Market Update (SLV, INR, PSI20)

Good night!

The market today was very interesting. Generally speaking was a fine day for most markets...
Let me show my trend follower status for the SLV, INR and PSI20 chart.

1) Silver (SLV)

SLV had a nice breakthrought today, as it broke a strong resistance that was formed around the "psychologic" 18.0 level. However, nothing is already settled here, but a nice move had been made for sure! Today's volume was nice and seems to be no divergence in the RSI indicator. The stochastic oscillator is in buy mode too. The MACD grew and is almost green. In the walls of worry I see the prices touching the upper bollinger band and I'm watching how the SLV will perform until the 12th of May (there is a cross that day from two of my chart lines - call me crazy :P).

My trend follower is right now in the 17.59 level for a new sell signal.


2) India (INR)

India is my fetish market and I'm very confident that I'll be very happy in the near future with my longs!

My trend follower here is in the 12.36 level and the INR is at 12.23, so a new buy call my happen very soon. Regarding the daily indicators I see no problems for the longs and new highs are very likely.

3) PSI20

Our portuguese index has been smashed by traders in the last sessions, after the Standard and Poors rating agency dropped our rate. Just check how my trend follower caught that down move!!! It's amazing its performance :)
I'm writing today about it because, in spite of my trend follower is still in sell mode, I see nothing more than 3 clear signals for a buy call! The RSI climbed above the 30 level, the stochastic oscillator is now in buy mode and, more interestingly, there is a buy signal from the lower bollinger band! These are very reliable signals and I see no other option for the PSI20 than a short term very profitable trade!


Play your cards....I'm plying mine!

Silver Up To Date

Hello people,

Allow me to update my silver trend follower. This week brought another trend change in my optimized follower. This time we were presented with a new buy signal, after the sell call caused by last week's sell off.

The daily chart looks like this:

For the second time in a row my trend follower acted last week as a trailing stop. However, this week provided us a new buy call and friday's candle looks pretty good in the chart. In spite the MACD is still red and the stochastic oscillator is still in a sell, the RSI has no negative divergence with the prices, so I feel like this coming week may be very good for longs (longs...not bulls! Some months ago I gave up on seeing the market as a "bull vs bears battle"...for me there's only one thing now: trend following! I don't care if prices go up or go down, as long as I can identify those moves as a trend).


The weekly chart currently also looks pretty fine for longs:

Weekly speaking, silver is rising from a MACD buy cross condition. The past has shown us that this crosses are very reliable and so the probability of success is very high right now. Who didn't buy silver yet is still on time to make a move. The stochastic oscillator is still on buy mode and the RSI, with no negative divergence, has yet some room to allow a strong move up for the next weeks. The one and only thing worrying me here is the low volume of last weeks.


That's all for today.
Trade safely!

Let that chart speak for itself

Good afternoon,

Stocks plunged hard last friday and my trend follower caught that drop just in time. In the case of silver the new buy threshold is at 18.47, which is a level not reached since last January, so get caution!

Indicators are taking some breath right now and, if this really is a bull market, dip buyers will start to enter the market again.

Take care,
JAPO.

Silver @Buy

Good night.

My trend follower turned again into buy mode for the SLV chart. Remember the last sell at the 16.65? Well..this time you would'nt have needed to sell it. A new refreshed buy call was generated today right at the openning of the trading session (at 16.94). This means that one bought the shares at a higher level than they were sold. It happens..and I think it's still better to follow the system, because even though this time it wen't in the wrong way, when it goes in the right one it is pretty much worthwhile!

Now the chart:

The way I see it, this new buy trend has it's legs to climb up the walls of worry again. And this is because there's a new stochastic oscillator buy cross, still no negative divergence in the RSI, today's volume is OK and, finally, the MACD is almost in a bull cross.

However, nothing is still resolved and I'll be monitoring the 17.31 level in order to check if new highs are possible in the short term. I also don't like today's openning gap because...well...because it's a gap!

The new trend follower stop loss is positioned at the 16.55 level, which is a confortable value for buyers, so let's monitor this value too.

One funny thing about today's candle is that it is a perfect doji bar...completely symmetric...

