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