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THE OFFICIAL MAGAZINE OF TECHNICAL ANALYSIS

TRADERSWORLD
Price Migration Theory
Concepts and Strategy
June/July/August 2017

The Key to Speculation in


the Gold Market

W. D. Gann - Start Here!

W.D. Ganns Pattern Trading


Method

COMPUTERS and ELLIOTT


WAVE

Quick Profits with Andrews


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Divergence Analysis and THE 18-YEAR CYCLE IN U.S. STOCKS


DVAN SMART LINE
INDICATORS 2017 The Opportunity Of a Lifetime?
Month Top?
Making Cyclical Analysis
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Contents TradersWorld Magazine
June/July/August 2017 Issue #66 Premium Subscription
Price Migration Theory Concepts and Strategy Get everything we have for only $19.95 per year
by Chris Vermeulen 09
Save 50% over our regular subscription of $39.95
The Key to Speculation in the Gold Market
by L. David Linsky 17

W. D. Gann - Start Here!


by Gordon Roberts 23

W.D. Ganns Pattern Trading Method


by Daniel T. Ferrera 30

COMPUTERS and ELLIOTT WAVE


by Jacob Singer 34

Quick Profits with Andrews Geometry


by Ron Jaenisch 40

Systematic Trading and Gambling QUARTERLY MAGAZINE SUBSCRIPTION


by Thomas Barmann 47 Read articles explaining classical trading
techniques, such as W.D. Gann, Elliott Wave,
Divergence Analysis and DVAN SMART LINE
INDICATORS astro-trading as well as modern technical
by Dyer Kennedy 57 analysis explaining indicators in eSignal,
NinjaTraders, MetaStock & Market Analyst.
THE 18-YEAR CYCLE IN U.S. STOCKS
by Raymond Merriman 62
COMPLETE BACK ISSUES OF TRADERS
2017 The Opportunity Of a Lifetime? WORLD Magazine (ISSUES 1-64)
by Andrew Pancholi 70 You also get our complete archive of 60 back
issues from 1986 to present. This, contains
Making Cyclical Analysis
Human-readable for Traders articles, product reviews, hundreds of chart
by Lars von Thienen 78 examples, how-to-trade articles and much

How To Build A System Into Your Chart


by Steve Wheeler 84 format, which you can read online anytime.
In every issue, you get the information
Right on Time you need to trade the markets better with
by Rick Versteeg 90 charting, astro, cycles, oscillator tools.
Is the GBP/USD at a Multi-Month Top? Works for stocks, bonds, futures, options.
by jaime Johnson 95

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Day Trading in Todays

1-800-288-4266
Higher Risk Markets
by Mohan 108

WD GANN & SUNSPOT CYCLES


by David Burton 116
www.TradersWorld.com
Reading Divergence with Support & Resistance on www.TradersWorldOnlineExpo.com
the Forex Market or e-Minis
by Gail Mercer 125
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10 www.tradersworld.com Jan/Feb/Mar 2013
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Price Migration Theory
Concepts and Strategy
(What happens when reversion theory fails)
By Chris Vermeulen

One of the most dramatic and clear examples of capital and price migration theory has recently
taken place across the globe. Many investors failed to understand this concept as they were
focused on what many perceived to be more of the same. When a disruptive event happens,
as we've recently witnessed in the UK with their Brexit vote as well as the US Presidential
elections, we begin to see what happens when capital must relocate and shift to address
immediate concerns. This is why we call this the Price Migration Theory and it is the opposite
of Mean Reversion Theory.

In nature, most living organisms operate in two modes; Survival mode or Populate/Flowering
mode. When the environment is stable and healthy for the organism, it naturally transitions
into Populate/Flowering mode so that it can attempt to expand into this healthy environment
and expand its presence within the environment. When the environment becomes hostile
or incompatible with the living organism, it naturally transitions into survival mode so that it
can attempt to sustain itself and ride out the hostile environment. If the living organism is
transitory, it may chose to attempt to migrate to more suitable environments (North, South or
anywhere that is not hostile). Many natural species through history have illustrated this natural
phenomenon.

Within this study of migration theory, we are attempting to apply the same concepts to price
exploration and capital transitions. We believe capital, as an asset that is similar to a living
organism, thrives in healthy environments (where risk is tolerable and ROI is acceptable) and
is destroyed or killed in hostile/incompatible environments (where risk is excessive and ROI
is diminishing or destructive). Therefore, the concept of capital migration becomes a viable
theory that is more evident at times like now where recent global environmental events have
dramatically altered more traditional norms.

One aspect of this theory is that perception is key to understanding intent of capital. If one
believes the current environment for our capital is acceptable (perceived to be adequate), then
the intent of that capital will likely not change. If one believes the current environment for our
capital is at risk, becoming more hostile or incompatible, then the intent of that capital will likely
change (very quickly) to address these issues and find a more acceptable environment. The
key to all of this is the current perception of the global economic environment. If I perceive the
current environment to be acceptable, then I will likely not change my intent. If I perceive the

WWW.TRADERSWORLD.COM June/July/August 2017 9


current environment to be more hostile, then I will likely make changes to my intent and chose
to alter my plans and deploy my capital into other, more suitable, solutions. Another way to
look at this is a global economic shift away from more traditional capital deployment.

NQ Chart

This weekly chart of the NQ clearly illustrates the pre and post event transition of capital. The
Pre event (US Presidential election) showed price consolidation beginning in early 2015 and
becoming more evident as the US election cycle heated up in mid-2016. We've drawn price
range lines in blue to illustrate how wildly capital variances became throughout a tumultuous
election cycle. As the environment became more clear further into the US election cycle, one
can see how the NQ price became more stable near the upper portion of this pricing range. At
this time, we believe the perception was that the environment would not become disrupted
enough to risk capital migration. We also believe throughout much of 2015 and 2016, large
amounts of capital were sidelined as a means of protecting (survival) the organism from
unknown environmental risks. After the US election cycle completed, one can clearly see the
renewed migration/deployment of capital into the tech heavy Nasdaq as a result of renewed pro-
business discussions and policy. Capital migrated away from risk and towards new opportunity
in a natural process very similar to transitory migrations of other living organisms.

SOXL Chart

This weekly chart of the SOXL (3x Bull Semiconductors ETF) presents an even clearer picture of
the capital migrations we are discussing. One will notice how complacent price exploration was
within this ETF through 2013, 2014 and early 2015. Then, near mid-2105, capital migration
began to search for alternate environments and exited the semiconductor sector. The US
election cycle officially began near March 24th, 2015 when the first GOP contenders entered the
race. This was followed by the April 12th, 2015 announcement by Hillary Clinton to enter the US
Presidential race. We've placed RED and BLUE vertical lines indicating when the GOP and DEM

WWW.TRADERSWORLD.COM June/July/August 2017 10


candidates first announced their participation in the election cycle. We've also drawn shaded
boxes highlighting the lengths of each primary event cycle. These boxes end on the date a clear
primary winner was selected. Notice how capital exited this ETF throughout the more hostile
environment of the election cycle primaries and began to migrate back into this sector as the
environment became more tolerable for ROI.

We believe this type of capital migration will become much more evident across the global
financial markets over the next few years due to recent economic and political factors that
are at play currently. Recently, Moody's downgraded China's credit rating. Within a few days,
Moody's downgraded Hong Kong debt as well. Within hours of these events, China pegs the
Yuan to the US Dollar in an attempt to calm global markets and support their fragile economy.
The interesting perspective of this move is that it may have created a slow bleed for trillions in
china's debt related to a US Dollar spread play.

