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The first two pages contain charts that measure perceptions of the overall markets. The main equity indexes (S&P500/ Dow Industrials/ Nasdaq) and key measures of bond markets, the TED Spread, Gold, Currencies, and special ratio charts in the special 'Ace way' that makes things clear and simple to see.
The 10 major Sector SPDR ETFs are tracked with Ace's favorite trend indicators and oscillators! If one understands the trends and cycles of these charts, then they will have a very good grasp of the major rotations of the smart money traders. These charts show up on Page 19 of my Chart List and their symbols begin with the letter 'X'.
The second new feature is a hand-picked selection of the IBD 50 stocks. I use many of my favored indicators on these DAILY charts, including the dynamic 13. 50, 100 and 200 MA lines. (IBD usually shows WEEKLY charts-- you can see DAILY here!) I show the proper bases on these charts as base theory is critical in the IBD 50 stock selection and CANSLIM systems. Of course, IBD 50 and CANSLIM are successful trading systems developed by Investor's Business Daily. These charts start on Page 10. I am not associated or affiliated with the IBD in any way and my charts are strictly my interpretations, Please visit their website to learn more at www.investors.com .
Finally, I have added a section known as 'the Internet of Things.' These are the 13 wonders identified by many investors as the key stocks leading the internet revolution as we enter the middle years of the 21st century. Now, track these stocks with me beginning on Page 12.
* IBD 50 and SPDR Select are trade-mark names; I claim no association with the vendors of these products. My chart interpretations are strictly one person's opinion of publicly traded stocks.
12/22/2018: This weekly 12 year chart of the NYSE Advance-Decline line as measured by the 5 week EMA, 40 week MA and 80 Week MA lines shows that the 2018-19 Correction is quickly turning into a rival of the 2008 Financial Crisis and the 2016 Severe Correction. Of particular note is that the 80 week line is dipping down at a hard angle which was not all that apparent in the 2008 Financial Crisis. A steep decline in the A-D graph represents liquidity drying up as the FED takes away the punch bowl and Trade Wars grow stronger as they did back in the Great Depression years of the 1930s.
TICK is a market pro's tool for monitoring the under-lying strength in the US stock market. $TICK specifically measures the number of up-tick trades against down-tick trades on the NYSE. By itself, the TICK patterns can be difficult to discern due to high volatility from minute to minute during the trading day. I have developed a smoothing mechanism which helps the viewer to see any trading strength patterns more clearly. From time to time, I have to adjust the trigger trip lines due to the amount of volatility in the markets. In May 2014, I had to adjust the lines inward (closer to the center) due to the lack of volatility (this can be compared to the low readings in the CBOE VIX index). When the overbought lines are reached, then it's time to take profits for day traders and also a good way for investors to maximize their profit-taking exit points. When the TICK is oversold, that means day-traders should consider buying and investors can find good entry points. When TICK is above the zero line, the market is generally going higher. Note that on days of extremes, the buy and sell signals may not always seem to work. As always, this indicator is one among many to watch, and in itself, should not be used as the only indicator upon which to make trading decisions. Always consult with your licensed broker or RIA before investing. I do NOT claim to be an investment advisor and my comments and charts are strictly for educational purposes only.
There are actually two lines to watch on this $TICK chart which updates every 5 minutes during the trading day (though the chart is on a 15 minute delay for viewers). The two lines to watch are the purple (thin) line which is the 8 EMA line and the other thicker line is the 21 EMA line (green). The purple 8 EMA line is the FAST LINE, and this line helps the trader to tease out fast movements within the TICK. The 21 EMA line is the SLOW LINE, though that is a relative term as the SLOW LINE is still capturing the fast rhythms of the market for many trader
I have long used the pSAR trip signal on BPNYA as a good, simple buy or sell signal. I use this signal in conjunction with other charts, but for those who are looking for a good, simple signal for the health of stocks, this might be it! Also of note is that when a trend gets going, the 13 EMA line seems to work quite well as support in up-trends and as resistance in down-trends.
Weekly chart for West Texas Intermediate Oil
UPDATE: on 4/12/16 Break-through of down-trend wedge line is bullish for both oil and stocks. See daily chart for more precise positions, resistance and support lines.
UPDATE on 3/28/2016: The Weekly Chart shows WTI trying to break up through a steep down-trend line (blue-dashed), but so far, the strong resistance of that down-trend line is holding. OIL is at a crossroads--depending on how it breaks, will likely determine the direction of equities and commodities in the next few weeks. One can see that if WTI should break higher, that the next key resistance area would be $48. See the daily chart for more precise day-to-day projections.
This chart is designed for INVESTORS, not traders. Using the popular Nasdaq 100 Index, there are certain buy-sell signals I watch for in terms of LONGER TERM TRADES or INVESTMENTS. This Index should offer good clues as to when to be long in the market....and when to exit or go short the market.
