GLOBAL EQUITY MARKETS – October 3, 2020

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REVIEW

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) continues to consolidate above its 200-day average. I analyze the latest correction as a reversion to the mean. As we are still above the 200-day average for the ACWI ETF, It is difficult for me to put my bear market cap on. I've discussed the possibility of a short-term H&S top on the ETF, but so far we haven't seen a follow through which puts the bearish interpretation in question. There is no clear chart pattern development on the daily scale price chart.

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INTERIM UPDATE – October 1, 2020

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I start my research on Mondays and finalize by end of day Thursday. Friday is dedicated to putting all ideas to the report format. During the week I come across good setups and those are featured in the weekly report. However, there are those that pop during the week and is worth bringing to your attention before the week finalizes. Below are latest additions to Tech Charts watchlist in case they experience breakouts in the last two days of the week. These charts will also be included in the weekly update.

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TRADERS SUMMIT – SUMMARY

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Dear Tech Charts members,

On the 27th of September, I gave a presentation at the Online Traders Summit. You might have missed the opportunity to attend. If you have registered for the event a recording will probably be sent out.

I wanted to summarize the main points I've discussed at the online event also you can find attached the charts I've shared with the attendees. You might find these long-term charts interesting. Though, the first part of the presentation where I discuss the general concepts for classical charting might be familiar if you have been a long-time Tech Charts member.

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GLOBAL EQUITY MARKETS – September 26, 2020

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Announcement:

On the 27th of September I will be making a presentation at the Online Traders Summit. I will discuss long-term aspects of classical charting principles with examples from Global Equity & FX markets. If you want to register (FREE) for the 2 day event, you can find the link here. I hope you can make it. I'm excited to hear and learn from several other great presenters.

REVIEW

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) broke down the neckline of a possible short-term H&S top. The 200-day average is acting as support at 75.5 levels. Please note that this is a short-term chart pattern and the shorter -term the chart pattern the more prone it is to failure or morphing (eventually becoming part of a larger scale chart pattern). Friday's price action was strong and reversed back to close slightly below the neckline. The following week will offer more insight of the H&S is successful and price will test the 200-day average. Several equity benchmarks have already reached their 200-day averages during the latest correction. As we are still above the 200-day average for the ACWI ETF, It is difficult for me to put my bear market cap on. I continue to view any correction or weakness in the market as reversion to the mean.

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GLOBAL EQUITY MARKETS – September 19, 2020

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Announcement:

On the 27th of September I will be making a presentation at the Online Traders Summit. I will discuss long-term aspects of classical charting principles with examples from Global Equity & FX markets. If you want to register (FREE) for the 2 day event, you can find the link here. I hope you can make it. I'm excited to hear and learn from several other great presenters.

REVIEW

The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) experienced its first setback after a lengthy uptrend. I've adjusted the boundary of the trend channel. The daily price chart might be forming a short-term H&S top with this week's price action completing the right shoulder. The neckline is at 79.25 levels. Breakdown below 79.25 levels can extend the correction towards the 200-day average at 75.3 levels. A breach above the high (82) of the right shoulder will result in a H&S failure and will suggest higher levels. Please note that this is a short-term chart pattern and the shorter -term the chart pattern the more prone it is to failure or morphing (eventually becoming part of a larger scale chart pattern). I'm reading several comments on social media, regarding the possibility of another sharp sell-off similar to Feb-March correction. While anything is possible in the markets, I want to draw your attention to the concept of recency bias.

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INTERIM UPDATE – September 14, 2020

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Dear Tech Charts members, I'm adding 3 more breakout ideas to the Americas section of the report. I will cover those in the upcoming weekly report as well.

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GLOBAL EQUITY MARKETS – September 12, 2020

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The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) experienced its first setback after a lengthy uptrend. I've adjusted the boundary of the trend channel in order to focus on the latter stages of the uptrend. The ETF had difficulty to rebound from last week's sell-off. Close to the end of this week, ACWI ETF tested last week's lows. The daily price chart might be forming a short-term H&S top with this week's price action completing the right shoulder. The neckline is at 79.25 levels. Breakdown below 79.25 levels can extend the correction towards the 200-day average at 74.9 levels. A breach above the high (81.3) of the right shoulder will result in a H&S failure and will suggest higher levels. Please note that this is a short-term chart pattern and the shorter -term the chart pattern the more prone it is to failure or morphing (eventually becoming part of a larger scale chart pattern).

