FREE REPORTS - Trading the Line

Pandora’s Box

The brief and dramatic recovery off the late October low saw the market back at 2815 before reversing back lower. A bounce at 2670 in mid November looked promising but again the market succumbs to declining forces and here we are again, back at the previous primary low.

The strong rise off the October low had all the early signs of a potential V shaped T structure which projected a series of initial highs into 08 November, but at that point the rapid decline (in price and oscillator) started to flash some strong warning signs as the structure turned increasingly bearish.

When a T structure collapses it will morph into a larger and more complex structure, and we must revise our expectations as the market looks for a secondary or another primary low.

We are now seeing trade in the region of an important pivot, hence the previous strong bounce. If breached it opens up Pandora's Box for significantly lower prices.

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As we can see from the chart below with the T volume oscillator, the rise off the October low was indeed very strong with the oscillator making a new high. We can see the T confirmed by the oscillator moving upwards through the previous series of declining highs in the oscillator – the cash-build up line – and it should have projected highs on 08, 16, 23 November and 04 December. But the rapid decline in price and in the oscillator on 12 November hinted at a problem as the T structure collapsed and turned very bearish, providing fuel for the downside. We haven't seen this for some years.

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Zooming out to the weekly chart, we can see that price is again at the lower edge of the weekly channel and heading towards primary support in the region of the 2 weekly spike lows – 2530-2600, with secondary support much lower 2320-2420.

One of the things that I have noted previously is that when the market pushes upwards through a major trend line as it did in June 2014 and September 2017, we have a challenge to price. The price rise eventually becomes unsustainable and price needs to correct and re-establish itself through a process of probing back lower to find out where the value in price lies.

In our more recent case, we can see that we have yet to see a challenge to the lows prior to the breakout in price above 2500. Those lows at 2420 and even 2320 may well be re-visited in due course.

That may seem dramatic, but there is little in the way of technical support below 2600, and much lower from here opens up Pandora's Box of price re-discovery.

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It is interesting to look at the much larger time frame occasionally, and on the monthly chart below we can contextualise the market in relation to its historical lows in 2002 and 2009.

It is clear that the market has been rising generally since the low in March 2009, and therefore within the right-hand side of a Mega T structure. According to this we have just seen a projected high from the April 2000 peak in January-February of this year (pink), and subsequently another projected high from the July 1999 high (red). This is potentially the momentum peak of the Mega large T structure. Another wave from the July 1998 high would project another major high in October 2019 – not necessarily a higher high though, but it could be.

I have drawn each projection from the price highs prior to the major low. In the red T structure at the 2002 low we can see that the ultimate projection for the 2007 high came from the 1997 high which is of course much earlier than the final high in that bull market. Using the same logic we should keep an eye on the projections from the earlier highs. These are October 2019, August 2020, and January 2021.

As you can see the market is generally supported at its 10 month exponential moving average (ema) during bullish phases and subsequently at its 21 ema on major pullbacks. If the market is to enter a serious Bear Market it must then continue to decline below the 21 ema. Note also that the long-range 8 / 55 oscillator also provides a confirmation of the change in momentum.

Unfortunately these levels are now being addressed and price much lower than here is highly suggestive that we are seeing a major bear market develop.

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All in all, 2018 continues to bring with it some excellent opportunity and a range that is far beyond the experience of recent years. We should expect it to continue and trade accordingly. This is a Brave New World.

–

Regardless of whether the market can recover or whether deeper low(s) are ahead of us, the simplicity of the proprietary price based S/T Signalling System continues to keep us on the correct side of the market, providing a timely Sell signal at the beginning of October. Recent Buy Signals have again rapidly switched back into Sell Signals as the market continues to stabilise and the outlook continues to look murky…

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for whatever is coming next, and trade with confidence:

To receive detailed daily analysis, guidance and the updated daily Buy / Sell trigger levels being generated by the Trading the Line system before the market opens, and intraday alerts when appropriate, please become a Member and Sign up for Alerts & Observations – includes access to Members Area and the Explanatory Notes for all of the concepts discussed.

Disclaimer: This is the diary of a personal trading system, its methodology and the signals that it is producing. You are welcome to follow along but please understand that the information presented here is for educational purposes only. No recommendations are being made to buy, or sell stocks, options or futures contracts. Please consult your own financial advisor before making any investment decisions.

Steve Rushton November 25, 2018No Comments

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Oktober

Welcome to the Trading the Line Special Report.

A series of late September Buy Signals failed to extend the market beyond the 21 September high with late day selling hinting that price had a problem and finally on 04 October price broke down creating the first Sell Signal since mid August and then over the next few days price plunged.

Price quickly found itself below the important 200 day moving average and bounced at the lower extreme of the channel, where some support has been found and a (perhaps temporary) low has formed.

The initial strong move up created a Buy Signal and defined a small T structure that has been short-lived as waves of selling into strength have been the result of such a forceful drop in the market.