The 13-50 moving average crossovers are one such signal--this crossover serves as the accleration signal on my Mo-celerator charts, but it is also an important buy signal for INVESTORS who don't want to chase every short term signal.
Also, I watch for the 13 day EMA line on the Chaikin Money Flow (CMF) Indicator with the CMF set at a 34 day lag on INDEX charts. I have found over time that when the 13 ema line on this graph crosses above the zero line, that this serves as confirmation of stronger, longer trend. It works especially well to the long (buy) side, and a negative crossover is often 'a final get out' signal if somehow you have not listened to earlier exit signals, which many investors do not do because they don't want to miss the next surge higher....I understand this as part of my portfolio is invested for the long term too.
Also, the Dynamic chart shows the Accumulation-Distribution (A-D) line with a 13 day EMA line...the crossovers on the 13-dma serve as an additional tandem confirmation along with CMF as to whether money is flowing into the momentum stocks of the Naz 100....or flowing out. Often, the 13 ema crossover of the A-D line will occur before action shows in the CMF, because CMF captures heavy money moves, while A-D captures the early trend setters whose cash flows are not easily detectable. The CMF then serves as a confirmation of the early trend-setters' A-D signals.
Finally, my charts always include the ADX graph, which is 'the holy grail' graph for me. For investors, the signal to watch is at least a 5-pt move of the black ADX line in the direction of the new trend...once you have a 5-pt move, the trend is considered solid and firm for investors. 7/14/12
UPDATE on 7/29/16: I just concluded a quite successful short trade on USO as the WTI OIl chart reaches my intermediate target at the 200 day line. Will wait for the bounce to play on out on oil, before looking to short USO again. Mike
May 16, 2015 Update: TICK 40 week lag line hits a multi-year low! The last time it did this was only 3 months before the 2008 Financial Crisis threw its full fury at the markets. We are there again, according to this measure? Does history repeat??? or is this time different? One should never look at one signal in isolation, but this 40 week bottom does make one think twice! Keep in mind you won't hear or see about this signal anywhere else but here! -ACE
This is another ACE exclusive. You won't find a chart like this anywhere else. The NYSE TICK 40 Week Channel and Line has proven to be a forecast model of market tops and bottoms by up to 2 to 6 months in advance. Tops in the Channel predict market tops--Bottoms in the Channel predict bottoms. The 4-40 crosses can show shorter term trading trends within these larger secular trends.
Ace discovered several years ago that the 40 week lag line of the weekly $TICK index tends to be quite predictive of future stock market action in the major US stock indexes with about a 2 to 6 month window of prediction. What the 40 week lag line does is capture the overall LONG-TERM movement of tick price action. TICK measures the number of trades that go off at the ASK price versus the BID price. Generally speaking, TICK moves higher when the markets are bullish, and TICK moves lower when the markets are getting bearish. This is because buyers tend to chase the ASK price, while sellers tend to chase the bid price.
The 40 week lag line tends to trade in a rather narrow lateral band over many months of time which Ace calls 'the 40 week channel.' Most of the time, the lag line moves through the middle of the channel and the US stock market (NYSE in this case) tends to be mildly bullish to slighthly bearish, but rarely is it in any extreme mode. However, when the lag line gets near the top of the channel, the markets can be said to be reaching a peak %6
Update October 23, 2015: Despite many pundits attempts to label gold as a lousy investment, it continues to sit near record levels vs. the commodity complex that it trades in. If gold is 'only a commodity,' well, it sure is out-performing all of its commodity brethren! More importantly, gold's value seems to be providing a much safer investment compared to almost any commodity or basic materials investment.
Gold can also be compared to all other commodities by using the CRB Index. Using this ratio, we can see that gold is NOT trading as a commodity! NO!!! It's trading mostly as an alternative currency to paper money. If it were trading like most commodities, then this ratio would be under 2.5 where it stood for many, many years. Mike.
Update on 7/7/2014-- From Bloomberg News: 'In the relative calm that is the market for U.S. Treasuries, a sense of unease over a vital cog in the financial system?s plumbing is beginning to rise.
The Federal Reserve's bond purchases combined with demand from banks to meet tightened regulatory requirements is making it harder for traders to easily borrow and lend certain desired securities in the $1.6 trillion-a-day market for repurchase agreements. That?s causing such trades to go uncompleted at some of the highest rates since the financial crisis.'
See the complete story at this link:
The TED SPREAD is used by financial analysts and market pros working for the big trading houses. It is a comparison between interest rates on US dollars in the US versus US dollars trading in Europe using the 3 month money market rates. In general, since the 2008 Financial Crisis, when the TEDDY is falling, this is favorable to European markets and possibly (though not always) unfavorable to US markets. Vice versa, when the TEDDY is rising, it can translate into troubles in the European markets (though not always). This is a weekly chart graphed with historical news events.
NUGT tracks a group of Major Gold Mining stocks at a 3x levered ratio on a daily basis. It is a popular ETF among traders who like to ride a fast momentum trading vehicle.
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