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INTERIM UPDATE – September 11, 2020

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I start my research on Mondays and finalize by end of day Thursday. Friday is dedicated to putting all ideas to the report format. During the week I come across good setups and those are featured in the weekly report. However, there are those that pop during the week and is worth bringing to your attention before the week finalizes. Below are latest additions to Tech Charts watchlist in case they experience breakouts in the last day of the week. These charts will also be included in the weekly update. (Data as of September 11, 2020, CET 07:45 AM)

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Re-entry, Volatility & ATR based stop-loss – September 2020 Tech Charts Webinar

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Re-entry, Volatility & ATR based stop-loss - September 2020 Tech Charts Webinar We are continuing our Member webinar series with several important and frequently asked topics. In the following webinar, we will follow a different approach. Given that the topics are different concepts in technical analysis/classical charting and trading, each section will have a +/- 10 min presentation followed by Q&A on that section. Webinar Outline
  • RE-ENTRY strategy after an out of line movement or hard re-test. We will try to understand how to navigate volatile price action around pattern boundaries. Followed by Q&A
  • Differences between Stop-loss and Chart pattern negation levels.
  • Volatility (Average True Range and Bollinger Bands).
  • 200-day average, how to utilize it as a trend-following tool.
  • ATR based trailing stop-loss and its application on chart pattern breakouts.
  • Follow-up Q&A
Live questions from Members Concept One 2:27
  • Are there any situations in which you'd enter a trade immediately upon breakout, rather than waiting for the daily close? How about the opposite -- are there situations where you might wait a little longer after a breakout to buy? 25:09
  • Do head and shoulders with sloping necklines as reliable as the ones with flat necklines? 27:25
Concept Two 27:52
  1. Would you ignore breakout from chart patterns happening far away from 200dma? 36:47
  2. Except 200 dma, ATR trailing stop loss, which other indicators you use (if you use) for confirmation of a breakout? 37:35
  3. Is the 200 dma simple or exponential? What are the pros & cons of one compared to the other? 38:54 
  4. Why the 200EMA and not the 200SMA? 39:20
  5. Would you track the crossing over of the 50 DMA and 200 DMA? 39:51
  6. EMA on Weekly or Monthly also? 40:05
Helpful video links:  Concept Three 40:53
  1. You use volatility bandwidth instead of bands? 56:05
  2. What is the ATR minimum target you will use for bullish or bearish breakouts? 56:31
  3. What period of EMA would be reasonable to apply on the ATR to identify the volatility. I'm asking this because the volatility usually doesn't change by large amounts in forex. 57:08
  4. Similarly, what is the BB width do you use for bullish or bearish breakouts? 57:48 (Recommended Reading List) 
  5. Can you apply these same practices to predicting breakdowns for shorting? 58:18
Additional Questions
  1. Do you use these patterns mainly for stocks/equities or futures/options as well? If yes, then how do you manage the risk for F&O? 58:35
  2. Has Brent crude oil broken downwards from a wedge pattern today? 59:14  
  3. Please post charts of the companies listed in the US when you post it when listed in Asia or any other country. For example, when you post a chart for Dr.Reddy's Lab, India listed is also listed in the US under ticker RDY along with the chart for Dr. Reddy's, etc. 59:26
  4. Do you use price charts with adjusted dividend data or without adjusted dividend data. What is the reason preferring one over another? 1:01:26   
  5. Why don't you use volumes in your charts? Can you please explain the reasons? 1:03:14
  6. While trading in forex, the 3% breakout rule doesn't seem to apply. Are you aware of any specific measure which could be followed in forex like in terms of pips or percentage? 1:05:24
  7. Just like me, your methods of based heavily on the classical methods on TA. Do you use any automation to scan for classical pattern s on Metastock? I don't think that such automation to scan classical pattern is possible -- and on the other h and, manual flipping of charts is extremely time-consuming. 1:06:10
  8. Do you use that ATR Trailing in MetaStock with a special indicator? 1:07:50 (ATR trailing stop-loss plug in for MetaStock) 
  9. How did you determine the best stoploss ATR? 1:08:46
  10. When is the best time to enter a trade? Just a few minutes before the closing or the day after at opening? 1:09:25
  11. Do you check the relation between volume and the price when deciding to enter or exit the position? 1:10:41
  12. Why do you like Metastock rather than other websites? Any strong reasons? 1:11:16
Recorded live 09.03.2020     Read More

GLOBAL EQUITY MARKETS – September 5, 2020

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The benchmark for the Global equity markets performance, the iShares MSCI All Country World Index ETF (ACWI.O) experienced its first setback after a lengthy uptrend. I've adjusted the boundary of the trend channel in order to focus on the latter stages of the uptrend. Friday's candlestick formed long spindle suggesting buyers stepped in at the possible lower boundary. 82 is an important level to watch. I don't think the ETF cleared the resistance at 82. The breach was premature to call it a breakout. So I still monitor 82 as the resistance. The 200-day moving average is forming support at 74.9 levels. Breakdown below Friday's low (79.3) and the lower boundary of the 3 month-long trend channel can result in a sharp correction towards the 200-day average. Sideways consolidation around 82 levels and inside the green trend channel will be positive in the short-term.

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