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As we can see from the chart below with the T volume oscillator, a series of large T structures were pointing to a completion in the September time-frame and although sometimes these structures continue to extend, they ultimately come to a conclusion, and that is usually a drop in the market. This is due to a lack of buying pressure at the end of a T structure.

The recent bounce has come at a 'logical' support area near previous lows and on rising trend lines from the previous lows and the move itself is not disimilar to the February one.

And so, we should of course be prepared for an erratic, volatile and choppy recovery, followed by more harsh selling, perhaps a series of lows (higher or lower) and ultimately, some kind of re-establishment of the trend…

Or, this is a Warning – a shot across the bows – and the beginning of a more serious decline, a Bear Market if you will, depth and length unknown.

Fortunately we do not need to know the answer, because the S/T System allows us to trade the market without the prejudice of prediction that would likely inhibit us.

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Zooming out to the weekly chart, we can see price became unsustainable again above a very long term trend-line from the 2014-2015 peaks ultimately triggering price collapse into a volatile channel.

For now I am still seeing this as a process, initiated when price climbed above 2475 or so. Price then rises as high as possible before collapsing and re-defining its support levels. Look back to the bearish phases in 2015-2016 to see how price processed the highs and established some very strong support levels which then became a platform for moving higher.

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It is interesting to look at the much larger time frame occasionally, and on the monthly chart below we can contextualise the market in relation to its historical lows in 2002 and 2009.

For now, a Bear Market Warning is flashing but a monthly close above 2764 would improve that outlook.

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–

Regardless of whether the market can recover or whether deeper low(s) are ahead of us, the simplicity of the proprietary price based S/T Signalling System continues to keep us on the correct side of the market, providing a timely Sell signal at the beginning of October. Recent Buy Signals have rapidly switched back into Sell Signals as the market continues to stabilise and the outlook continues to look murky…

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton October 21, 2018No Comments

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September

I hope that you have enjoyed the summer.

The market has continued to rise throughout the summer months with the July highs superceeded by August's assault on 2900.
Although at times there have been warnings of complacency with low put/call ratios and relative weakness evident, each of the declines has generated new highs with the T structures supporting and overlapping each other.

As you can see the summer advance projected some highs at or just after the Labor Day holiday, and the market is currently testing important rising support just below 2900. As the majority of participants get back into the swing of things it would make sense to see some consolidation at these levels or perhaps a bit lower, and prove whether the recent breakout to new all time highs is justified or not.

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Zooming out to a one year chart, below, we can see that once the market had broken the triangular structure and the series of declining angles from the January high it was able to resume its previous trajectory. This is especially evident since the July lows.

The break away move since the July low was accompanied with a strong move up in the T volume oscillator from a stabilisation pattern and this in turn activated a new large T structure projecting highs in August and possibly also into this week.

After projections of major T structures it is usual to see a significant drop in buying power and the market subsequently looks for the price to stabilise at a level where value is perceived. The T volume oscillator is derived from the NYSE advance / decline volumes and is therefore a good representation of the overall flow of buying power within the market as a whole.

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In the weekly chart we can see that the volatile range-bound action of the first 4-5 months of the year eventually gave way to the continuation of the search for new all time highs.

Movement up above the long-term trendline along with the projection for early September highs has apparently triggered some selling as the market looks to stabilise itself again after its recovery to new all time highs

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All in all 2018 continues to be an exciting year bringing with it some excellent opportunity and a range that is far beyond the experience of recent years.

Along with the expansion of automated trading systems, artificial intelligence, a greater use of hedging and volatility products, as price moves higher itself range itself appears to becoming greater, and the greater the range, the greater the opportunity. This is a Brave New World. We should expect it to continue and trade accordingly.

–

Regardless of whether the market can sustain its trajectory for higher highs or whether another, perhaps deep, low is ahead of us, the simplicity of the proprietary price based S/T Signalling System continues to keep us on the correct side of the market, as of yesterday providing a timely Cover signal, for now.

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton September 6, 2018No Comments

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Dog days

I do apologise, it has been rather a long time since my last free report.

The market rises into the dog days of summer out of a volatile consolidation at the important 2700 level with 2018's gappy and choppy character continuing into the summer months with the May recovery superceeded by the June recovery and the more recent advance to 2800 in July.

Each of the declines has projected highs with small T structures reinforcing and overlapping each other. Weakness brings renewed strength as value buyers soak up the relative cheapness of price and this stimulates renewed buying.

As you can see the recent advance is now at a critical juncture with an important initial projection from the recent T structure projecting the current high. We may see some weakness and consolidation here, perhaps even a pull-back. It is entirely possible that the current structure is larger and that there are further highs ahead, and the relative strength of the market hints at this, but we should be prepared for both scenarios.

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Zooming out to a one year chart, below, we can see that the market seems to be in a trajectory that should see it return to the all time high, and beyond, and that the January high and subsequent collapse could now be viewed as an anomaly – as the market moved up too far out of its trend and then dramatically lower to re-set its course.

