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Category Archives: Technical Analysis
EURUSD and S&P 500 Correlation at a 4-Year Low
The 120-day correlation chart between EURUSD and S&P 500 index fell a few days ago to levels seen at the low of the market in March 2009, the only difference being that back then the market had fallen more than 50% and the … Continue reading
Australian S&P/ASX 200 Inside Day Pattern and Divergence
The Australian S&P/ASX 200 index has risen 11.44% this year, moving on an almost straight line to the middle of February but then volatility increased and little progress has been made. Since February 20 of this year this index has gained 2.3% and there … Continue reading
Posted in Price Action Lab Patterns, Technical Analysis
Tagged Australian S&P/ASX 200, divergence
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Technical Analysis and Cognitive Bias
One may find scores of recent articles in the blogoshpere calling for a continuation of the gold downtrend after a pause and an extension of the stock rally to … you pick the future date, all are there. In reality, these analysts are … Continue reading
Market Randomness Indicator
I have been looking for an indicator of market randomness for a long time and I believe I have now found a reliable one based on extensive backtesting results. The indicator shows when market activity is random and also when non-random … Continue reading
Reversal Signals in QQQ
Reversal signals in a bull market should be analyzed very carefully because they have a high failure rate. Since the beginning of this year this bull market has generated plenty of false reversals. The losses of the shorts caught in … Continue reading
Posted in ETF Analysis, Technical Analysis
Tagged bear trap, Fibonacci, indicator divergence, reversal signals
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Bluff in May and Sell in June
On May 3 of last year I wrote that “the market will punish those who sell in May and go away“. And they were punished hard twice. First they chased the market and then they were squeezed out, only to see … Continue reading
Posted in ETF Analysis, Market Statistics, Technical Analysis
Tagged market bluffing, Sell in May and go away
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Unique Period of Bond Yield Volatility a Result of Constant Portfolio Rebalancing
The 10-year Note yield rose 7.4% yesterday as managers were rebalancing their portfolios to reflect new information about the state of the economy and the objectives of the FED. This is a high level of daily volatility in bond yields and a phenomenon … Continue reading
Posted in Economic Analysis, Market Statistics, Technical Analysis
Tagged bond yields, market feedback mechanism, portoflio reallocation
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Russell 2000 Weakness and Broadening Formation
Like many other classical chart patterns broadening formations such as the one in Russell 2000 Index and IWM since mid March are considered unreliable. This megaphone pattern could be a descending broadening wedge in a bull market that at times ends up … Continue reading
Stock Market Bear Trap or the Start of a Correction?
Was yesterday’s move just another bear trap like the many we have witnessed since the bottom of 2009 or is this a genuine reversal point for a short-term correction? About a week ago I warned that this rally is over-extended and … Continue reading
Filtering Out Nearly Flat Days in a Moving Average Crossover System – Part I
This is Part I of a series of posts that deal with the concept of filtering out nearly flat days below some volatility threshold when calculating the moving averages of a crossover system. Specifically, the analysis in the series will attempt to answer whether … Continue reading
Posted in Market Statistics, Technical Analysis, Trading System Analysis
Tagged trend-following with volatility filters, volatility based moving averages, white noise filtering
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