Chee Kiang Lim, an attendee to my 6-week webinar asked:”S&P futures up >2%. Was your prediction based on charts or historical performance over the Easter period?”
I had similar questions from some of the Indian viewers of NDTV-Profit.
Here’s my answer.
My approach to the markets involves multi-disciplines. I am looking for confluence from different information sources. For example, I see little point in using a MACD, RSI and Moving aAerages to identify the trend: the tools all measure the same thing - price.
The basis of my approach relies on 3 major categories and 2 supporting ones.
Major:
- Price Structure: Barros Swings, Market Profile, the Ray Wave. This includes price targets based on statistics and ratio analysis.
- Price/Volume Relationships
- Time: using statistics, seasonals. Hurst analysis, and Ratio analysis.
Minor:
- Sentiment: COT and Sentiment Surveys
- Momentum: Ray’s Clock and Average True Range
In this call, I had:
- On the 18-d, a target for this move at 936 to 903
- a seasonal move up for end April to early May
- A Hurst cycle, looking for a low in the first week of April followed by a move up to early May
- On the 1-d swing, I saw a running correction - this denoted strength. The S&P stopped on Monday at the optimum retracement for a running correction.
- The pull-backs on April 6 and Tuesday 7 were on light volume.
- The average target for the first leg of a running correction is 1.6% +/- 0.7%.Since a running correction denotes strength, my target for the 1st leg was 1.6% to 2.3% from the end of the correction.
Putting those factors together, I came up with a plausible scenario. The market would make a low (target 814 t0 822, basis cash) either Wednesday or Thursday and would rally from that point until May. I am looking for seasonal. Hurst high end April/early May.
Hope this helps.
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