So, the market is back on course, chopping and grinding higher, each decline providing fuel for the next advance.

Note also that the T volume oscillator in the chart below has recently displayed greater strength, in efffect breaking upwards from the range-bound oscillation and suggesting the possibility of future out-performance and further recovery in due course.

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In the weekly chart we can see that the volatile range-bound action is improving with a weekly move up out of the recent triangulation.

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All in all, an exciting year so far as 2018 continues to bring with it some excellent opportunity and a range that is far beyond the experience of recent years. We should expect it to continue and trade accordingly. This is a Brave New World.

–

Regardless of whether the market can sustain its current advance or whether another, perhaps deeper, low is ahead of us, the simplicity of the proprietary price based S/T Signalling System continues to keep us on the correct side of the market, providing a timely Buy signal and a green light, for now.

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton July 16, 2018No Comments

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On the Edge

Welcome to the Trading the Line Special Report.

I do apologise, it has been rather a long time since my last free report.

On the edge of a recovery , maybe. Let's recap.

On 18 April the market succumbed to the declining resistance angle from the January and March highs and was forced to re-test the bounce from the April lows. It seems that each drop towards the 2600 level was met with an increasingly bullish response.

On the 04 May the market rapidly moved higher from a touch of the 200 day moving average and triggered an S/T Buy Signal at 2649 that is still active today some 75 points higher.
The S/T system is my proprietary price based system that requires the market to prove itself by moving beyond a particular level. The system then runs a cover stop level under the market until price performance deteriorates significantly. This system does not capture the exact turns in the market but captures the meat of the moves. It has performed particularly well under the stresses of the recent volatile market, keeping us informed of the general direction of the market.

The thrust on 04 May provided an early warning of a change in the market structure as the T volume oscillator – an indicator that descibes the market's internal rate of change of buying or selling pressure – moved upwards through the recent declining trend-line or cash-build up line and defined a new T structure. This new T structure utilises the selling since the most recent high on 18 April and projects the next highs today, on the 14 May and a more important high on 18 May, with the possibility of further waves beyond.

So, as the market makes a relative new high and hints at the possibility of further recovery, the question on every trader's mind is – is this just a bounce before the bearish action continues, or has the market finally returned to its previous calm bullish discovery of new all time highs.

Let's take a look.

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The market has moved up through and beyond the declining angles from the January highs, and we can see that the oscillators are displaying relatively bullish behaviour at the most recent low in comparioson to the previous lows, suggesting that the bearish pressure has been steadily reducing.

The Osc oscillator in the chart above is a momentum indicator which of course lags the market but is now moving up strongly, suggesting that there is strong upward momentum behind this move.
The T volume oscillator in the chart below is an indication of overall buying or selling pressure as it measures the rate of change of advancing vs. declining stocks in the NYSE as a whole. The blue line is the readings as is, and the red line is an adjustment to take into account an anomaly that occured at March options expiration due to some very heavy buying back of hedges. Both versions look bullish, displaying a series of higher lows and a general cash-build up since the oscillator high on 19 December.

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The DB (double bottom) structure centred inbetween the February and April lows has generally been bearish, projecting a series of lower highs. At some point these type of structures collapse into a final low or morph into a larger structure. The most recent projection for a high from the DB structure was 07 May and as the market is now moving above that low, we can see that the DB structure is turning bullish or losing its negative influence.

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The weekly chart above shows that the market is still holding a long-term trend line rising from the February 2016 low, as it continues to absorb and digest the breakaway move into the January 2018 high. For now, primary support is holding, with the possibility that a later re-test of the major support area may still be necessary.
I am still seeing some interesting comparisons between the 2015-2016 bearish phase and 2018 where the important breakaway move requires re-testing of earlier support lines to consolidate the market's advance, in effect the building of a large T structure. Notice also that important resistance still resides at about 2800 and may of course be the current target.

2018 continues to bring with it some very exciting trading and a range that is far beyond the experience of recent years. We should expect it to continue and trade accordingly. This is a Brave New World.

–

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton May 14, 2018No Comments

FREE REPORTS S&P500 daily update

Trouble in Mind

Trouble in mind, I'm blue
But I won't be blue always,
'cause the sun's gonna shine
In my backdoor some day.

…

Well it's trouble, oh trouble
Trouble on my worried mind,
When you see me laughin'
I'm laughin' just to keep from cryin'.

Nina Simone, Trouble in Mind, 1960

–

Welcome to the Trading the Line Free Report.

Friday 23 March. No bounce above 2550, a move down to 2525, an attempt to recover to 2550, a relentless sell down into the close at 2588. A 2% drop in 2 hours. Relentless .

Is it the first stanza or the last stanza in Nina Simone's epic Trouble in Mind?

Firstly, we are in an area that bounces occur. At the lower extreme of the channel. At the 200 day moving average. At the location of the February bounce. Extremely oversold. So the market should bounce, shouldn't it?