These two events are critical to the perception of a hospitable capital environment for global
markets. These two events are also critical to understand migration theory of global capital.
The big question to ask yourself is how are you going to stay ahead of the potentially $2+
trillion capital migration that may be the result of these events?

We would like to offer a few hints with regards to our perspective on these events.

Crude Light Chart

Crude is likely to continue to be under pressure as we believe continued supply will outpace
demand in conjunction with the recent global economic changes that are playing out. We
believe short term support will attempt to hold pricing above $48.60 before breaking lower to
near $45.00. This $45.00 support level is the last support leg before attempting a move to near

WWW.TRADERSWORLD.COM June/July/August 2017 11


$36.50. It is at this point that we believe price exploration and capital migration will begin to
support pricing near these levels. It may take quite a bit of time below $40.00 before capital
perceives Crude to be an adequate environment for renewed capital investment.

Gold Weekly Chart

We believe the likely disruptions in the global markets will drive precious metals prices in one
of two modes; either immediate price exploration higher (Possibility #2) or an immediate retest
of lower price exploration before attempting a higher move (Possibility #1). It is our believe
the the most likely outcome is Possibility #1 because we believe capital will migrate away from
precious metals, briefly, in an attempt to migrate and be deployed in other, more strategic,
environments before realizing the need to redeploy into the metals markets. In other words, we
believe there are going to be a number of other dramatic and opportunistic capital migrations
across many global markets that will drive capital away from the metals briefly. Eventually, we
believe this capital will return to the metals markets in a mass migration (likely near the end
of 2017 Oct through Dec). It is our belief that we will see one more opportunity to acquire
metals near December 2016 lows before the real run begins.

WWW.TRADERSWORLD.COM June/July/August 2017 12


In conclusion, it is often difficult for anyone to properly determine and understand the way
capital and price exploration works in a global environment. We don't expect all of you to
completely grasp the nuances of this theory or the processes and understanding of capital
market opportunities that may be presented by these massive capital migrations. We try to
stay ahead of them by studying many facets of the global markets and alert our clients to these
moves using our proprietary Momentum Reversal Method trading strategy.

You can learn more about our unique technology and learn how to take advantage of these
moves at ActiveTradingPartners.com or AlgoTrades.net. Otherwise, remember the analysis we
are sharing with you and watch how it plays out.

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Call: (844) 692-5468 Email: info@AlgoTrades.net Visit: www.AlgoTrades.net

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WWW.TRADERSWORLD.COM June/July/August 2017 15
The Key to Speculation
in the Gold Market
A Scientific Correlation and Proof as to When &
Why the Gold Market Makes its Tops and Bottoms
Including 100 Years of Projections out to 2100

GIVES ALL MAJOR TOPS & BOTTOMS IN GOLD FOR 100 YEARS!
THE SECRET OF GOLD REVEALED!
THE GOLD MARKET HAS BEEN SOLVED!
A valuable mathematically based pattern in the Gold
This book reveals a scientifically based proof Market has been discovered which provides a series of
which accurately predicts when the Gold Market safe and highly profitable investment opportunities in
Gold for many years into the future. The book lays out
will make its future major tops and bottoms. It this unique discovery of a highly accurate, scientifically
based proof foretelling when Gold will make its tops
provides exact projections which since 1974 have
and bottoms within a very narrow time window with an
had an accuracy rating of over 90% - 99%! 90-99% accuracy.

The Gold Market possesses a previously This powerful insight has proven accurate in
unknown but now identified hidden pattern, forecasting all the Gold Markets primary tops and
bottoms over the past 40 years, with further verification
timed by a series of specific cycles which will over 750 years. It can be applied to any investment in
allow any trader to capture and profit from Golds any highly-correlated or Gold related financial
primary swings & big moves for the next century! instrument, including physical Gold, Gold related
Stocks, Options, ETF's, Futures, Bullion, Coins or
this breakthrough discovery Jewelry. Whatever level of investment experience one
may have, whether a beginner or professional, this
reveals the underlying structure information will provide an invaluable edge for trading
of the gold market itself! the Gold market for decades to come!

FOR A DETAILED WRITEUP & EXPLANATION OF WHAT THIS BOOK TEACHES, SEE:
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The Key to Speculation in
the Gold Market
By L. David Linsky
Key Pertaining to or containing a solution that affords a means of clarifying or resolving a
problem.

When investing the markets, one is always looking for a signal, or a tell from the market
in order to initiate a trade. Most use technical analysis, which comprises of a wide array of
oscillators of various flavors and colors to look for various signals from the market. Others
use numeric ratios or fractal based systems such as Elliott Wave analysis, cycle counts, fixed
geometries, daily counts, percentage moves or other numeric ratios, and time cycles. Then there
are more esoteric methodologies based on natural laws.

Regardless of the methodology one employs, the primary objective is to have a very strong
indication or confidence of when a market will turn.

This article is about the Gold market and the proprietary cycles I discovered in the book entitled
The Key to Speculation in the Gold Market. These analyses can be applied to all markets
relating to gold in any way, which includes physical gold instruments like gold futures and
options, mining stocks, or todays ETFs like GLD which is physically backed by gold, or GDX
which is backed by gold mining stocks. There are also many hybrid instruments, or leveraged
ETFs, that try to maintain a 2X or 3X ratio of daily moves, both bull and bear in gold related
instruments. Some of these symbols are NUGT, JNUG and DUST.

These leveraged ETFs like NUGT, whose performance is based upon the NYSE Arca Gold
Miners Index, try to achieved these leveraged returns from the use of futures contracts, short
positions, reverse purchase agreements, options, swap agreements and similar exotic trading tactics.
These ETFs can offer spectacular returns if youre on the right side, or can vaporize your capital
quickly if on the wrong side.

Through my market studies, I have discovered specific and repeatable cycles of varying length
in the gold market, many of which have proven themselves to have very high accuracy ratings
over the past 40+ years. These accuracies can range within days, weeks, or sometimes a couple
months in a very long term cycle. But what is most important, is that these specific cycles have
shown over the past 40 years that each specific cycle has a personality with regard to the nature
of the timing window.

What a timing window personality means is that Cycle A has shown to have a repeatable timing

WWW.TRADERSWORLD.COM June/July/August 2017 17


window of a handful of days or less, while Cycle B may have a repeatable timing window of a
couple weeks, and Cycle C may have a timing window of a couple months. These timing window
have shown to be stable over decades so far, which is most intriguing and significantly validates
these cycles.

So, what is found to be interesting about such signals, is that though cycles may time at a
specific point, different cycle types will not activate until a further time extension is added on to
that window. Some cycles react right at the signal point, while others delay a consistent number
of weeks or months before the effect is seen.

How unique is it to know, with a very high degree of accuracy, when a cycle will complete itself
and within what kind of time frame, days, weeks, or months. This gives one a very strong
confidence level of when it is a good time to take a specific position either long or short.

This book contains a detailed analysis of the Gold market that would generally be considered
most useful for longer term position trades, in that it clearly identifies the major trends of the
Gold market, identifying the major tops and bottoms that Gold makes, year after year, with great
accuracy in the 40 years since Gold has been freely traded.