Tomorrow we'll probably see some downside because the shorter term indicators are very overbought, especially the 30-minute one.

Hope I helped you with this post.
JAPO.

S&P 500

Now take a look at the S&P chart:

First of all, friday's bar is a bearish engulfing pattern, which usually leads to more downside. And this gets very interesting about tomorrow, because since a year ago, almost all mondays were very bullish!

My trend follower is still in buy hold mode and the treshold is at 1151. However, there's a sell cross in the stochastic oscillator and a drop below 70 in the RSI. The MACD is dropping and the there's some divergence in volume with prices.

It will be an interesting week to follow...

Time to short silver?

Hi,

See the new short signal my trend follower issued at this friday's close:

As you can see, now the trend follower is sit at the 17.24 level, after a 2.52% drop in the SLV price last friday. The last buy call was made at the 15.00 level and the sell was at 16.65, which represents a 11% profit in 26 trading days.

Checking the other indicators and some rudimentary Elliot Wave count, I would say silver will drop a little bit before resuming the uptrend. There is a little negative divergence in the RSI and the MACD doesn't look good either, because it's hystogram is almost negative. My expectation is that silver will correct and will find support at 16.47 or 16.20 at the most. These are the levels I'll be monitoring during this week. A drop below 16.20 will be very bearish for me! Also notice the two trend lines in the chart and the prices reaching the apex...

The first sign of an hypothetic resume of the uptrend will be issued by a buy cross in the stochastic oscillator and then confirmed by my trend follower.

Just to finnish, notice how my sight right now is still bullish for silver but, in spite of that, I am following my system! I could "hold the horses" and don't sell the SLV right now. However, if I'm playing with a backtested system, I must follow it! It wouldn't make any sense to be showing you here my system and don't use it. As someone wrote in his blog, "you don't need to understand electricity to use it...you just use it!". This is exactly the way to deal with a trend follower.

Market Update

Please see the following charts and draw your own conclusions:


1. Silver ETF SLV

2. Gold ETF GLD

 3. S&P500

4. Indian MSCI ETF

5. Portuguese index PSI20

6. Russell 2000 IWM ETF

...and that's all for today folks!

Silver

Okay...Silver is showing weakness and even some trouble supporting the bears' attempts to drop it.

Okay...those damn french gays from Marseille drawn with Benfica in Lisbon..so what? All I know is my trend follower is stocking this SLV chart very tightly.

Today SLV closed a little bit above my follower value, so tomorrow may be generated a new sell signal, because right now silver is very overbought (in spite of the new stochastic oscillator buy cross).

Weekly speaking, silver has a little more room to climb up the walls of worry, but let's have a little caution here and leave the excitement out of the equation. By the weekend I'll show you the weekly chart of silver, along with other equities.

Dream Theater & Iron Maiden

Good night!

I wanna share with you this great news: Dream Theater and Iron Maiden will tour together in the US. The most awaited concert right now will be played at the Madison Square Garden by 12 July 2010. This a huge event and it's too bad they won't tour together in Europe too :(

Listen to this:


Dream Theater - Pull me under




Iron Maiden - Fear of the dark




Ohhhhhh Yeahhhhhhhhhhhh!

Because it's weekend

Because it's weekend and I have some new weekly calls, I'm showing you them here. 

From now on I will try to skip the words on technicals and let my trend follower model speak for itself.

See the new weekly buy signals below. A weekly signal is a long term signal, although its reliability is as good as if it were a daily signal.

1. Silver (new BUY call, either from optimized model, as from the default one)

2. S&P500 (BUY)

3. GLD (Hold)

4. India - INR (BUY)

 

5. Brazil  - EWZ (Buy)

6.  Russell 2000 - IWM (BUY)

 

7. PSI20 (Hold)

Trade safely,
JAPO.

India

Now let me pleaaaase update India through the ETF I'm following (MSCI India from Lyxor).

From the weekly chart, India seems to be a little bit in the edge of a hard correction. See the picture below...In  spite of my trend follower being about to be in buy mode again (weekly), I see a great bearish divergence between the prices and the RSI indicator! This usually leads to big downside!