Maybe, yes… BUT…

In 2 weeks the market has gone from 'Things are ok, recovery is back on', and the very bullish close on 09 March with a strong Buy Signal as mentioned in my last report… to 10 days of selling with several failed attempts at or near the Buy Signal level, erasing all of the gains since the February lows. The T structures have collapsed. We are looking for a new low, and this may not be it, not yet. Perhaps not by a long way

Something is wrong, and the market is attempting to evaluate just how big a problem that something actually is.

For now, the market is extemely dangerous and it is flashing a big red warning light.

It just might bounce, or it could easily sell down another 150 points (or more) this week.

For now the Sell Signal is active and the Buy Signal level is considerably higher.

So, let's take a look.

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As you can see, the selling which started on 12 and 13 of March – with what now looks like a megaphone – took the market quickly down to the Mid-Channel resulting in a Sell Signal on 19 March and the OSc oscillator responded in turn making a momentum Sell Signal on 20 March.

The tentative recovery into the FED announcement on 21 March took the market just up towards the Buy Signal line and then the selling really started with avengeance.

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The T volume oscillator is moving rapidly lower in-line with the negative breadth. Unfortunately there was an anomaly on 16 March with a spike in the oscillator to +40 presumably caused by the expiration of a huge quantity of March put options and not due to underlining buying. The red line re-balances this and places the oscillator at least 40 points lower – in the region of the previous low.

The oscillator and price action indicate that the T structures have collapsed and we should now look for a new low to be established, for stabilisation to occur and for the oscillator to start rising, preferably with some kind of W pattern, prior to the next strong recovery.

Although that may occur here, we do not have any evidence yet.

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Zooming out to the weekly chart, we can see that price has dropped back to the bottom of the old channel – marked in blue and that it is certainly challenging this, as it now seems probable that the direction has changed to a downwards or sideways volatile channel.

For now, it would seem very likely that we shall see at least another test of 2530 – the February low – and if it does not hold it brings into focus the previous lows at 2420 and 2325. This is because price did not build very much support on the way up in the Fall. In effect what is happening when price makes a low is that price is establishing its value at that level.

This is interesting because we are seeing a challenge to the break-out above the resistance projection lines from the 2000 peaks. Observe how the market reacted to the break-out above the resistance projection line from the 2007 peak, ultimately rolling over and retracing back below into the 2015 and 2016 lows to establish a very long term platform for the move higher.

I suspect that over time we shall see a similar process and so the initial levels to keep an eye upon are 2530, 2420 and 2325.

–

In the meantime, the simplicity of my proprietary price based S/T Signalling System continues to keep us on the correct side of the market, providing a timely Sell signal and a red light, for now.

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton March 25, 2018No Comments

FREE REPORTS S&P500 daily update

The road that leads to everywhere

Take the road you know, the road that leads to everywhere
Spend the time where everyone and anyone is there
Something new's already old, we've heard it all before

In, out, in and out
Here by word of mouth
It's right here right now
Feel dead or alive

We'll be gone in a while
In the blinking of an eye
So give me quality time, baby
Quality time

UNKLE, The Road, 2017

–

Welcome to the Trading the Line Free Report.

Another exciting week, and a major development.

A Buy Signal on 05 March at 2713. The market stabilises and back-tests 2700, builds a platform, moves higher, builds another platform at 2725, and then… boom, the market bursts higher on Friday to gap up above 2750 and head for the recent high at 2780. A huge day that will of course leave many wondering… what's next?

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As you can see, the Osc oscillator is now rising and supporting the strong upward momentum, the market has moved upwards through the series of declining resistance lines from the all time high, the market has found recent support at the Mid-Channel and the gray channel has turned upwards. The general direction is now up.

Of course, we may need to see some stabilisation and profit-taking after Friday's strong move up, and the market is quite a long way above the curent Buy Signal level. Some caution is still required.

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However, the T volume oscillator is making a new relative high.

We can see from the T volume oscillator that we have a major low in place – with the oscillator rising strongly from a classic rising 'W' pattern at a very low level, and then we have another higher low, also with the oscillator rising strongly. The oscillator has risen upwards through the descending lines drawn from the oscillator peaks.

In T Theory these lines represent the period of cash-build up from the profit-taking and selling within the market as a whole because the oscillator is derived from the advance-decline volume of the NYSE.

As we can see the oscillator has been generally declining since a peak at 72 on 19 December, and made primary and secondary lows on 05 and 08 February. Each time the oscillator cuts upwards through the cash-build up line it confirms and activates this T structure. The market then uses the cash-build up from the left-hand side of the T to form the right-hand side of the T. Each wave of selling produces projections for highs within the T structure.