What is interesting is that these same cycles can be seen to affect the Gold market over the
previous 750 years, even when the price of Gold was fixed. This demonstrates that there are
natural laws or causations that, even when attempted to be controlled by man, through price
fixing and the suppression of free markets, still make themselves seen in geopolitical situations
relating to the underlaying commodity.

To illustrate a couple cycles covered in my book, lets look at the price action in gold over the last
year or so. Below we have a chart of gold from late 2015 to May of 2017.

WWW.TRADERSWORLD.COM June/July/August 2017 18


Some of the cycle work covered in the book provided the above projected dates for pivots in the
gold market. Other cycle work provides projected dates of greater duration and others of shorter
duration.

Over the last 40 years Gold has averaged a return of over 37% per year, assuming you knew
when to go long and when to go short. Todays 2x and 3x ETFs would have yielded significantly
higher returns per year.

For years, everyone has been bombarded with commercials telling them to buy gold, and
everyone that bought gold since the 2011 top has lost a significant amount of money. No one
knew the bull market in gold was over back in 2011, but my work clearly projected that major
top to within 5 days.

Gold was screaming higher, and with gold at a price of around $2000 an ounce, the so-called
experts were talking about $5000 gold, but the run was over, and they simply didnt know it.
Those who understood how to read the underlying pattern in gold, would have clearly known
the top was in, and would have had a tremendous shorting opportunity allowing them to build
significant wealth since that top. But unfortunately for most, these cycles underlying the Gold
market are known by very few, and most people lost a significant amount of their money
attempting to buy gold over the ensuing 5 years.

So, the question remains, for everyone that is interested in investing in gold for gain, they
should be asking when is the bear market over and when will the next bull market begin?

I am confident my book answers this question quite precisely. At least history is on the side of
my work, which has been extremely accurate over the past 40 years, calling significant pivots in
the gold market within days, weeks or at very worst, a couple months. For the pivots that have
time windows of a couple months, we would be talking about a move that may last over a year
or more, so that window is still a small time frame considering the length of the expected move.

The analyses contained in my book should enable any trader to profitably invest in or trade
the gold market. Whether ones portfolio is large or small, or even if one has never considered
investing or trading in gold before, my work will provide anyone with a unique edge providing a
valuable asset to ones trading decisions.

It doesnt matter whether someone has ever invested in or traded gold before. Gold is simply an
investment instrument, and is no different than any other investment. What will make this trade
different in the future is that I have discovered some proprietary cycles that are very unique to
the gold market which should enable investors and traders to have a significant advantage in
trading or investing in gold, by knowing in advance where its major tops and bottoms will be
long into the future.

WWW.TRADERSWORLD.COM June/July/August 2017 19


This is not a trading course, this work is specific to the gold market, and identifies many cycles
which are unique to the gold market. I provide the exact dates of when to go long and when to
go short in gold for the next decades to come. Readers will thoroughly understand all major and
some minor moves in the gold market, and when to be long, and when to be short.

This book illustrates these very unique cycles I refer to, which have a very strong track record
backed by 40 years of historical data showing exactly when gold will rise and fall. I further
discuss over 750 years of data on gold that continues to support the major cycles discussed
in the book. Gold simply responds to certain time frames for whatever reason. The reasons
themselves can be debated, and are considered in the book, but the data and hard facts present
an undeniable proof as to the timing.

This work is unlike anything on the market that I am familiar with, and I believe I am familiar
with most works out there. This is not Delta, or anything similar to what other well know authors
of published market letters offer. This work is unique, accurate, and has a 40+ year history of
accurately projected the primary tops and bottoms in the gold market, plus additional cycles for
smaller time frames.

For a limited time, which is soon to end, those that purchase my book will also receive, without
additional charge, an important supplement which is still being developed, that illustrates a
number of shorter term cycles that may last between a week or month or more. This supplement
is for shorter term trading or swing trading. Once this deadline is reached, there will be a
significant price increase due to the value of the added content.

If you would like more information and explanation about what the book covers, please see the
following link: http://www.sacredscience.com/Linsky/GOLD-MARKET-SOLVED.htm

WWW.TRADERSWORLD.COM June/July/August 2017 20


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W. D. Gann - Start Here!
I wasnt planning to write another article for a while but when I was asked to do so by Traders
World and learned that it was for issue #66 , well, a fellow like Gordon Roberts almost has to
do an article for an issue with such an interesting number. However, instead of nurturing any
esoteric wonderment about numbers I decided to discuss a common enough question:

If you are going to study W.D. Gann, where should you start?

BY GORDON ROBERTS

I remember asking the question myself many years ago. I asked it more than once. I
eventually got frustrated enough with attempting to study all the Gann Materials that I quit
studying and trading. I was at least a temporarily defeated loser. I eventually started back up
too because Im stubborn and I didnt want to just go away beaten. So I asked the question
again. Over the course of time, it is safe to say that the Gann question has been asked many
times by many people.

Lets briefly discuss Gann Materials. Over a couple of decades, Ive been a member of many
Internet groups that discussed trading and related analysis. More specifically, the groups that I
enjoyed the most, often studied W. D. Gann and his wealth of work. Given all that Ive seen, I
know that Mr. Gann left large quantities of charts, courses, student letters, and books behind in
the wake of his success. Many of the items you can acquire today probably were never meant to
be seen by you and me. So we are fortunate to have so much material that we can review. It is
also detrimental in ways that there is so much material that we can review.

WWW.TRADERSWORLD.COM June/July/August 2017 23


I eventually realized that there is no right answer to the question. For one reason, we all
bring different experiences and knowledge to the trading party. For example, maybe your
mind is open to esoteric thought and maybe it isnt. Maybe you are just getting started with
markets and are somewhat undercapitalized. Maybe you already have decades of experience
and are independently wealthy. There are several factors like those that can impact the answer.
Recognizing that there is probably no perfect answer for any one of us, I thought Id try to boil it
down to more of a generic answer for the masses.

First and foremost, Id recommend that you read Mr. Ganns own books! I think Mr. Gann
knew that most people wouldnt have been able to afford his courses and that many people
would have little access to them. Accordingly, he wrote books that were more accessible to
the common man (thats me!). You can readily find a list of his publications on the web. How
better to study Mr. Gann than with his own published words? Those are the words he most
assuredly wanted everyone to see, right?

Ive read all of his books and hope to read them all again and again. Mr. Gann basically
instructed me to do that. That said, if I were to pick my own starting point after having read
them all, Id start with, How to Make Profits in Commodities. In my opinion it gives you most
of Mr. Ganns basic teachings and readies you for additional studies. Actually, multiple of his
books and courses tend to reiterate some of the same principles like risk management and other
required market knowledge.

How to Make Profits in Commodities has ample examples and many concepts you can ponder.
You can literally spend years studying this one book. Ill also note that Mr. Gann was updating
the book in the years just before his death so it wasnt something that he wrote and put on a
shelf. Heres an article about the book and its various editions http://blog.wdgann.com/2012/08/
which-edition-of-how-to-make-profits-in-commodities-do-you-have/

For another of my unsolicited opinions, you should not expect How to Make Profits in
Commodities to keep you on the edge of your seat as a suspense thriller. I love Mr. Ganns work
but still have to almost force myself to read it with the appropriate attention level. Historical
market examples arent necessarily the most entertaining reading! Thats the price you pay for
wanting to study Mr. Ganns many works.