As you can see, this divergence is huuuuuge! It begans with May/June 2009 top and continues this week. Jut for your information and in case something bad hits India, my monthly trend follower value for INR is currently 9.23. This value would be a stop boudary for long term investors in India.

Trade safely.

S&P500 Chart

Hello people,

I wanna show you how the S&P500 is doing right now, because a major turn may be hitting us again...this time maybe on the upside! Who knows me knows that when I see the long term S&P500 chart, I see it in a bullish mode, in spite of being more bearish fundamentally (things aren't so good...the recovery of the real economy is being very hard, bla bla bla).

Now let me show you the reason of tonight's post:

As far as today's close, I'm getting a new weekly buy signal from my trend follower. This is the second one since the famous March/09 bottom and I see it as a very reliable one, if it lasts until friday's close. This is because the algorithm calculates the weekly value of the follower each day of that week, but the corresponding signal will only be valid in the last day of the week. So, we need to see a nice breakthrough this week in the S&P in order for the resume of the bullish trend. And that will only be allowed by the daily chart!

In a daily view we have this picture:

My trend follower is in buy mode since the 16th Feb close and, although another resistance has been surpassed today, some indicators are showing a small weakness. I see the RSI and the MACD with a small negative divergence and the volume looking very bad....reaaaally bad! The doji candle of today doesn't appear very well in the picture as well...I would say that (at least) a small corrective move will be done from here and the weekly trend follower won't change at the end of this week...

Trade safely,

JAPO

Metal Update :P

Good night,

Let me update my current favourite metal...Silver!

I will start with the 30 minute chart, and then comment the daily chart. Finally, I will show you the weekly chart and maybe the month if I'm in the mood. In both daily and weekly charts I keep on using the optimized trend follower parameters.

1. 30 minute chart

Here is a picture of the 30-minute chart from the Google Finance website:

As I've said in the last update (http://mytrendfollower.blogspot.com/2010/02/silver_23.html), the SLV was developing a nice support price in the 15.49 level. This was written by Tuesday's close and, as you can check in this chart, in wednesday that level hold any attempt to drop down the SLV. By Wednesday's close I was relying pretty much on the 15.49 level in order to sell the SLV if the price went down that level.

Then, in Thursday's open, the SLV openned with a gap below the 15.49. However, we got lucky and after the price came in above the lower bollinger band (that's a buy signal!), it gained more than 0.6 points in two days only.

Now, the price is topping and a small (?) correction may be in place, at least until the lower bollinger band of this chart (16.0), but the daily chart may have more intell on this issue!

2. Daily chart

Here is the picture with the daily chart and my optimized trend follower feature:

My trend follower status right now is still under a buy signal and it's threshold is about 15.6; see the last two candles...the first one is somehow a very bullish engulfing bar and the last one is another very bullish one in this context, because it's high is 16.22 and this is above the first resistance (16.20). Yes...I know....we need a bigger difference in order to aceept the 16.22 high as if it had passed the 16.20 previous resistance....

So, the resistances the SLV has to pass now are the 16.20 and the 16.47. As a dummy analyst, I would say that, if the SLV goes above the 16.50 level, new highs can be made in the medium term...some weeks further than now. Supporting any attempt to drop the SLV we have the 15.49 level in a first stage and then the 15.0 boundary. Bellow this one sell it!

Technically and in the line with my previous analysis in the blog, the SLV is in bull mode in the daily chart. The only concern here is the lower volume.


3. Weekly chart

 

The weekly chart is still bearish right now. My trend follower threshold here is 16.58 (vs 16.53 in the daily chart) and the next week may give us a new buy signal, if the daily chart manages to keep on bullish mode. However, I wouldn't be honest if I wouldn't express here my bearish view in this last chart.

The weekly indicators are still weak:

 .MACD histogram is still red, but inverting for the last 3 weeks: bearish/bullish

 .RSI is still below 50 and showing no positive divergences yet: bearish

 .Stochastic Osc: endend this week with a (small) sell cross: bearish

 .Volume: falling with rising prices: bearish

.BB: prices are rising from a buy call, since they rised above the lower bollinger band: bullish

 .Last candle is a "hammered green doji". Hammers are bullish, but the doji part of it shows some indecision. If had only this thing to play with, I guess I would consider this bullish.

