Today’s blog is going to be short and sweet. Celebrate, for I shall avoid waxing eloquent, and get right to the point! Each of the 4 notations below are encapsulated in a capitalized summary sentence. Here goes:
- Reversals are often signalled by short-bodied candles. Short bodied candles occur when the market rises or falls fairly aggressively (or both) on a given day – then settles in very near the open of the day. Note on the chart below the constancy of market reversals after such candlesticks (green boxes) within the current consolidation pattern. THERE IS A REASONABLE CHANCE FOR A NEARTERMED MARKET RALLY AT THE PRESENT TIME BASED ON THIS PATTERN.
- The Nasdaq, Small capped stocks and financials experience seasonal strength from around mid-December into the winter (or early spring), according to Thackray’s Guide. This can be especially true if the S&P has drawn back by 4% in December. Research done by sentimentrader shows that markets are higher 83% of the time a month after a poorly performing December. SHORT TERMED TRADERS MAY HAVE AN OPPORTUNITY TO EXPLOIT THESE OVERSOLD SECTORS OVER THE COMING MONTH(S).
- Beyond a seasonal/oversold rally per the notation above – I would be inclined to be cautious surrounding the former NASDAQ leaders (ie FANGS, etc) after January. Take a look at the similarity in parabolic patterns before the 2001 tech crash and recent NASDAQ activity. BEYOND A TRADE INTO FEBRUARY OR SO, I WILL BE AVOIDING THE FORMER HIGH FLYERS unless the longer trendline proves to hold after a test.
- In July —I noted on this blog that the USD was poised to rise (CDN$ fall). As you can see on the chart below, it has done exactly that since I wrote that piece. The green trend channel suggested ahead of time that the peak might occur exactly where it actually occurred (0.78). I believe the loonie will find a temporary bottom in January or February, and will rally from there. The trough is targeted to land in the $0.72 to 0.74 area. Below the price chart of the loonie is the seasonal chart. Take note that the tendency is for weakness on the loonie vs. USD until late January. Thereafter the loonie should rise into the spring. This works perfectly with the CDN$ trend channel timing. The loonie is approaching, but not quite at, the bottom of the trend channel. In other words, I am betting that we will see the low on the loonie by late January or so, and that low will reside in the 0.72-074 zone. Should I be correct, I WILL WANT TO CONVERT SOME OF MY USD SECURITIES TO CDN$ AT THAT TIME!