Sunday, April 27, 2014

Shoulder forming, still bullish

Shoulder forming, still bullish

RUM Wave indicators are still bullish, so I think we are seeing the right shoulder forming on the inverted head and shoulder pattern.  An argument could be made that it will pan out as depicted above, with the price pulling back to the 61.6% retracement level, which is coincident with the opposite shoulder.  At that point we would meet multiple levels of price support. That scenario would make sense against the other studies I have below the main graph.  So, my original stops will remain in place and I'll take what the market gives.

Saturday, April 19, 2014

Squiggily Lines and potential scenario

Inverted Head and Shoulders?

A potential inverted head and shoulders scenario is unfolding on the 4 hr chart.  Inverted head and shoulders patterns are ultimately bullish, but we are at a point where we should be ready for an immediate pullback. Below, I have highlighted the neckline of the pattern (yellow dash.)  For this pattern to hold true, we would see the price pull back to (approximately) this point and reverse to the upside.  If the price continued to decline past the neckline, it could indicate a bearish move.  However, I don't believe this will be the case because all of my RUM Wave indicators (which I trust more than any other analysis system) suggest that we are at the beginning of this particular wave.

Tuesday, April 15, 2014

Move up was predicted, back in my plays

Move up was predicted on Friday

Last week I stated on the blog that one of my indicators that has previously , and reliably, predicted a rapid move to the upside was telling me that  we would likely see a rally over the "next 1-3 trading sessions."  As I had called it, we saw it materialize yesterday and today.  I think this is the start of a medium term rally.  I have re-entered the positions I was stopped out of during the head fake that happened last week.

Friday, April 11, 2014

Stopped out, but still optimistic

That's why I use stops..

The market moves since the last buy signal were initially profitable, but the recent market turn lower was not predicted by traditional RUM Wave indicators.  My stops were set appropriately and protected my initial investment.  This is precisely why I recommend using stops to my friends.

At this time I am seeing an unusual set of indications on the RUM Wave model.   I'm slightly uneasy about what it means because I could not find another similar set of conditions (dating back to January 2007.)  There is, however, one indicator in my model that has been very reliable in the past at predicting a sudden and sharp reversal to the upside.  The duration of such a move is unclear because of the other mixed signals I'm seeing, but I expect to see it materialize over the next 1-3 trading sessions.

Tuesday, April 1, 2014

Buy Signal

RUM Wave indicators generated a buy signal yesterday.  This suggests that US Equities will move to the upside over the short - medium term.