Friday's strong push upwards through the new higher cash build up line fully re-activates the Primary T structure and the Secondary T structure combining them into one powerful structure potentially releasing further strength to the upside, with the current full extent of the T structure now projecting highs towards the end of March. We should therefore see a general continuation higher into a peak at that time. If the oscillator rises above 72 it will also activate further sections of the previous cash-build ups. How the oscillator performs relative to price is therefore relevant.

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Zooming out to the weekly chart, we can see that price does not currently want to stay in the old channel – marked in blue.

The strong move up during the Fall of 2017 pushed the market up beyond the resistance projection lines from the 2000 peaks, and also through the rising trend lines from the 2014-15 peaks until it became unsustainable.

I suspect that a similar process is happening as did when the market started to move up through the resistance projection lines from the 2007 peak in 2014. The spike down to 2530 (like the spike down to 1820 in October 2014) now defines a very long term horizontal support line that we may need to revisit in the future, if or when the market cannot continue higher. As with the October 2014 low, it may be re-visited several times over several months in the process of building a major new structure, and a platform for higher prices.

For now, it seems likely that the market will continue to explore the higher prices and the region within the rising trend lines from 2014 and 2015.

–

In the meantime, the simplicity of my proprietary price based S/T Signalling System continues to keep us on the correct side of the market, providing a timely Buy signal and a green light again, for now.

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton March 11, 2018No Comments

FREE REPORTS S&P500 daily update

Sacred Geometry

He deals the cards as a meditation
And those he plays never suspect
He doesn't play for the money he wins
He don't play for respect

He deals the cards to find the answer
The sacred geometry of chance
The hidden law of a probable outcome
The numbers lead a dance

Sting, Shape of My Heart, 1993
(Gordon Sumner, Dominic Miller)

–

Welcome to the Trading the Line Free Report.

On 09 February the market tested the 200 day moving average at 2530 – a major sweet spot for the S&Ps in a bull market – and bounced, with a vengeance, in a short covering rally that will be remembered for some time.

The subsequent move upwards through 2661 triggered an S/T Buy Signal and the market continued higher into the Mid-channel on Friday to make a short-term peak at 2754 and this, finally, initiated some profit-taking prior to the extended weekend. It was quite a week.

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Throughout this week the T volume oscillator has been rising upwards from a classic W pattern at a very low level – the signature of a new T structure being formed – and on 14 February it intersected the recent cash-build up line to confirm the prescence of a powerful T structure.

Strong momentum has also turned the OSc oscillator up from a deep low and makes a momentum Buy Signal.

The profit-taking at 2750 now raises the question: is that the end of the move?

Let's look at the evidence:

Very strong breadth and momentum indicated by the T volume oscillator and OSc oscillator support the current new T structure's projection for highs in the days and weeks to come.

A recovery of the market above a number of key moving averages provides technical support, at least for now.

Volatility remains elevated, and could easily trigger another slide in price to re-test either rising support lines or to look for renewed support at lower price levels.

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I am sometimes asked, what if you are wrong, what if the T structure isn't correct, what if the T structure turns 'bearish' and collapses?. And the answer is that you go with what you have before you, and let the market show you what is correct. This is why we use the S/T signalling system, and it will show you if we need to change our perspective.

The new T structure could collapse, and if it does we would look for a larger structure to develop in due course. We will continue to watch price and the oscillators for evidence. With volatility levels still very high, there is always the possibility of fast moves down, but likewise also fast moves back up.

Whether a pull-back into rising support is required, or whether Friday afternoon's selling is the beginning of another phase down is unclear. Watch the rising support lines and averages for confirmation of a continuation higher or the beginnings of another sell-down.

Price is currently still well above the S/T Buy Signal line and it may just be that the market got a little bit too far ahead of itself.

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As we can see from the bigger picture on a weekly chart, price became unstable above the long-term rising trend line from the 2014-2015 peaks.

Two weeks down, and one week back up.

The rapid recovery from what could be described as the lower level of a rising channel puts the market back on that trend line and how the market performs moving forward will be revealing.

For now, the long spike down to 2530 looks like an anomaly, an over-reaction, perhaps exacerbated by an explosion in volatility which undoubtably has seriously harmed a lot of traders and investors and will have taken a lot of stops out in the process.

If the market continues higher many of those shaken out by the disturbing and excessive daily range will ultimately be obliged to re-enter at higher prices and this is what provides further fuel for the bull market – the fear of missing out.

If the market pukes yet again, we may be looking at a more extensive corrective period but there will be plentiful supply at lower prices – buyers and sellers – to build a larger more powerful T structure.

Regardless, for now, it seems that 2018 has brought with it some very exciting trading and a range that is far beyond recent experience. We should expect it to continue and trade accordingly. This is a Brave New World.

–

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for what is coming next and trade with confidence:

Steve Rushton February 19, 2018No Comments

FREE REPORTS S&P500 daily update

Hurt

I hurt myself today
To see if I still feel
I focus on the pain
The only thing that's real
The needle tears a hole
The old familiar sting
Try to kill it all away
But I remember everything

What have I become?
My sweetest friend
Everyone I know
Goes away in the end
You could have it all
My empire of dirt
I will let you down
I will make you hurt

Trent Reznor, Hurt, 1995

An excellent cover by Johnny Cash was recorded on his last album, American IV The Man Comes Around, 2002

–

Welcome to the Trading the Line Free Report.

