We have an Interest Equity Markets development. The DJIA has been unable to make a new high for the past 18 months. This is also true for the S&P 500. My thinking is that a decisive new high by these two indexes confirmed by a new high in the S&P A/D is required to put the cyclic bull trend back on track.
This discussion will bring Factor members back to Jun 2017. The advance in Mar 2016 violated a multi-year parabola. Following the initial rally from the violated parabola, the market corrected in the form of a 13-month channel. The completion of this channel in Jun 2016 produced a 785 BP trading profit for the Factor Tracking Account. Another channel is forming in the C$. This is a diagonal pattern, so I am cautious. Keep in mind
The S&P cumulative A/D line is rolling over – the type of rollover experienced in the 4th quarter of 2018 is still not visible. Most Global Equity Markets are in strong down-trends or completed significant top patterns this past week.
The possibility of a massive inverted H&S pattern on the monthly graph is noted once again. The daily chart displays a small H&S top pattern. A completion of this H&S top would do some damage to the near-term bullish case.
https://www.peterlbrandt.com/wp-content/uploads/2019/04/precious-metals.jpg8221233Peter Brandthttps://www.peterlbrandt.com/wp-content/uploads/2016/03/Factor-Research-Trading-Services-300x79-300x79.pngPeter Brandt2019-04-10 09:33:472019-04-10 09:33:47Who is More Precious
Reviewing trades offers the opportunity to unpack the impact of random probability upon a sequence of trading events. An extremely simplified view of probability theory
relative to trading goes something like this:
A prolonged sequence of futures (or FX, equities, cryptos – pick your poison) trades with a fixed $1000 profit target and a fixed risk of $1000 (normalized for underlying trends) should produce profits in 50% of the trades. A net loss would occur over time due to trading fees.
A prolonged sequence of futures trades with a fixed $2000 profit