Still, most of what you need is surely there or he wouldnt have given the book the name he
gave it. J For what its worth, I consider books like The Tunnel Thru the Air and The Magic Word
to be graduate-level course work and probably should be initially avoided by the beginning
student. Theyll mostly waste your time on a first pass, in all likelihood.

Given my recommendation, Ill substantiate my opinion with a few examples of techniques from
How to Make Profits in Commodities. These are the kinds of things most everyone knows.
The trick is that everyone doesnt use these things to their advantage.

WWW.TRADERSWORLD.COM June/July/August 2017 24


At the time I am writing this article (mid-April) Im wondering about things like political unrest,
terrorism, and even war. Im more amateur historian than conspiracy theorist, and Aprils are
littered with historical events. Those thoughts were tempering my market thoughts but the
market isnt important for the purpose of the examples. Ill focus on the concepts and not the
market.

What Ill show is a chart with a few simple Gann signals. These are monthly bars and Ive added
red dashed lines to show where we had approximate double tops and double bottoms occurring
months apart in time. I marked the second instance in each pair with yellow boxes.

Those were pretty easy Gann signals for a patient person. I should also note that one of these
provided another Gann signal whereby a past high (early 2008) became a future low (late 2015).
Thats seven or eight decent signals for juicy trades in this one market. Past that, youd certainly
need risk management strategies and trading skills. Mr. Gann also addresses those topics in
his books. Hed make wise commandments like Learn Before You Lose! You should try that. It
beats losing before you learn.

For another pretty simple example of things Mr. Gann tells us to try, he says that we should
always use the percentages of major highs and lows. If I reword that, hed be watching 100%,
150%, 200%, 250%, 300%, 350%, etc. Those arent all of Mr. Ganns percentages by a long
shot, but thats good for this example and will keep the chart from getting too cluttered.
Believe it or not, you can usually always find multiple relationships between different prices and
times on most any given chart using various multiples or divisions of past highs and lows. Just
because I dont see it doesnt mean it isnt there once you look harder and perhaps get out a
calculator. Im told that a past Gann student and author of Gann-related courses named Jerry
Baumring would have called this kind of chart activity of multiplying various points to discover
other mathematically related points, prestidigitation.

WWW.TRADERSWORLD.COM June/July/August 2017 25


For my example on the next chart, I marked four different tops with colored upward arrows. The
associated percentages which are multiples of those points are shown in that same color on the
lines higher up on the chart. You can clearly see how one point is related to another and how
there is no point that is not a clean multiple of some historic point in the past.

The highs that I used were most of the significant highs that occurred as the market made lower
and lower highs over a period of 16+ years. Notice that the percentages are combining with
the previous signals to start building into clusters of signals that Ive marked with green boxes.
If that kind of clear information doesnt seem useful, then you probably arent a trader.

With just two of Mr. Ganns simplest studies, weve targeted a good-sized portion of the historical
market highs and lows on that chart. I propose that Mr. Gann wasnt just a master of marketing
books and courses. These are examples of his techniques working almost 30 years after he died.
You cant deny that kind of thing. Either the math is there or it is not.

People sometimes argue that those charts are after-the-fact. Yes. However, Ive proven to myself
that I can do it in advance on many occasions, so the argument is both true and inherently
ignoring the real truth.

Of course, Mr. Gann did several other pretty simple things to target important price levels but
well leave that topic for another day. He also targeted timing as a trading signal. In fact, he said
Time was more important than Price. Im running out of my allotted space with this article so I
wont tease you too much with Time studies. However, there are many possibilities. Ill just show
one or two quick examples for that same market and chart.

WWW.TRADERSWORLD.COM June/July/August 2017 26


This next chart shows an example in red where it was basically 12 years or 144 months from
a major bear market low to the all-time-high. The 144 bar count approximately bookended
an historic bull market. I also put a blue count of 432 on the chart. That is a percentage or
multiple of 144 bars. The endpoints for that count also approximated MAJOR market timing
points.

These are things that Mr. Gann tells us to do. Further, students of Mr. Ganns work should
probably be watching for timing cycles like these. As you progress in your studies, you might
find these numbers in Mr. Ganns master charts and overlays as well as other studies too.
Earlier, I stated that the market wasnt important for my previous charts. That was true for the
examples sakes, but it actually is an important market. Those were commodity charts for Gold.
Id assume several of you are interested in such a market. Ive begun to show you that Mr.
Ganns teachings can indeed help you target large trades in markets like metals. I use similar
strategies for equities and ETFs despite Mr. Ganns focus on the commodities in the book Ive
recommended. He studies equities in great depth in his other books.

While I recommend that you can start with Mr. Ganns books to find a wealth of interesting
techniques for analyzing markets, I have a marketing purpose here that I shamelessly will
promote. if youd like to have a head start with studying Mr. Ganns work, Ive condensed some
of that into my own summary of How to Make Profits in Commodities. My book is entitled,
Market Vibrations - W.D. Ganns How to Make Profits in Modern Markets.

There I provide many such similar examples of Mr. Ganns teachings working in modern
markets. You certainly dont need my book, but it will get you well down the path to studying
Gann if youd like such a short-cut. And summarizing Ganns techniques is not the only element
discussed, there, for I have also presented a trading strategy that I surmise is something like
what Mr. Gann must have used to produce those huge returns that he was so famous for doing.
There are tricks to turning this wisdom into profits that go beyond just the analysis, and I try to

WWW.TRADERSWORLD.COM June/July/August 2017 27


share some of the best that I have learned over a couple decades.

I wrote the book in part for my son so hed have a multi-year head start on studying such things
one day when it becomes of interest to him. The goal is to make you see some of the things
Mr. Gann tried to make you see, and then explain how you might use that information with the
strategy I present, that can be called leveraged position trading.

Now you know that my opinion of where to start with Gann wasnt a just a casual statement. I
actually have such a strong opinion that I wrote a 500-page book about it. That doesnt make
me an expert, but it does make me a serious researcher into the matter. My book is arguably
expensive but I think it compares favorably to the expense of figuring its teachings out for
yourself. If I didnt wish I had it myself 20 years back, it would not be available to you now.
Ill give you a good hint of the contents. I do the things Mr. Gann tells me to do. Its a novel
concept that you should try too. I also try to keep things pretty simple because theres only so
much time in a week and I have local breweries that I need to support. A good citizen/trader
supports local businesses!

On a side note, if you are a person that is interested in targeted research on timing for the
Gold market, I know a gentleman named L. David Linsky who has just published a new book
dedicated to that topic. Its title is The Key to Speculation in the Gold Market, and I have watched
its development through a few progressive stages over the past couple years, and I think it
presents an insight into gold that quite interesting and certainly worth considering. I dont recall
it specifically attributing its work to W.D. Gann, but having studied and researched Mr. Ganns
work, Id think that Mr. Linskys gold book explores some of the kinds of graduate-level things
Mr. Gann also contemplated. Thats my educated opinion.

For the books Ive mentioned in this article and a variety of other books that can expand your
understanding of W.D. Gann and markets, Sacred Science Institute is a resource that has an
impressive collection of materail. You can get started with the markets or you can dive into
deeper water with advanced mathematics, geometry and even much more esoteric studies.
You can even get copies of all of Mr. Ganns own books or nothing at all. You have no pressure
but to drive your own destiny as you wish. You can contact Sacred Science Institute at institute@
sacredscience.com. And if youd like to learn more about my book, there is a good amount of
information that you will find at the following link:

http://www.sacredscience.com/Roberts/Market_Vibrations.htm

Thank you for your time reading this and HAPPY TRADING TO YOU!