On Friday 26 January the market gapped higher and rallied to 2872 at (or just after) an important projection for a high from several of the structures, and one day after a scheduled echo high.

On 30 January the market gapped down significantly and below the S/T Buy / Cover Signal line at 2839. Failure to recover on the day confirmed the cover signal.

On Friday 02 February, the market gapped down again with a 20 point drop into the Sell Signal area at 2794, a slight bounce which failed and then the selling really starts dragging the market down, a relentless 60 points.

An S/T Sell signal at 2794.

An OSC Sell Signal at the close.

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The T volume oscillator has been in decline for several weeks, since 19 December, and is now at a very low level already (-89), and in the area that major lows can occur. The Brexit panic low was -117 for example.

So we are now looking for a low to occur and a strong bounce at some point but I suspect that the market will need a significant amount of stabilising first after this shock.

IF Friday's severe sell-off is an important low (and we do not know that yet, but it might be) then we can draw the possible T structure that could develop out of this low.

The decline of the the T volume oscillator since its recent high on 19 December describes a cash-build up line that represents the fuel that has been building as the market has been taking profits even whilst it has moved higher.

What we are looking for is for the oscillator to rise upwards and ultimately through the declining cash-build up line and this will then define the next T structure with the waves of selling from the oscillator high and from the various price highs, projecting the next series of highs in the market.

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At the moment the market looks very dangerous and volatile as it seeks for support for the first time since the late summer. As we have already very rapidly moved down to the first level support line (notice the rising line under the previous lows), it may be that momentum will continue to drive lower, perhaps towards the important 55 ema and lower edge of the gray channel.

What does seem likely is that the range of the market will continue to be expansive.

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On the weekly chart we can see that the market moved beyond the target trend-line from the 2014-15 peaks and now appears to have made an exhaustion point. Perhaps this was just an overshoot and we are now seeing a return to the trend?

–

In the meantime, the simplicity of my proprietary S/T Signalling System continues to keep us on the correct side of the market, providing an appropriate cover signal and a very necessary red light when necessary.

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton February 5, 2018No Comments

FREE REPORTS S&P500 daily update

MiLK

I have a dream that one day this nation will rise up and live out the true meaning of its creed:
"We hold these truths to be self-evident, that all men are created equal."
– Martin Luther King, Jr. , 1963

–

Welcome to the Trading the Line Free Report.

The market powers into the long weekend, closing at the top of the gray channel and above the upper extreme. The gray channel is my proprietary trading channel that describes the market's normal range. The upper and lower extremes (fine red and green lines) are my approximation of Terry Laundry's proprietary Energy channel. Trading at these levels is unusual.

An incredible 2 weeks to start the year – far beyond expectations, so lets take a look and see what's going on.

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As we can see, on 02 January the market gapped up into another S/T Buy Signal at 2686 and took off, quickly erasing all of the indications that a correction or consolidation of any kind was imminent – which was of course the predominant thinking, including mine. This appears to have released an enormous amount of bullish energy as new all time highs beget further new all time highs.

Even the recent echo high on 09 January had little lasting effect as the vacuum created by lack of sellers and most probably a lot of short sellers at the Christmas high quickly propelled the market higher and higher.

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I mentioned in my last report that the rise of the T volume oscillator (to 72) above its previous relative high was another bullish indication and potentially activated the really long cash-build-up line going back to the November and December 2016 highs, but I am still surprised at the absolute lack of corrective action.

In fact we can already see a short cash-build-up occurring since the oscillator high in December which shows that a significant amount of profit-taking is occurring within the context of the market's continual rise.

This means 2 things, that traders are taking profits only to see the market continue higher encouraging them to chase the market higher, and that the market is also leaving a significant amount of traders behind waiting to enter on any future dips as and when that occurs.

This in turn produces 2 distinct effects – a volatile unstable market, and a lot of buyers that will enter on any deep pullback.

Notice that the range has increased dramatically since the summertime, partially in response to the higher price, and I can only assume that this will continue, and that we can therefore look forward to some large (perhaps 2-300 point) swings in both directions in the course of the year ahead.

The T volume oscillator is strongly bullish and suggests that we take the longer projections of the 2 current structures very seriously indeed. That suggests to me that we should see further highs into February, March and April, perhaps even May, as projected by the full extent of the Large T structure (above).

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On the weekly chart we can see that the market has now moved beyond the target trend-line from the 2014-15 peaks and that we may be near to an exhaustion point with the market moving nearly vertically above that line.

This has synchronised with the market's move to the upper extreme of the channel and the gray channel on the daily chart and although we could certainly see the market continue to climb at these levels it would be reasonable to expect some slowing of the rise in price, perhaps even a pullback of some kind.

