
Gold hit a monthly support level, got oversold, whilst being in a monthly uptrend and flashed a huge buy signal from the Commitment of traders report data, whilst the daily trend ended, forming a potential reversal setup. Risk/reward is optimal on the long side now. I will scale into the trend as we get more and more confirmation and other trend continuation signals later on. Targets for it are as high as 1550, if we confirm a monthly T@M signal eventually.
Cheers,
Ivan Labrie.
BLX: Monthly view, and initial 2013 top...Very interesting how these trends panned out, with a more complete data set we can see that a target zone between 950 and 1850 was established as a potential topping zone well in advance while the price was close to $100...
Time @ mode analysis of multiple timeframes, using the system's rules would have let you ride most profitable segments of the trend and avoid drawdowns moving to cash efficiently when needed -or going short-.
I haven't included lower than weekly data but we also had multiple signals in the daily-3-day timeframe charts that would have given us additional details and precision. Adding in emotional signals/sentiment data, and fundamental analysis and factors, like key hidden levels of support and resistance from fundamental events, among others, the picture becomes even clearer.
Cheers,
Ivan Labrie.
BLX: Great historical data - Time at mode breakdown of BitcoinI'll cover all the main weekly, monthly, and bimonthly trends in $BTC, using the $BLX chart, which very interestingly contains historical data older than what Bitstamp offered until now at Tradingview. Great addition!
You can see how the trends work, and how Time @ Mode would have let you ride them all with great precision, and specially, told you 'when to fold 'em' right before huge drawdowns.
I won't get into too many specific details about how to combine these techniques and timeframes systematically to find the key turning points since that is the secret sauce of this method, but will illustrate some of the main signals we had over the years.
Cheers,
Ivan Labrie.
XBTEUR: To the gamblers, latecomers, and bubble chasersI think it's a good time to reevaluate divesting from crypto once again. We have considerable risks, yet no one even bothers thinking about them. Anyone aware of fundamentals knows that we can see some nasty scenarios in the coming weeks and months. I would reccomend taking a break from crypto, and for instance, holding only 25% of your capital in it, be it in the shape of some cryptocurrency or cash at exchanges. The former induces risk from potential volatility to come, the latter, from 3rd party risks. Either way, it is a risky proposition, so however you look at it, try to use reason, and not emotions to decide how to protect your wealth. Upside vs downside risk favors being in cash, or even short. Fundamental risks, and sentiment extreme in BTC, and the broad crypto markets make me think the technical setup is likely to materialize, and that we can get a correction any time soon. Perhaps after June 16th, since that is the earlierst known date where we might encounter 'scaling risks'. After August 1st, some risky scenarios might ensue, some of which could cause difficulties to exchange operators, and all of which can cause this market's value to decrease significantly.
The technical chart called for a rally to 3000 euros, by the end of Dec 2017, or sooner. In this case, I could assume that we have two main scenarios going forward:
#1: The time duration of the rally is valid, and we get continued upside. This doesn't imply a correction won't happen. The market can take many detours before finally topping by year end. Sentiment and shorter term signals would be our guide, to navigate trends while risk/reward is positive in the short term and sentiment still negative or neutral. Sentiment is extremely bullish now, which is a contrarian signal and a cause for concern for any astute investor. In this positive scenario, we get a healthy correction during this time and going into August events, and maybe lasting for a while longer until sentiment resets, everyone panics and we bottom in the weeky timeframe again. Then we launch into a rally for the duration of the year again.
#2: This was IT, the crypto bubble peaked, we get a nasty 2 year+ correction or consolidation akin to 2013 to 2015. If this is the case, which I fear might be, we might never hit the 3000 euro mark or we hit now before the time expires for the long term rally. This could easily form a top any time soon, and the fundamental events to come would exacerbate the selloff causing the newcomers to lose all their money, longs to get margin called, maybe some exchanges to go bust, and then get a continuous chain of negative events, and increasingly negative sentiment...some possible events include problems after the scaling solutions are implemented in BTC, ETH facing technical design problems that cause the rally in it to peak and massively decline back to monthly support at 11 eur after PoS gets delayed again, China to regulate ICOs, maybe harsher regulations take place broadly accross crypto markets globally, etc.
People should be wiser investors, and not gamblers who chase momentum. This never ends well, or at least is not a wise investment strategy. The insanity in sentiment has made people very critical of my work, I get ridiculed, insulted, mocked often. When all is said and done, I might be proven right, to the permabulls dismay.
Disclaimer: I think BTC and cryptocurrencies are of tremendous utility in the world, and a new asset class in their own right. I would like to maintain 25% exposure to this market at all times, but it's wise to diversify into 3 other asset classes to store and grow your wealth. (local and foreign stocks, bonds/gold/silver, cash, real world businesses/passive income sources). Specially after a huge win in one market, pour the gains into equalizing your exposure in other fields.
ETHEUR: Long term view, chart of all chartsThis is how the Ethereum chart looks, plotted against the Euro using Kraken data. It has been the most reliable instrument to perform analysis on this pair, together with $ETHBTC from the Poloniex feed. Currently, we are tracing a daily, weekly and monthly uptrend. Periodically, smaller timeframes might be in a consolidation or retracement phase, to then rejoin the big picture trend in the monthly.
Right now, we can anticipate higher prices all month, courtesy of the daily and weekly signals depicted in yellow and turquoise. This weekend is loaded with fundamental events that can further boost this rally, so I think it is logical to see $ETHEUR hit the daily and weekly top target zones in time or even earlier than expected.
