Category Archives: Indicators

The Usual Suspects

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Over the past few months a potent emotional cocktail of fear and confusion has been seeping into the consciousness of market participants. It’s not just that equities are steadily heading lower whilst producing more and more bearish context above to be overcome sometime in the future. What’s worse is that there appear to be very few places remaining to sit out the storm. The exception of course being the two usual suspects – bonds and gold. (more…)

RL Track Records 2012-2016

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Today we are going to do something different: often we receive enquiries from prospects that would like to know about the type of returns that can be obtained using the Retracement Levels models. We know from incubator accounts traded with real money and also from backtesting of our models that certain type of results are possible and are certainly above simple BUY & HOLD returns, however for a number of reasons it is not possible to provide this information to our clients because:

a) trading is so personal and each trader inevitably blends his own bias into our systematic strategy/model, so in the end not all traders will follow our system to the letter

b) most traders will fail even if you give them all the tools and support to be successful, because trading is very difficult, it requires capital, stomach, self-control, far-reaching intelligent/strategic thinking and unfortunately it’s hard to find all these qualities in one single individual (that is also why we want to use computers to trade or to support our investment decisions).

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World Market Index: Is This Capitulation?

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I last wrote an update about the World Market Index on January 8th.

Since then, this index has continued to drop below the critical support level of 1600 and price now sits just below the next support level of 1550.

As you can see from the 5-Year Daily chart below, it’s a long way down to major support at 1350. All three indicators point to lower prices…but, the swings are large, and we may see some kind of bounce, although it’s not clear as to when or at what level that may occur.

If the U.S. markets are going to lead global markets to some kind of bounce, it’s worthwhile monitoring the price action of the SPX and the SPX:VIX ratio, as I discussed in my post of January 15th, for possible clues as to timing of such a bounce.

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Bear Market? Maybe…

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So, here we go, the year 2016 started with a bang, but a reverse one: the market imploded  (actually it started to go down 2 days before the end of the year) and now we may be starting to see what many Slopers have desired for a long time: a BEAR MARKET.

Is it finally going to happen? Probably yes, it’s overdue. We think 2016 has really a high chance to see at least a 20% correction, but you know as it goes with predictions, everyone make one and then in the end they are all very unreliable as it is hard to actually predict anything in the stock market, aside from framing statistical behaviors (e.g. price patterns) that seem to happen repeated times in history and thus are somehow “predictable”. That is what we do at Retracement Levels.

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QLD Long (by Retracement Levels)

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QLD has been down 2 weeks in a row and 2 days in a row. Although not guaranteed, a bounce is probably coming in the next 1-3 trading days.  This is the principle of short-term “trend reversal”.

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Retracement Levels has developed models to trade several ETFs, Futures and FX markets intraday, DAILY, WEEKLY and MONTHLY. More details on the markets covered are on our website, today we want to show you an example of our DAILY LONG model for QLD: this graph below is part of our model and shows where QLD rebounds more often during retracement patterns that are historically similar to the retracement pattern we are seeing today.

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