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In the meantime, the simplicity of my proprietary S/T Signalling System continues to keep us on the correct side of the market, providing a green light for buying (and holding on) at increasingly higher prices, regardless of the temptation to take profits (early).

The S/T Signalling System is not a black box system. It is a rigorous trading method and risk management system that will enable you to understand how to participate in the market without fear or prejudice, because it is derived solely from what the market is doing now.

There are of course many ways to participate in the market using the S/T Signalling System and how you use the system would depend upon you and your own parameters. The system has now been profitable in each of the last 5 years, averaging 369 points / year. Actively managing positions within the framework of the Signalling can produce significantly more and/or reduce risk accordingly.

If you would like to learn more about using the S/T Signalling System please get in touch.

–

Be prepared for what is coming next and trade with confidence:

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, as well as my personal Buy and Sell Signal trigger levels, please Sign up for daily Alerts & Observations. This includes access to the Members Area for an archive of all of my alerts and updates and my Explanatory Notes pdf which gives detailed explanations on all of the concepts being discussed.

Steve Rushton January 15, 2018No Comments

“Simplicity is the ultimate sophistication.”
Leonardo da Vinci

“Imagination is more important than knowledge”
Albert Einstein

“All of our days are numbered. We can not afford to be idle. To act on a bad idea is better than to not act at all because the worth of the idea never becomes apparent until you do it. Sometimes this idea can be the smallest thing in the world; a little flame that you hunch over and cup with your hand and pray will not be extinguished by all the storm that howls about it. If you can hold on to that flame, great things can be constructed around it; things that are massive and powerful and world changing. All held up by the tiniest of ideas.”
Nick Cave, 20,000 days on Earth

2026 Positions

(All numbers refer to SPX)

S/T BUY Signal at 7586 on 04 June

COVER Signal at 7554 on 03 June

S/T BUY Signal at 7413 on 20 May

COVER Signal at 7411 on 15 May

S/T BUY Signal at 6457 on 31 Mar

COVER Short Signal above 6398 on 31 Mar

S/T SELL Signal at 6543 on 26 Mar

S/T BUY Signal above 6600 at 6620 on 25 Mar

COVER Short Signal above 6567 on 25 Mar

S/T SELL Signal below 6554 on 24 Mar

COVER Short Signal above 6581 on 24 Mar

S/T SELL Signal below 6554 on 24 Mar

COVER Short Signal above 6581 on 24 Mar

S/T SELL Signal below 6554 on 24 Mar

COVER Signal at 6590 on 23 Mar

S/T BUY Signal at 6623 on 23 Mar

COVER Short Signal above 6563 at 6600 on 23 Mar

S/T SELL Signal at 6666 on 18 Mar

COVER Signal at 6693 on 18 Mar

S/T BUY Signal at 6729 on 16 Mar

COVER Short Signal above 6668 at 6698 on 16 Mar

S/T SELL Signal at 6756 on 11 Mar

S/T BUY Signal above 6826 on 10 Mar

COVER Short Signal above 6792 on 10 Mar

S/T SELL Signal at 6765 on 10 Mar

COVER Short Signal above 6772 on 09 Mar

S/T SELL Signal below 6810 on 06 Mar

COVER Short Signal above 6822 on 05 Mar

S/T SELL Signal below 6822 on 05 Mar

COVER Signal below 6849 on 05 Mar

S/T BUY Signal at 6882 on 04 Mar

COVER Short Signal above 6849 on 04 Mar

S/T SELL Signal below 6845 on 03 Mar

COVER Short Signal above 6877 on 02 Mar

S/T SELL Signal below 6850 on 02 Mar

COVER Short Signal above 6857 on 27 Feb

S/T SELL Signal at 6857 on 27 Feb

COVER Signal below 6884 at 6857 on 27 Feb

S/T BUY Signal at 6884 on 23 Feb

COVER Short Signal at 6850 on 23 Feb

S/T SELL Signal at 6837 on 23 Feb

COVER Signal at 6864 on 23 Feb

S/T BUY Signal at 6883 on 18 Feb

COVER Short Signal at 6834 on 17 Feb

S/T SELL Signal at 6888 on 12 Feb

COVER Signal at 6915 on 12 Feb

S/T BUY Signal at 6899 on 06 Feb

COVER Short Signal at 6938 on 06 Feb

S/T SELL Signal at 6901 on 04 Feb

COVER Short Signal at 6915 on 03 Feb

S/T SELL Signal at 6915 on 03 Feb

COVER Signal at 6942 on 03 Feb

S/T BUY Signal at 6968 on 02 Feb

COVER Short Signal at 6938 on 30 Jan

S/T SELL Signal at 6910 on 30 Jan

COVER Signal at 6940 on 30 Jan

S/T BUY Signal at 6934 on 29 Jan

S/T SELL Signal at 6907 on 29 Jan

COVER Signal at 6934 on 29 Jan

S/T BUY Signal above 6905 at 6923 on 22 Jan

COVER Signal at 6849 on 21 Jan

S/T SELL Signal below 6894 at 6843 on 20 Jan

COVER Signal below 6925 at 6843 on 20 Jan

S/T BUY Signal at 6961 on 15 Jan

COVER Signal below 6934 at 6925 on 14 Jan

S/T BUY Signal above 6890 at 6900 on 05 Jan

COVER Short Signal at 6864 on 02 Jan

S/T SELL Signal at 6837 on 02 Jan

Mission

It has been my Mission to create a simple but effective method for investing in the stock market, so that I would always know what to do regardless of the circumstances.