Let me say something about the stochastic oscillator. I think this is one of the best indicators for traders who try to follow swings and trends. However, the problem is that many platforms use different formulas for its calculation and it get's tricky to trade with it sometimes. My point is that, although in this platform the stochastic issued a sell cross, in stockcharts.com and others I see a very bullish cross in the weekly chart of SLV.

Don't forget that Silver and Gold are very related to the Dollar in a reverse proportion. They act as a shelter for Dollar devaluation. So, in order for us to keep seeing a bullish undertone in these metals, the Dollar must continue its devaluation. In the UUP chart, my trend follower is in bull mode, both in the daily and the weekly chart. However, I think a top in both is being formed.

Trade safely.

Silver

Good night.

Take a look at this 60 minute chart:

 

As I told you yesterday, silver was showing some weakness and behaving like a top (major or minor...I don't care...the follower will track in the right direction).

Today has been a tough day for silver an that evidence is clear on the 60-minute chart. For 3 times it has hit the 15.49 boudary. This may be becoming a strong resistance for silver, as it is also the breakout value of 16 of February! If silver is yet in bull mode, this value will hold every down move from here. However, if the 15.49 value gets broken this week...well...silver gets in trouble!

Let me check the technicals in the chart in order to realise what may be the most likely and reliable direction for tomorrow in silver:

1. MACD: last 2 divergence bars are bullish

2. RSI: 23...below 30 (bearish), but oversold. A break on the upside from 30 would be bullish, however needs confirmation, because there's still no positive divergence

3. Stochastic Osc: oversold below 20, already with bullish cross...however needs to rise over 20 to be really   bullish!

4. BB: sideways from lower bollinger band, needing an uptrend to confirm the buy signal

I'm looking very carefully for this week's evolution in silver...this may be the most important week in silver for 2010 and mark very clearly the next medium/long trend...if resumes the uptrend or confirms the start of a downtrend.

Trade safely,

JAPO.

Update

Good night,

Let me do some update here. This time I only intend to show some charts with my follower current state and save the words to other time. I also tell the medium (weekly) and short (daily) term look from my follower.


1. Silver (SLV) - Optimized trend following model

Today's close: red doji bar, showing some weakness
Short term: uptrending, but maybe topping
Medium term: downtrending (correcting?)

2. S&P500 - Default trend following model


Today's close: doji bar with huge volume! Must mean something...

Short term: uptrending, but maybe topping

Medium term: downtrending, but almost turning up

3. Russel 2000 (IWM ETF) - Default trend following model


Today's close: doji bar...indecision...

Short term: clear uptrend in the way

Medium term: almost turning up again

4. Portugal (PSI20) - Default trend following model


Today's close: doji bar in a resistance zone

Short term: follower is green, consolidating...

Medium term: downtrending

 

5. India (MSCI INR) - Default trend following model


Today's close: red bar

Short term: uptrending, but looks like a top

Medium term: follower is red, but not that far from turning green again

6. Brazil (EWZ ETF) - Default trend following model


Today's close: looks like a shy bearish engulfing ba
Short term: uptrending

Medium term: follower is still red, but not that far from turning green again

 

Never forget....to trade safely!

JAPO.

Silver

Good night!

In the past few days I've been trying to optimize my trend follower to some charts I'm following. SLV is the first one optimized and running. Basically, I took my follower algorithm and optimized the two main parameters for the backtest done in the chart's history.

Why optimizing?

I think that each equity has its intrinsic characteristics and dynamics. So, if instead of having only one trading system for all equities, I had a bunch of customized followers?
I'm not quite sure yet if this assumption is true or just a phalacy, but I am testing it. The first chart I choosed to show you is the SLV (silver ETF).

Please see.the SLV daily chart with default follower parameters:

 

Take a look at the backtest results. It starts in 1 of May of 2006 and ends with today' s close. The initial capital is 50.000€ and considers 13€ of trading costs in each operation. Regarding capital management there isn't any type of stop loss, but only profit reinvesment. I'm using both long and short positions (even with  long positions only, the results are quite good). The capital reached by today is 72.114€ or 44.23% profit.

