US GDP pleased the market yesterday. The S&P 500 closed up 2%.
What's next? First, it appears that a downtrend is well underway, see chart
Beside the Elliott wave count, a short term trader would assume that the trend is down. The rally caused by the release of the US GDP yesterday is a counter trend rally.
If you believe that the trend is down, the counter trend rally provides an opportunity to go short. We'll see how things pan out at the open but according to Elliott wave analysis the decline should continue.
One way to get the direction right is to use the BTI, our unique directional indicator. It became bearish on 16 October and is still pointing down.
To learn more go to www.eyield.co.uk
Friday, October 30, 2009
Is there enough appetite for equities?
The behaviour of the BTI changed because expected decline failed to materialise, see chart.
When a decline does not occur within a limited period of time, investors regained confidence and we have a situation in which the bulls have the strong hand.
The fact that the FTSE made a new high on Friday supports our view that the FTSE will continue to push higher in the near term prior to making a top. Even the surprise drop in GDP did nothing to stop the rally.
Obviously the good US existing home sales numbers helped the market and there is a willingness to buy at these levels, but we must not get carried away, the market will probably continue higher but we are near the top.
Our timing indicators are approaching overbought and the wave count is near the end, we are in the final stages of the rally.
To learn more go to www.eyield.co.uk
When a decline does not occur within a limited period of time, investors regained confidence and we have a situation in which the bulls have the strong hand.
The fact that the FTSE made a new high on Friday supports our view that the FTSE will continue to push higher in the near term prior to making a top. Even the surprise drop in GDP did nothing to stop the rally.
Obviously the good US existing home sales numbers helped the market and there is a willingness to buy at these levels, but we must not get carried away, the market will probably continue higher but we are near the top.
Our timing indicators are approaching overbought and the wave count is near the end, we are in the final stages of the rally.
To learn more go to www.eyield.co.uk
Monday, October 12, 2009
A busy week starts with market heavyweights Intel, J&J, Google, Bank of America and GE all reporting earnings.
On the economic front we will have latest reports on US retail sales, consumer price index and industrial production. Bull trends often ends on good news so it is possible that this week could be good in terms of news, but the market may stall and reverse. An example of such behaviour occurred on 23 September when the good news pushed the market to new high, that proved to be the top, see chart.
There is still a bearish divergence between the 34-day BTI and the FTSE, once again this behaviour is associated with a market which is near the top. For this reason there is good chance the FTSE's rally will end this week. In the near term however, prices are likely to rally to 5300, see:
http://www.eyield.co.uk/wavematrix/examples/ftse_1001.htm
To learn more go to http://www.eyield.co.uk/
On the economic front we will have latest reports on US retail sales, consumer price index and industrial production. Bull trends often ends on good news so it is possible that this week could be good in terms of news, but the market may stall and reverse. An example of such behaviour occurred on 23 September when the good news pushed the market to new high, that proved to be the top, see chart.
There is still a bearish divergence between the 34-day BTI and the FTSE, once again this behaviour is associated with a market which is near the top. For this reason there is good chance the FTSE's rally will end this week. In the near term however, prices are likely to rally to 5300, see:
http://www.eyield.co.uk/wavematrix/examples/ftse_1001.htm
To learn more go to http://www.eyield.co.uk/
Thursday, October 8, 2009
UK Real Estate
It looks like the UK Real Estate sector has turned down, see
In terms of Elliott wave analysis, the rally from the March lows is a counter trend in three legs A,B,C. Correction are in three waves so here the main trend is down and the correction is upward. In a correction wave A and C are in five waves [i,ii,iii,iv,v] as shown on the chart. This is a textbook zigzag and if correct prices should not return to the top, the long term bear trend has resumed.
More research at www.eyield.co.uk
Wednesday, October 7, 2009
Let's start spread betting
Unlike traditional investing, spread betting enables you to make geared trades. When you spread bet on shares you can invest up to ten times the amount of money you have in your spread betting account. For indexes such as the FTSE 100 the exposure is even greater, up to 20 times the money you have in your spread betting account. As a result any gain you make on a single trade is magnified. If you have £100 in your spread betting account and buy the equivalent of £1000 of shares and the shares go up by 10%, you've made £100. An increase of 10% in the underlying stock translates into an actual return of 100% or ten times greater.
To learn more check http://www.eyield.co.uk/
To learn more check http://www.eyield.co.uk/
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