By Gary Dean
2018 has been pretty much a nightmare for the majority of traders/newsletters. Over the past 9 years, it was fairly easy to predict what the market was going to do-GO UP! If you were a technical trader, it was hard, because you had to teach yourself to ignore everything and just look for support areas. But something has changed in 2018 and something has come into town that many traders may never have seen before. VOLATILITY!! If you don’t like how your trades have done in 2018, you aren’t going to like they fair in the coming years, because volatility is not going anywhere any time soon.
Volatility is something I love and our newsletter thrives on. Most traders/newsletters hate it, because they are using the wrong methods to trade it. Swing trading in a non volatile market is quite simple. Get long a trade and hold it with a stop at entry for 3-6 months. The trouble with that trading formula in a volatile market, the “Time” piece is off and more times than not, traders watch winning trades turn into losing trades or stopped out at break even. YOU HAVE TO KNOW THE “TIMING” OF UPCOMING TREND CHANGES IN ADVANCE!!! Once you know “WHEN” to expect the turn, you simple manage your position with stops.
W.D. Gann, who is considered one of the best traders who ever lived said “Time is the most important factor when it comes to making trading decisions, so incorporate the time factor into your trading. At Sentiment Timing, “Time” is a major aspect of our newsletter. Woody Dorsey, who has been predicting market reversals “Time” for some of the largest financial institutions in the world for the last 40 years, is considered by many as one of the best market timers in our time. My job, the technical part of the newsletter or “where” to expect the reversal to take place “Price” is a lot easier knowing “when” to expect these reversals, weeks in advance. You can see for yourself how our calls have played out in this free video
As you just saw in the video, each one of the big reversals were predicted weeks in advance-sometime months in advance. As we approached these reversal dates that Woody’s predicted, I just have to look for support/resistance levels and then wait for a buy/sell trigger to get us long/short. As long as we have VOLATILITY in this market, you can make a fortune trading both the long/short side. These are not day trades either. These moves typically last weeks and are usually somewhere in the range of 100-300 S&P 500 points. If you only got into 3 or 4 of these big S&P 500 trades per year, you would be beating the benchmarks by leaps and bounds. In 2018 alone, using “time” and “price” in the Sentiment Timing Newsletters, the S&P 500 has moved up/down almost 900 points!! Each one of these big swing trades was predicted weeks in advance. You can imagine how much has been made in 2018!!
Below are some pieces of our last report. I have to block out the reversal dates, as our premium members would not be happy if we were giving them away. But notice the last top date (04/18) followed by weakness into early May–that is exactly what has taken place. You will notice the sentiment charts, which I will include in next weeks article. If you would like to see these topping dates, you can subscribe here for our 2 week trial. Subscribe Now
MARKET TIMING:By Woody Dorsey The profiled Bounces into “4/18” reversed and the market to turned sloppy “into early May which would set up for strength into Dates are for members only-2 week free trial. Thus, the upside is open. How the market uses this advantage will tell me about the duration of the Range function.I am looking at Dates are for members only-2 week free trial. as trading high potentials. That can be refined after I see more trade.
SENTIMENT INTERPRETATION: The Dorsey Tactical Market Sentiment registered an optimistic spike to 93% Bullish on 4/17 which aligned perfectly with the timing profile. The 2595 Low on 5/3 set up a bounce into yesterday’s highs. The overall short term sentiment profile still suggests that the tactical corrective vibration has ended for now.
The DORSEY Intermediate Market Sentiment has been in a nominal recovery but remains essentially sideways as befits a Range. This fits with my profile: Give the market time to create a defined sentiment extreme or, over failure before coming to an interim sentiment conclusion.
MARKET SUMMARY: The profiled recovery due into 4/18 resolved into an expected early May low. The market has responded with initial bounces. This still looks like a Range rather than a Trending function. The nominal timing remains for, eventual upside into Dates are for members only-2 week free trial. Never Believe in stocks. Thank you, Mr. Market
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TECHNICAL VIEW by Gary Dean: Last week I was looking for a low near the support zone between 2610-2585. It came down right in the middle and gave us a nice buy trigger at 2634, with a potential target area of 2683. The SPX followed the road map again and reversed at 2683 and has done some backing and filling since. I would like to see the 2653-2642 support zone come into play, where I would look to get long again, with potential targets of 2700-2720. I am not sure we make it down to that support zone, but it would make sense if it did.
There are bearish divergences on the 15 minute charts, which has me being a little patient to jump back on the long side. There is no guarantee these divergences will play out, but I am not a big fan of ignoring short term warning signs and why I moved to cash. It did break through the bull flag I pointed out last week and I see higher levels once this pull back ends.
We saw buyers step in after a quick head fake move below the 200 dma and we are now seeing sellers stepping in at the 50 dma. If the bulls can push above the 2673 and stay above, I believe 2720 and maybe even 2800 coming into play. No use worrying about the bigger picture wave structure at this time.
Summary: The SPX had a nice bounce off the lows and was showing some bearish divergences on the 15 minute charts. This suggest some short term backing and filling down to the 2654-2642 support zone. No guarantee that will happen, but it would make sense and where i would be looking to buy. If the bulls can push above the 2683 resistance, I see 2700-2720 coming into play in a fast manner. We have NOT yet seen the face ripping short covering spike hit yet, but I believe we will see it by month’s end.
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