Now, the chart with the optimized follower for the SLV chart:

With follower's optimization the result is by far profitable: 187.5% vs 44.23%.

This is an indication that optimization may be a very helpful tool. I have some faith here for the SLV chart, because the optimized parameters are pretty close to the default ones I'm using in the other charts. Only time will tell if this the way to trade...

As usually...trade safely!

Russell 2000 :: IWM

The IWM ETF that follows the Russell 2000 index ended today with a new buy signal:

Did the correction end? Hummm....I'm not quite sure. Besides the new buy signal in the daily chart, let's not forget the sell in the weekly one! Another reason to be affraid of is that today's close also brought a 20-day MA cross under the 50-day MA. The last time this happenned was in Nov/2009 and that made sure that the correction wasn't finnished. However, today's bar is really bullish and the market is trying hard to break the correction rather sooner than later...

Other ETFs ended today under a buy signal (e.g.: EWZ and TNA).
But most impressive is that many short ETFs ended in a sell. These may well be all false sell triggers if tomorrow isn't a good day for the bulls.


Trade safely,
JAPO.

Gold (GLD)

Good night folks!

Let me show you how GLD is trying again to start a new uptrend.
First of all, the daily chart:

 

This isn't the greatest daily chart on Earth. However, today's candle was a very bullish one, triggering my trend follower into a new buy signal. Let's not get too excited here, because last 29 Jan and 1 Feb candles' pattern is very similar to today's and yesterday's candles. There was too a (fake) buy signal by that time!

Today the price ended just below the 20 day MA and it will have to do a lot more than that in order to start a new uptrend. 

Now, the weekly chart:

I should only show you the weekly chart tomorrow, but let me do some futurism here. The way I see it, the weekly chart is showing will to turn the trend to the upside. This is true because the stochastic oscillator is trying to end the week in a buy and this is a very trustable signal. On the other hand,  this week's price is somehow looking like a bullish engulfing bar...let's wait for tomorrow's close in order to check those indicators again.

Trade safely,

JAPO.

PSI20: Daily buy signal

My trend follower issued today a new buy signal in the portuguese PSI20 index.

See the picture:

As you can check, the follower ended today with a buy opportunity.
Technically speaking, I see the shy-rising volume, the RSI with a cross over the 30 boundary and the stochastic oscillator in a daily buy zone. The MACD histogram is too rising, after inverting its trend two days ago. These are all buy supports.
On the sell package, I see the late MA20 cross under the MA50 and my weekly trend follower still being under sell pressure (a weekly buy will be issued with a price over more or less 8050.

To conclude, all I can say is that my trend follower has very good results in the backtest of the PSI20 index, so I think this can be a turning point. Howver, let's play the safe side while the S&P is still on a sell!

Trade safely,
JAPO.

This isn't either good or bad....it stinks!

Good night folks!

This week I've been away from my blog, but tonight I will show you some charts and comment their state along with my trend follower. Let me start by the portuguese PSI20, which suffered a lot during this week, after the bad news from the rating agency, saying that Portugal is in high debt risk, along with Greece and Spain. Let me congratulate our politician class and their outstanding expertise!

 After my trend follower issued a sell signal by 14 January, the PSI20 has dropped a long way and is currently below its 200-day MA! Many people consider this boundary as the bull/bear "water mark". So, right now, the PSI20 is already in bear market again. This is very bad news for us. Fortunately, my follower works really nice here :)

Now, let me move on to the S&P index:

The S&P is in a sell since 21 January and there was yet no new buy signal. What can I say here? Well...my follower did managed ok again providing an early and reliable sell signal. Right now the indicators I follow are
quite oversold and even showing some positive divergences in the daily chart. So maybe we are approaching a new buy signal. This one may only correct the recent downtrend or be something more. Let's wait to see and pray that my trend follower detects all nice tradable trends :P


Regarding India, the INR ETF ended this week in a (weekly) sell, after the daily sell by 4th February:

This is the third weekly sell after the famous March lows. The first one lasted 2 weeks; the second one only one week. Let's see if this one will hold for this week or turn right now into a new refreshed buy.

That's all for tonight.
Trade safely.