WWW.TRADERSWORLD.COM June/July/August 2017 28


THE TEXTBOOK OF GANN ANALYSIS...
The Path of Least Resistance
THE UNDERLYING WISDOM & PHILOSOPHY OF W. D.
GANN ELEGANTLY ENCODED IN THE MASTER CHARTS
BY DANIEL T. FERRERA
MOST DETAILED COURSE ON GANNS MATHEMATICAL & GEOMETRICAL TOOLS!
We use the square of odd and even numbers to Intent of This Gann Course
get not only the proof of market movements,
but the cause." - - - W.D. Gann The intent of Ferreras new course is to provide the
most comprehensive elaboration of W.D. Gann's most
How to square the natural whole numbers (odd and powerful technical trading tools. It presents all of Ganns
even), along with their midpoints. foundational mathematical and geometrical techniques
How to define prices scales by "The Basis of Money expressed in his master calculators, angles, trend channels,
How to set the proper scale, and use the 1x1 angle to squaring processes, pattern formations, spiral charts and much
square or balance price with time. more, leading to the clear identification of profitable Trade
Setups, important trend indications, and critical price/time
How the natural squares (even & odd) sub-cycle
culminations.
would not be possible without understanding the
The material further elaborates a number of Ganns
Spiral chart (Square of 9).... expressing the square
most advanced geometrical tools and applications, such as the
root as an "inner square" time period. natural squares (even & odd) sub-cycle and the square root as
How to assimilate all of these elements together as a an "inner square" time period, . It provides both practical and
sequential methodology once the "basis of Gann's actionable trading signals and a valuable structural perspective
forecasting method" has been worked out. to any market on any time frame.
How Ganns price squaring techniques and master With 300 pages of detailed text, over 150 charts and
charts are NOT completely separate and independent diagrams, and 190 pages of the rarest Ganns supplementary
methods, but are tied together thru geometric angles. material, we consider this 500 page treatise to be THE
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FERRERAS NEW COURSETHE ART OF THE TRADE


W. D. GANNS SYSTEM OF CHART READING & PATTERN TRADING
Dan Ferreras new trading course, The Art of the Trade, provides thorough instruction in W.D. Ganns key
trading methodology, Pattern Trading. It teaches Chart Reading the way Gann himself did it, demonstrating how
to trade the fundamental market patterns identified by Gann. This strategic approach to trading provides advantages
that allow the trader to react to the markets in real-time, without indicator lag. Pattern Trading eliminates lagging
mechanical indicators, which are always based on what the market did in the past and not the present. This style of
Form-Reading, as Gann called it, allows one to make decisions in real time, as the opportunities develop on the chart.
The course provides a clear set of rules for reading these market patterns to determine entry, exit, risk
management, and trade management as determined by the recognition of a set of fundamental market patterns identified
by Gann. This approach differs from Ganns mechanical swing indicators and from his long-pull position trading,
providing a different perspective and alternative trading style, that most often used by Gann himself. The technique is
equally effective on any time frame, so is as valuable for day-traders as it is for daily traders. It also generates a larger
number of trades than his other trading methods.

FOR A DETAILED WRITEUP ON THIS COURSE INCLUDING FULL CONTENTS, AND SAMPLE SECTIONS SEE:
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WWW.TRADERSWORLD.COM June/July/August 2017 29


W.D. Ganns Pattern Trading Method

By Daniel T. Ferrara

Over his 50-year trading and advising career, W.D. Gann developed approximately 40 different
trading tools, calculators and/or mechanical methods to trade the stock and commodities
markets. Gann was a prolific writer and published six market related books beginning in 1923
with The Truth of the Stock Tape, 1927s The Tunnel Thru The Air, 1930 Wall Street Stock
Selector, 1936 New Stock Trend Detector, 1937 How to Make Profits Trading in Puts and Calls,
1941 How To Make Profits Trading in Commodities and 1949s 45 Years in Wall Street.
In addition, Gann published and released several very expensive private courses ranging from
$1500 to $5000 that sold from the early 1920s to 1950. For example, Gann taught advanced
courses of instruction entitled Master Forecasting Method, at a cost of $2,500, and the New
Mechanical Method and Trend Indicator, at a cost of $5,000, to those who want it for their own
use and will not publish, sell, or teach it to others.

He claimed that the trading method is too valuable to be spread broadcasted. The cost of these
courses and personal instruction in todays money would be $25,000 to $50,000, or more. The
guts of his Master Forecasting Method relied on looking 10-year intervals, 10, 20, 60 years back
for equites and 10, 30, 60 years back for commodities, to determine current market action.
Interestingly, Ganns most expensive course was his Mechanical Method and Trend Indicator and
not his Master Forecasting Method. It is known fact that Gann was renowned as a forecaster and
there was a great deal of interest in learning his forecasting and prediction methods, many of
which I have personally used to predict events, such as the 2000 top, the 2002 low, the 2007
top and the 2009 low, to name a few.

An article in The Evening Telegram dated Monday, March 5, 1923, in New York, literally used the
words prophet and mathematical seer to describe Gann. Thus, it is strange that his Master
Forecasting Method sold for half the cost of his $5,000 Mechanical Method and Trend Indicator
courses.

Additionally, Gann produced multiple versions of this specific trading material. For example,
he had one for Soybeans, a version for Cotton, one for Corn and grains another for Stocks,
and so on. Each of them all focus on the same system of pattern trading and essential money
management rules. Recall that Gann claimed that this trading method was too valuable to be
spread or broadcasted and he wanted his course owners to keep this information to themselves.
In any event, these are the only courses that Gann wrote specifically teaching a practical method
of trading the markets. Practicality itself may have been a justification for the high cost of the
course materials. The old saying comes to mind, Give a man a fish and feed him for a day or

WWW.TRADERSWORLD.COM June/July/August 2017 30


teach him how to fish and feed him for life.

Based on the high cost and multiple versions of this pattern trading method, it can be
surmised that Gann wanted his students to develop their pattern trading, recognition and trade
management skills using this specific charting method as the educations base, prior to adding
any of his other trading tools and theories.

In other words, this pattern recognition approach provides a proper trading foundation and
develops the correct management skills as a practical standalone approach from which more
sophisticated layers can be added upon. To a large degree this is the Gann equivalent to what
was known back in the day as the art of Tape Reading. In support of this, Gann wrote entire
course sections on Form Reading for both his Master Course for Stocks and Master Course for
Commodities, which also sold for several thousand dollars each.

As the next three quotes emphasize, it is clear from a historical view that Ganns most expensive
courses provided useful instructions on pattern recognition trading. Just examine what he said:
Eight-five per cent of what any of us learn is from what we see. It has been well said, One
picture is worth a thousand words. That is why FORM READING or the reading of various
formations at different periods of time is so valuable. The future is but a repetition of the past.
The same formation at tops or bottoms or intermediate points at different times indicates the
trend of the market. Therefore, when you see the same picture or formation in the market
the second and third time, you know what it means and can determine the trend. By studying
stock formations of the past you will be able to determine what is going to happen when similar
formations occur in the future, just as you know that there is going to be a rainstorm when you
see a heavy dark cloud form.