The result is a rigorous system which allows the market to tell you what to do, when to Buy, when to Hold, when to Cover, and when to Sell, and it removes the need for you to have any opinion whatsoever.

And so, I present to you the diary of my personal trading system, and a record of the signals that it is producing. You are welcome to follow me along but please understand that the information posted here is for entertainment purposes only. No recommendations are being made to buy, or sell stocks, options or futures contracts. Please consult your own financial advisor before making any investment decisions.

Please sign up for my occasional FREE REPORTS and if you would like to find out more and receive my email alerts and more detailed observations, please SIGN UP HERE

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With new commentary and Insights on the life and times of Jesse Livermore Reminiscences of a Stock Operator is the fictionalized biography of perhaps the most famous financial speculator of all time–Jesse Livermore. This annotated edition bridges the gap between Edwin Lefevre′s fictionalized account of Livermore′s life and the actual, historical events, places, and people that populate the book. It also describes the variety of trading approaches Livermore used throughout his life and analyzes his psychological development as a trader and the lessons gained through hard experiences.

“In the end, I’m not interested in that which I fully understand. The words I have written over the years are just a veneer. There are truths that lie beneath the surface of the words... truths that rise up without warning, like the humps of a sea monster and then disappear. What performance and song is to me is finding a way to tempt the monster to the surface, to create a space, where the creature can break through what is real and what is known to us. This shimmering space where imagination and reality intersect... this is where all love and tears and joy exist. This is the place. This is where we live.”
Nick Cave 20,000 days on Earth

“If you're going to try, go all the way. Otherwise, don't even start. This could mean losing girlfriends, wives, relatives and maybe even your mind. It could mean not eating for three or four days. It could mean freezing on a park bench. It could mean jail. It could mean derision. It could mean mockery--isolation. Isolation is the gift. All the others are a test of your endurance, of how much you really want to do it. And, you'll do it, despite rejection and the worst odds. And it will be better than anything else you can imagine. If you're going to try, go all the way. There is no other feeling like that. You will be alone with the gods, and the nights will flame with fire. You will ride life straight to perfect laughter. It's the only good fight there is.”
Charles Bukowski, Factotum, 1975

>“The mind is a glass floor.
The mind is the spirit’s tear.
The mind is our prior and subsequent ghost.
The mind is the Bullion Express and the blood on the tracks.
The mind is a stone door.
The silver on the backs of mirrors.
The wave that defines the coast.
It’s what the drunk grave robbers couldn’t stuff in their sacks.
The mind is the sum of all and more.
The spasm between one and zero in the Calendar of Black-Hole Years.
The contract between the lash and the whipping post.
A quilt of dreams stitched with facts.
A meaningless argument among whores.
Rain that keeps falling when the sky clears.
A masquerade party, guest and host.
A candlelit landscape of puddled wax.
The mind is what thought is for.
The parking lot at the Mall of Fears.
The fire-pit for the piggy roast.
What the soul surrendered and won’t take back.
The mind is neither either nor or.
The real center of an empty sphere.”
Jim Dodge, Stone Junction, 1990

“The war is not meant to be won, it is meant to be continuous. Hierarchical society is only possible on the basis of poverty and ignorance. This new version is the past and no different past can ever have existed. In principle the war effort is always planned to keep society on the brink of starvation. The war is waged by the ruling group against its own subjects and its object is not the victory over either Eurasia or East Asia, but to keep the very structure of society intact.”
George Orwell

“There was a student... just the other day... who said that my problem, if one's nature is a problem, rather than just problematic, is that I see things in terms of victory or death, and not just victory but total victory. And it's true: I always have. It's either victory, or don't bother. The only thing worth doing is the impossible. Everything else is gray. You're born... as a man... with the nerves of a soldier, the apprehension of an angel, to lift a phrase, but there is no use for it. Here? Where's the use for it? You're set up to be a philosopher or a king or Shakespeare, and this is all they give you? This? Twenty- odd years of school which is all instruction in how to be ordinary... or they'll fucking kill you, they fucking will, and then it's a career, which is not the same thing as existence... I want unlimited things. I want everything. A real love. A real house. A real thing to do... every day. I'd rather die if I don't get it.”
The Gambler (2014), Dir. Rupert Wyatt