At the beginning of this (thus far) horrible month for me, I felt the need to reach out and get some help. I wanted to get recommendations and insights on technical indicators, which for most of my many years as a technician and trader I eschewed as too "lagging" to be helpful. Given the kind of market we've been in for over a year now (spasmodic ups and downs), I felt it was time to get some better cycle management into the mix.
I received a ton of emails. Some of the snarkier parts of the web described me as "lost", since I was casting about for new ideas. Apparently "willing to learn new techniques" is synonymous with "lost", so there you have it.
In the meantime, I've carefully read the emails and looked at literally hundreds of indicators and thousands of pages of books. I'm trying to keep things simple, and I've landed on a handful of indicators I think will be helpful in finding out when it's time to "Bail Out And Wait". I'd be interested in whatever comments you have (on the blog please; I don't want to deal with another email avalanche, unless you have something you absolutely don't want to share with anyone else).
You will be shocked to see TOS Charts being used here instead of my own ProphetCharts, but there are one or two things I can do in TOS Charts that I cannot yet do in ProphetCharts, and I have no problem using this platform for my cycle analysis.
The first one, offered to me from our beloved Fujisan, is Persons Pivots using the rather novel OPEX as the time basis. This did as astonishingly good job calling the last two major turning points (although I notice it would have been not very helpful prior to this, so I am not going to fall madly in love with this, or any other, indicator).
Next up is a pair of indicators – the McClellan Oscillator and the Fisher Transform – which appear beneath the Persons Pivots chart on my screen. This trio seems like a good way to get a sense of major turning points (the price chart being used in all these examples, by the way, is the /ES)
Finally, there is the Acceleration Bands study:
As you can see by the circles above, this also did a fine job spotting major turning points.
Now obviously, I'd love to turn back the clock and have caught these turning points (that's the understatement of the century), but the point is that, as traders, it's important to keep an open mind to learning new techniques. 99% of the stuff out there is just "noise", but if you're willing to do the work, you can find a few gems. I think I've honed in on some genuinely helpful studies above, and I'd love to hear your thoughts.
That's it for me today. Trading isn't that fun lately, so I'm not feeling particularly chatty. I'll see you in the morning.