Gann also said: The average mans memory is too short. He only remembers what he wants to
remember or what suits his hopes and fears. He depends too much on others and does not think
for himself. Therefore, he should keep a record, graph, or picture of past market movements
to remind him what has happened in the past can, and will, happen in the future. Panics will
come and bull markets will follow just as long as the world stands and they are just as sure as
the ebb and flow of the tides, because it is the nature of man to overdo everything. He goes to
the extreme when he gets hopeful and optimistic. When fear takes hold of him, he goes to the
extreme in the other direction.

Learn to watch and wait. Never guess; follow rules and wait for a definite indication before you
make a trade. If you expect to succeed you must learn to follow rules and after you have proved
to yourself the rules will work, have the nerve to follow them and profits are assured. Obedience
to all these rules will bring success. - W.D. Gann

Todays technical analysis has an overabundance of chart formations and indicators. However, it
isnt necessary to know more than a handful for effective trading. Traders are far better off being

WWW.TRADERSWORLD.COM June/July/August 2017 31


proficient at recognizing a small group of simple chart patterns and implementing strategies that
can expose capital to easily recognizable opportunities with limited risk than they would be in
memorizing the quagmire of patterns that are presently being promulgated by chart technicians.
Ganns form reading approach kept things simple and relied on four main swing patterns created
by his trend indicator that provided both trade setups and stop loss location to minimize risk.
Simplicity is the ultimate sophistication. --- Leonardo da Vinci

The main objective with any trade is to control the level of risk relative to potential reward and
this is another advantage that pattern trading can provide. When properly understood, pattern
trading can also provide clear profit targets and stop loss placement. No trading method is
without flaw, but pattern recognition can provide a trading decision edge in real time without
relying on lagging indicators.

There are a lot of good traders that use automated computer strategies of their own design and
achieve success. That said, some of the best traders both past and present are chart readers.
Being able to interpret a price chart allows them to stay in tune and often ahead of the markets.
Patterns let the market tell its own story. They inform the trader what it is most likely to do,
providing an open invitation to come along for a potentially profitable ride.

Understanding chart formations provides traders with a timing advantage. Price action tells a
chart reader what the market is doing right now vs. the spectrum of lagging technical indicators
that are always calculated from what markets did in the past. Chart readers tend to be more
in sync with the pulse of the market. Becoming proficient at recognizing these simple patterns,
which are conceptually based on pivotal swings, can dramatically improve a traders ability to
read and interpret price action.

Knowing the likely areas of support and resistance along with basic chart patterns can allow the
trader to enter the market in real-time trading, exposing their capital with small risk exposure.
Patterns are either present or not. Some indicate potential tops or bottoms, while some give
indications of trend continuation. The nice thing is that they can be read and ascertained in real
time as they unfold.

To compliment the trading foundation, Gann developed many additional tools and theories that
are powerful additions to a pattern trading foundation. These include: geometric angles, price-
time-balancing, natural squares, natural eighths, seasonal time periods, recurring cycles and
harmonic divisions, decennial patterns, sections of a bull or bear movement, anniversary dates,
support and resistance levels, which all support the primary foundation developed through
pattern recognition.

Many of Ganns more sophisticated trading tools are entirely based on the 1 x 1 or 45-degree
angle, which is an important concept to understand correctly prior to adding these interrelated
techniques to the pattern trading method. The master overlay charts, Square of 90, Square

WWW.TRADERSWORLD.COM June/July/August 2017 32


of 52 and Square of 12 are all based on the
45-degree angle expressed over different TradersWorld Magazine
time periods. The squaring of price by time, Premium Subscription
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However, without the proper trading foundation


and management skills, these additional layers
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making process that was intended to be
straight forward. In my new course, The
Art of the Trade, W.D. Ganns System of
Chart Reading and Pattern Trading, I have
worked to revive this great technique of Ganns
by modernizing it and adding a selection of QUARTERLY MAGAZINE SUBSCRIPTION
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WWW.TRADERSWORLD.COM June/July/August 2017 33


COMPUTERS and ELLIOTT WAVE
By Jacobs Singer

Ralph Elliott, sitting in a rocking chair on his front porch in California, suffering from what we
understand was anaemia, had plenty of time on his hands. To keep his mind active, he started
studying the stock market becoming obsessed with the historical movement of the Dow Jones
Index. His continual obsession led him to develop the Elliott Wave theory, a cyclical repetition
very different to the cycles that were commonly used at that time. He wrote a book entitled
The Wave Principle, about his theory, a theory that was presented to analysts in the book Elliott
Wave Principle by Frost and Prechter in 1978.

The book explained the Elliott Wave theory in detail, and had many followers in the stock market
that used technical analysis to analyze the movement of stocks with remarkable accuracy.

Figure 1. Basic Elliott Wave pattern

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The chart in Figure 1 shows the basic Elliott Wave pattern, and the chart in Figure 2 shows how
the waves can be broken down into waves of a lower degree, which in turn can be broken down
into waves of an even lower degree. The theory also stated that a Wave 5 should be the same
length as a Wave 1, and that Wave 3 should be greater than Wave 1. That the ABC correction
should not fall below the low of Wave 4.

Figure 2. Minor Elliott Waves within the larger wave pattern

There are many variations and failures in the basic pattern, all of which is explained in detail in
the book Elliott Wave Principle by Frost and Prechter. However, one must remember that in 1978
there were no desktop computers that traded the stock market. It was only when computers
started hitting the desk that changes to the Elliott Wave principle started to appear.

The first one I discovered in the 1980s was that if a WAVE 3 is smaller than a WAVE 1 then a
WAVE 5 must be smaller than a WAVE 3. As the years passed, and computers became even
more active in trading the market, more changes to the basic Elliott Wave principle started to
appear, for example a wave 1 developed as an a-b correction half way in the wave. Why the
change in the wave count? I concluded after a great deal of thought that it occurred because

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humans have emotions, whereas computers do not. Humans are influenced emotionally by the
movement of a stock whereas computers make the decision algorithmically. Computers prepared
for a further downside, hence the small correction, then when the market did not correct as
much as anticipated, computers returned to being bullish.

When I started programming my first computer, a Sharp MZ80A in the 1980s, I would download
market data at the end of each day. I purchased a program that would analyze the days
movement of all the shares I was interested in, suggesting with technical analysis, what share I
should look at as a buy when the market started trading the next morning. The program I used
was Technifilter plus, a program I still use today.

Today there are many programs available that can analyze the market either intra-day, if you
can find a data supplier that can give you intraday data, or end of day. Brokerage houses have
computers that are connected to a live data stream that analyze the market immediately, buying
and selling stocks in seconds.

A few years ago, when I analyzed the market at the end of the day, the first change I noticed
was that in a Wave 1 there was often an a-b correction. The second change I found was that
a Wave 5 was often smaller than a Wave 1. I concluded that this was because computers,
anticipating a market top, started selling shares and moving to cash or placing the money in
stocks that it identified as contrarian to the general market.

One has only to look at the floor of New York Stock exchange today as shown on the CNBC TV
program. In the 1980s that floor was packed with traders. Today it often looks empty as more
and more traders are trading from their offices on their computers rather than directly on the
floor.

Figure 3. S&P500 Index and the Kondratiev Wave.


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The chart in Figure 3 is a monthly chart of the S&P500 index. The chart suggests that traders
and computers, anticipating a Hillary Clinton Presidential win, expected a market correction in a
WAVE V top on August 2016. This would have tied in with the Kondratiev Wave 2016 correction
as shown on the chart. However, with an unexpected Donald Trump win, the Index rose strongly.
Computers were probably reprogrammed to account for a President that is a businessman, and
not a politician. As a businessman, President Trump has policies that are contrary to previous
expectations. He has also shown that, as a businessman, he can change and will change his
policy at a moments notice as he realizes and accepts a win-win situation. Where a politician
is fixated in slow moving and debatable political policies, a businessman is not, often making a
decision on gut feel only.