After the time expires for these signals, we could commence a consolidation phase, which can take a myriad of shapes, and isn't predictable yet, other than on a time duration basis. Normally, the market will absorb supply from profit taking, which takes a proportional amount of time to the rally itself, so it is logical to observe what Tim West has noted in his 'Time at Mode' proprietary method. So far, this methodology has served me well, and I would be glad to share the benefits of it with people interested in trading these powerful trends. Tim is working on new material currently, you can pm me or him to learn more about it.
Now, on to the trading reccomendation aspect, if you're long, consider average volatility to determine your position sizing. During a trend, it is reccomended to gain exposure, and while consolidating, trimming it back down, or outright taking profits. Don't risk more than a 10% drawdown on a worst case scenario basis if trading long term, it will be hard to recover otherwise.
Keep your coins safe in hardware wallets like the Trezor or Ledger nano, and make sure you do your due diligence when it comes to cybersecurity, and exposure to centralized exchange risk and margin trading.
Good luck,
Ivan Labrie.
Educational piece: Importance of the highs, lows and closesIn this chart I graph the Aussie dollar in an alternative way. I've hidden the bars and I'm only showing weekly ranges, daily closes and lines corresponding to key levels, both from the options expirations and from other key fundamental events, like the last rate cut in the Aussie and Brexit.
The key take away is: people think in levels. People don't think in trendlines, people don't think in moving averages, the common denominator is levels. There are moments, where the most people pay attention to an instrument, and those events generate shockwaves, which mark lines in the sand, which continue to affect prices, making them gyrate between the levels generated by them.
You'll see many people say: "The USDJPY will go back to 100" or "S&P500 will go to 1500", "oil will go to 40", "oil will go to 55" but you won't hear them say "EURUSD will go back to the 200 EMA line", outside of technical circles that is. Very rarely people think in those terms. For example, people in Argentina, think about the value of the peso in dollars, it's easy to remember a price, not so much a more complicated construct, let alone a trendline that demands they have graphical depictions of historical prices at hand.
Ok, the idea here is, since the most people pay attention to prices, specially during key events, the levels give us reference points, and important prices like the high, low and close of each day, week, month, quarter and year give important clues to us.
If you look at the line showing the close of each day, you can see how despite price moving higher than levels, many times the close ends up being lower when resistance acts. You can also see the weekly highs and lows, paying attention to the boxes. See how when a level is taken over, price will form a higher LOW on close before moving higher, or viceversa while moving down.
Something as simple as waiting for the daily close, and examining the levels can give us tremendously useful cues for our analysis of price action, this is just one of many elements we use to decipher price action.
The purple dashed lines show the 'waves' in a way, how prices form a definitive lowest high, before turning up, and viceversa when turning down. This is very important, and you can see how the top of each move usually aligns with how the highest low is related to the key levels on chart.
Now, contrary to what some people would say, the 'support and resistance' levels we have here, are not randomly picked, but logically selected based on key fundamental events that drawed massive interest in the instrument at hand. We don't need to be rocket scientists to see this in the price chart, we simply need a keen eye and dedicating time on improving our analytical skills to find useful patterns.
Some of that work, I share with you today.
I hope this is interesting and can open your eyes to how price action and markets operate. It is logical, and not the result of mystical forces, complicated equations or complicated systems that attempt to analyze the whole chart and fit a living, breathing being, into a cold shell. That's simply not how markets work.
You can refer to my other chart, and read the document I attached to it for information on behavioral finance concepts.
My mentor Tim West came up with really powerful tools, and profitable proprietary trading strategies to help us navigate these waters, if you're interested in learning more, contact me for more information.
Cheers,
Ivan Labrie.
Dollar rally: A tutorial on relative strength analysisHi traders. I'd like to share a few tips, that many traders ignore (I'd dare to say most).
If we compare the different dollar pair's performance over different time periods, we can glean important information, as to what cross pairs to trade, and reap some nice uncorrelated to oil, DXY and stocks returns. This is one of the advantages of including Forex in your trading portfolio and strategies.
In this chart, we take a look at a 5 week line chart of all dollar pairs. We can see that some started the week up, and went down, and only one closed up for the week (GBP). Out of all the pairs that fell, the ones that fell the most are the most interesting ones to short. We can look to short them against the dollar, to ride the main fundamental trend, kicked off by the Fed today - or we can look to trade cross pairs, taking advantage of the Pound's fundamental edge over the rest, as evidenced by the relative strength chart.
The idea is simple, go to the GBP cross pair charts, and find the most optimal technical setups to build your long GBP portfolio.
I'll leave that part to you, feel free to post your setups in the comments section, and I hope you find this technique useful.
There's more to this process, but I'll leave the extra bits of information to my trading students. This is already a great start to improve your Forex analysis and trading results, and stop wasting time looking at endless amounts of charts every day.
Cheers,
Ivan Labrie.
Ps: Check out this link, you can see Forex daily/weekly/monthly performance ranking of all currencies.
www.finviz.com
Gold: Monthly downtrend and wave countI decided to expand on my gold analysis with the help of rgmov and neowave concepts.
I think that the monthly downtrend is still valid, and that we will visit the projected target at 913.82 in time, which might validate the wave count on chart.
I entered a pending order and got filled for a short at 1129.15, and SL at 1140.56, and also entered a sell stop at 1116.32, and SL at 1156.66. My 3rd pending was a limit sell at 1134.85 but didn't get filled yet (same stop as the 1st at 1140.56).
The optimal entry was highlighted in my previous publication, a short at the top and SL at 1171.89, which I sadly missed!
I'll update this publication with the daily chart as we progress.
I've been discussing these ideas with @look4edge, @ncoulb1, @sokow and @jangseohee. Make sure to check out their works.
Feel free to comment to enrich this discussion, and good luck if going short!
Ivan.
