Are stops only for buses?

david paul 150 wideIt’s a tough market, and the most difficult I have encountered for many years for directional traders. The options players are rubbing their hands as a period of sideways churn properly played is a license to print money for those fellows who have studied the art. We have had some great times over the last few years and will have again. Let’s just manage risk carefully until direction returns.

The period of churn has produced many whipped Confirmed Call signals on VectorVestUK, but the last down signal needs to be specially heeded. The Confirmed Calls are VectorVest’s longest, and as their name suggests, most confirmed timing system. The signals can be accessed by the drop down menu below the MTI chart. If you cannot find them, then please call support. It’s vital that your trading is in sync with the flow of the overall market.

If you examine the Market Timing Graph, there have been 4 Confirmed Up signals since the last week of 2013. In the first three of these, the VV Composite UK went on to make a new high prior to turning and signaling a Confirmed Down.

In the case of the last Confirmed Call on the 2nd of May, this rolled over to a Confirmed Down with first making a new high. This is a falling top and it’s a bearish signal.

My Mentor MR W D Gann always used to say the best time to sell was at the first falling top.

The VectorVest Composite is still trading above the 200 day average, and that’s good, but the Primary Wave is down and there are 375 shares falling compared to 286 rising on the LSE.

In the US, the Dow is sitting in range and at present pushing on resistance at 16600. Yellen’s talk last week nearly pushed the 30 share index through that level which has been a barrier all of 2014. A clean push through and a weekly close above 15600 on the Dow will almost certainly take the LSE with it. Seasonality would seem to be against a break if it does not come soon as we move towards the end of May.

Until you observe some green on the Color Guard, please watch your stops carefully over the next few days.

David Paul
May 11th 2014

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