The chart with the S&P Index on a Kondratiev wave suggests that the WAVE IV correction is not
the 2016 correction ending in 2023 as shown on the chart where the Index continued to rise in
a WAVE V. The Elliott Wave suggests that the index could continue to rise till the year 2019 give
or take a year, before correcting in a major market collapse into 2023, once again give or take a
year. However, I am inclined to believe that the Index could fall in a WAVE A, then rise strongly
in a WAVE B before collapsing in a WAVE C in 2019 once again, give or take a year.

Yes, the Elliott Wave principal as analyzed in the Frost and Prechter book, still applies. The
Fibonacci counts suggested in the book and the various changes that could occur in the waves,
are something everyone should be aware of. However, with non-emotional computers becoming
more and more sophisticated in analyzing the stock market, one should always be mindful of the
fact that a change can occur at the drop of a hat, especially now that America has a President
who has shown the world recently that his principles do change at the drop of a hat, something
the Elliott Wave Principle cannot predict, but computers, which analyze every trade made in
seconds, can.

Computers do not sleep. They stay awake 24 hours a day and if programmed well, analyze world
markets and events making their decisions based on the sophistication of the program they
are running. As they are becoming more and more knowledgeable, computers are trading the
stock market on their own, without human interference, except to update the program as better
algorithms are written. Human day traders on the other hand, trade for a limited time only on
the market, using intraday programs that supply intraday data with, in many instances, an Elliott
Wave pattern and Fibonacci count as shown in Figure 4.

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Figure 4. A 5 minute chart of the Dow Jones with an Elliott Wave count.

The chart in Figure 4 is a 5 minute Tradingview chart of the Dow Jones on Wednesday April 12th
and Thursday April 13th. The Elliott Wave count shown on the chart suggests that a Minor WAVE
C has been completed and that the Dow should now start rising in a new Wave 1. Computers
would now be recommending a BUY on shares analyzed with an Elliott Wave count on Monday
17th should a share price, whether analyzed 1 minute, or on price ticks, have a pattern that
meets the Wave program standards.

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Figure 5. Alignment of the planets to the earth on February, 2020.

The chart in Figure 5 is a chart of the planets circling the earth. The sun, on July 3rd 2020, is on
the same side of the earth as the planets and the moon.

In my previous article in TRADERSWORLD, March/April /May 2017, I showed that when the
market crashed in 2000, all the planets were aligned on the same side of the earth. I also wrote
that the combined gravity of the planets affects human emotions. To confirm this one has simply
to stand on a beach and watch the waves, created by the gravity of the moon, splash at ones
feet. When you realize that 80% plus of the human body is water, then that gravity must affect
the human body as well and thus affect human emotion.

The Kondratiev Wave is calling for the correction in 2019, give or take a year. Allowing a 1 year
error correction brings it to 2020. President Donald Trump is in office for 4 years. The next
United States presidential election is scheduled for November 3rd 2020, with the winner taking
office in 2021. Should President Trump lose that election, a businessman will no longer be
President of the USA. With a politician taking over the Presidency, uncertainty caused by the
way President Trump often changes his policies at a moments notice, will no longer happen.
Elliott Wave suggests that the market is presently completing a WAVE V, and should now start
correcting in a WAVE A. Wave B is the correction moving up, and WAVE C is the main market
collapse. WAVE C is the wave that could probably occur in 2019-2020.

Is the world presently in a WWIII? One should never forget that WWII was very different to
WWI. Where WWI was trench warfare, after the war, France built the Maginot Line, a line of
concrete fortifications that spread along the French/German border to protect France should a
second war occur. The line failed miserably because of the blitzkrieg that Hitler brought to WWII.
With terrorism on the increase today as Islamic radicals are suicide bombing people throughout
the world, the world could already be in a WWIII, a war that is as different to WWII as WWII
was to WWI.

As a businessman, President Trump has shown the world that he can and will change his policy
at a moments notice. In his pre-election campaign, he stated that America should not be the
policeman of the world, and yet his recent bombing in Syria and Afghanistan shows that America
is once again the policeman of the world.

Go for it programmers. Include the algorithm of a businessman in your computer program. Learn
how to predict the policies that businessmen will follow at a moments notice.

Jacob Singer.
Aka. Koos van der Merwe

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Quick Profits with Andrews Geometry
By Ron Jaenisch

My friend Professor Alan Andrews is best known for what traders refer to as the Andrews
Pitchfork.

It is simply three lines that are parallel, with the outer two lines being equidistant to the Median
line in the center. Each of the three lines start at pivot points, as is seen in the above silver chart
(chart #1).

Dr. Andrews who made his first million after graduating from MIT, often spoke of investing very
profitably being a duty to the wishes of the Lord. He would cite a story in Luke 19 and Mathew
25, to make his point. In the story the servants who multiplied the assets were favored by the
Lord.

Professor Andrews, who taught engineering at the University of Miami, contended that price will
make it to the median line 80% of the time. If price does not make it to the Median line, then it
will make up for it when it reverses and goes in the opposite direction. Computer studies show
that his concept can be used to build systems that are worth trading.

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This brings up the question.Is there a way to predict when price will not make it to the
Median Line and quickly go in the opposite direction, to profit from that? Markets tend to go in
a sideways pattern prior to a decisive move that is quick and strong. What does a trader usually
see occurring prior to a decisive strong move, that brings home the bacon? If there is such a
pattern, how can it be described so that a trader can quickly understand it?

As I think back, there were concepts that he taught in his 60 page manual for the public
and many other concepts he taught privately at the kitchen table. A concept that was worth
remembering is how to know when prices are likely to make it past the median line and then
strongly past the far parallel.

An example is his sliding parallel concept. In some cases, after drawing the pitchfork, price will
go outside of the pitchfork. As long as it does not go past the pivot point where the pitchfork
was drawn from, a sliding parallel line (SH Line) is drawn from the extreme of that small move.

The NY Harbor heating Oil (chart #2), has two examples. One is upsloping and one is down
sloping. Note that in each case price stayed within the SH line on a closing basis for a
considerable length of time. In each case the trader had the opportunity to generate handsome
profits from the move.

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Chart #2 is the same as Chart #3, with a few minor exceptions. The first pitchforks were
removed and the next pitchfork in each case was added. This helps the trader to know how far
the move might go prior to making a reversal from which the SH line will be drawn. Note that in
each case price did not make it to the red Median Line. This is the concept he taught privately.
What this means is, if the trader places a trade near where the point where he thinks he will
draw a future SH Line, he can place a stop past the appropriate Median Lineand later past the
SH line. Since the markets are fractal in nature, Andrews concepts are then used on a smaller
time frame to determine the most likely point where price will reverse, which would be before
the Median Line.

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For traders that use hourly charts, an example is Chart #4 and Chart #5, the profits are fast
and furious and the risk is manageable. To see the actual real profits chart that was used. See
Chart #1. After some thought, these insights will bring the trader to other questions: what
patterns occur prior to this type of trade?, what is the target for the trade?, what are the results
of computer studies that have been done on this strategy? what markets does it work best
in? ..and of course what is the best way to implement this strategy? together all good
questions for a webinar.

