U.S. Equities Price Anomaly Setup Continues

This research post highlights what we believe to be a unique price anomaly setup in many of the US major markets this week. Our research suggests that April 21, or near this date, will be an important price inflection point base level for the US stock markets. We believe a unique price base will begin to form near this date and a bigger price move in May/June 2019 will unfold.

Our Advanced Dynamic Learning (ADL) price modeling system is suggesting the rotation in the US stock market may stay somewhat muted before this move on April 21 begins. The ADL predictive modeling system is one of our proprietary price modeling utilities that our research uses to identify key levels of future support and resistance as well as to watch for "price anomalies" that setup. Price anomalies are where the current price level of any symbol is greatly diverted from the ADL predictive price level. When this happens, the price will usually "revert" back to near the ADL levels at some point in the immediate future – sometimes setting up a great trading opportunity.

This Daily YM chart shows a current price anomaly in the YM of about 1000 points. This is a pretty big range for skilled traders that are capable of identifying the right trade. The ADL system is suggesting that YM will rotate lower between now and the end of April by at least 800~1000 pts.

adl price modeling system
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Copper Triggered A Short Entry

So, dear traders, our patience was finally rewarded last week. Copper has provided us an even better opportunity as the price climbed higher to make a deeper retracement and the distance of the drop is now even greater. We started from the $2.75 level, then we moved higher to $2.885, but none of them were activated.

I spotted the famous reversal pattern on the chart, which adds to my structure analysis and I will show it in the chart below.

Let’s go through the trade setup steps again as the entry signal was triggered.

Step 1. Chart Analysis and Step 2. Trading Idea

These steps can be skipped as we already know what we are looking for.

Step 3. Trade Setup

We should prepare a Sell Setup to enter the trade using specific entry, stop and take profit levels. These are the things that make a trade. If you don’t have all three levels in your mind, you better avoid trading as it would become mere gambling. Continue reading "Copper Triggered A Short Entry"

Gold Sentiment Lesson

[edit] an article critical of (anonymous) others is an appropriate venue to once again note publicly the biggest mistake of my own, which was an ill-conceived target of 888 on HUI last decade. I learned from that. It’s okay to admit mistakes boys. We all make ’em. But as with humility, that appears to be all too rare in the market writer world as well. It’s okay to once in a while simply state “I was wrong”.

The number in the title is in honor of the boldest forecast burped up by the gold community in February as the metal (and the miners) jerked upward and jerked the holdout would-be enthusiasts into the market. It was included in the anonymous (but real) quotes from a cautionary post last week on the Gold Bull Horns.

We also used these quotes in an NFTRH update in order to try to make a point, despite what were very short-term contrarian bullish readings that day (per Sentimentrader’s data) for junior and senior gold miners.

From the update (2.28.19)… Continue reading "Gold Sentiment Lesson"

Gold Bullhorns Quieted For A Day, At Least

Over in the gold patch, things went from disinterested and downright antagonistic (A Notable Lack of Interest in Gold) to sleepy (Gold “Community” Crickets) to ferociously over bullish.

Any long-time and right-minded gold bug will tell you that the latter condition is usually a signal to prepare for some turbulence. Wednesday and Thursday brought the turbulence in the form of a reversal and pullback for gold, silver and the miners.

Since we became constructive on the gold sector in Q4 2018 (per the links above and especially NFTRH reports/updates) the groundswell of gold boosting (pom poms and all) has steadily risen since it became obvious that something bullish was going on in January. And it appears that last week’s breakout from various daily chart bull flags in gold, silver and the miners finally jerked ’em all in. Enter the Thursday pullback.

In the very few days immediately before that $20/oz. pullback the gold “community” threw itself a gathering of the bullish clans. On just a quick look around the gold websites, some quotes popped out from 2 days before the pullback and one day before Wednesday’s reversal. It’s crickets no more… Continue reading "Gold Bullhorns Quieted For A Day, At Least"

Copper Update: This Is How I Would Trade This Sell Setup

Two weeks ago I put the spotlight on copper as I found there was a nice trading opportunity in the making. The trigger for the short trade was set at the $2.75 (below minor low) to avoid emotional trading or simple guessing, and it paid well as the price dipped from the $2.84 area and stopped 2/10 of the cent above the preset trigger. Then the price reversed much higher as I expected as it should retest the former top of $2.87 before it finally goes down.

We call it a trade setup. Before that, we had an idea, which was based on some kind of analysis. So, converting good ideas into profitable trades makes us better traders. Add patience, discipline and some sort of trading strategy to get consistent profits. Otherwise, a good idea could remain to be just a good idea without pleasant outcomes for us.

Let me show you in this post how I would trade this copper idea on the short side step by step.

Step 1. Chart Analysis: Copper Futures Daily,

Copper
Chart courtesy of tradingview.com
Continue reading "Copper Update: This Is How I Would Trade This Sell Setup"