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This month new advanced andrewscourse.com course members will see the in depth video that
covers the technique and answers many questions.

Above is a snapshot of an actual account. It shows that the Soymeal short trade was taken near
the SH point. Can Advanced Andrews techniques help your trading?

Ron Jaenisch spent time at the kitchen table with Professor Andrews. He teaches for
Andrewscourse.com, manages his family office accounts and designs Andrews technique
software.

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High Probability Trade Setups

Stocks, Options, Tr a d i n g M e t h o d s a n d C o n c e p t s ;
Futures, FOREX traditionally reserved for big
SOFTWARE banks and hedge funds, now
Algorithms and Vector Graphics
Display Opportunities: Filtering
available for you:
Signal from Noise. ` Spot and follow institutional money moves.

EDUCATION Let the chart tell, when to buy or sell.


One-on-one Training/Coaching Works for all asset classes and time frames:
at Your Best Available Times.
Day Trading
TRADE ALERTS
Find Assets Ready for a Price Swing Trading
Move, through Own Scanners Long-Term Investing
and by the NLT Alerts.
Free Consulting Hour: Experience how NeverLossTrading
DOCUMENTATION systems work in real time and which concept suites you best.
Tutorials, Business Plan.

contact@NeverLossTrading.com Call: +1 866 455 4520

WWW.TRADERSWORLD.COM June/July/August 2017 46


Systematic Trading and Gambling
By Thomas Barmann of
NeverLossTrading

Trading the financial markets: stocks, options, futures, and FOREX gives great entertainment;
however, if you are seeking trading success, you should pay close attention to what is shared
in this publication, it shall provide you with an overview of the necessary knowledge and skills
needed to transform yourself into the trader or investor, you want to be!
First and foremost, you need a trading system, with a positive expectation > 65% to predict the
future price move of an asset. However, will that be enough to succeed?

Graphic-1: The Trading Game (Bag of Marbles)

We at times play a game, where we put 20 marbles in a bag: 13 green ones and seven red
ones. You assume a $100,000 trading account and we let you bet on the outcome of a drawing
and strike a balance after 10 and 20 rounds in the game. In the setup of the game, we replicate
a 65% probability of winning; however, at or before10 games about 30% of the participants go
bankrupt (blow their account); after 20 games even about 40% of the participants are broke.
Additionally, another 20% - 30% of the participant show a significantly lower account balance
than they started out with; even so they operated under favorable trading conditions.

There is a small group of people: 10% - 20%, who produce outstanding trading results.

What did they do differently from those who suffered significant losses?
An easy answer: Nothing, they were lucky, the others were not!

The behavior of the group of people who got lucky and those who showed significant losses is
basically the same: A gambling behavior: taking excessive risk, aiming for excessive rewards.
The key to produce income from trading long-term is not only to make money, it is also: keeping
it. With a gambling behavior; long-term, no trader is able to produce the desired income from

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trading or investing.

Unfortunately, most retail traders are operating with systems at or below a 55% probability
to predict the future outcome of a trade situation. Then the results are even more drastically
negative after 10 and 20 games:

Graphic-2: Bag of Marbles Game Results

In summary: behavior wise, we neither want to be on the left nor on the right side of the graph.
On Graphic-2, we framed the behavior of people who produced a systematic success and want to
share what they did differently and how you can learn from them to better your trading:

The blue framed reference group used a systematic approach and invested either a constant
amount of money per drawing or a constant percentage, focused on staying for at least for 20
drawings in the game; still, they had no guarantee for a positive outcome, but with the odds in
their favor, they focused to be in the game long-term and are able to produce repetitive income
from trading.

The amount of people who produced positive results by operating with a systematic approach
and a 65% probability of winning was by far higher than number of systematic gainers with a
55% system; highlighting the importance to operate with a high probability system.

If you are ready for making a change and you want to see how such systems work:

Call +1 866 455 4520 or contact@NeverLossTrading.com

Is there a golden rule for a trader on what you shall risk?

We encourage people to not risk more than 5% of their account in a single trade and help with

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systems to adjust the risk or position size based of the odds of a trade setup.

The most you control in trading is the risk you accept per trade. If you want to be a good risk
manager, it is important to consider news events like:

- Corporate earnings or dividends.


- Approvals and launches.
- Economic news.

On such events, you can have excessive price gaps and as said, this is good for a gambling
mentality, but not for a systematic trader.

We help you to find those economic news day-by-day: check our websiteclick.

When you follow systematic trading, you do not need to gamble on such events, we rather
encourage you for staying out of an asset two days prior and after an event.

Those with a gambling mindset bet on such events, preferably with options and often do not
consider that there is no free money in trading. The market makers in front of an event have the
ability to adjust option prices with Vega (implied volatility of a stock). As a consequence, what
some trading-gamblers consider a safe bet: holding a straddle or strangle over a news event only
works when the underlying asset shows a price move of more than 10% of the asset value.

In the event that such a significant price move does not happen; the trading-gambler loses
significantly on the investment made.

If you operate with a high probability trading system, you do not need to gamble, you know day-
by-day, hour-by-hour what you do and if you trade or stay out of the market.

For helping you to determine potential investment amounts, we also help with systematic
approaches to allocate your investment based on the assessed risk.

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Graphic-3: Odds Based Position Sizing Model

In the FOREX example of Graphic-3, you were expected for the following input: Your entry, the
expected price move to target, and the stop. The system then gave you a feedback, allocating a
0.9-lot to this trade, within staying in the pre-formulated risk principles. In case, you are not yet
operating with such models, then this article might help you to build everything up on your own
or you rely on a system ready for you to use.

If you are not yet signed up to our FREE Trading Tips, Webinars, Reportssign up here.

Another important dimension to consider in your trading:

Directional price moves do not last forever!

Traders, who operate with a system that approximates how far a price move might reach from
entry until it will face haltering, retracement or reversal, have a much higher likelihood for

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producing the desired results than those who always bet on the exceptional result.
If a price move continues its direction, you rather trade multiple times in the price continuation
pattern; always considering your risk guidelines.

Again, a simple systematic to follow for producing long-term trading success. In an experiment,
where we had traders who aimed for strong directional price moves compared to those, who
focused on multiple trades along the strong price move, the results showed:

The repetitive re-investor produced higher trading results!

Let us give you some examples, how a system that lets you constantly participate in price moves
of various assets: Stocks, options, futures, and FOREX; allowing you to constantly trade at high
probability setups, following the systematic of risk-based adjusted trades with clearly defined
Entries, Exits, and Stop- or Trade Adjustment levels.

Let us pick an example for the E-Mini S&P 500 and afterwards for EUR/USD acting as follows:

- Stop levels are indicated by a red horizontal line.

- The price has to tick out the formulated price threshold by 1-tick: Buy> $2,335.50. You set
a buy-stop order at 2,335.75 to go long or sell stop order to go short.

- The price target for a trade is put on the chart by a gray dot: system defined. When the
price reaches the gray dot, you exit the order: see all three trade examples.

- You use a bracket order (OCO) and let the computer do the work for you.

- At each trade, the reward/risk of a trade setup is evaluated and displayed. You only accept
a trade when it is within specification: dashboard on top of the screen.

- There is a time-based target. When the trade did not reach its target after three bars, you
check if there is an additional directional price confirming signal: If yes, you stay in the trade for
another bar to either exit at target or at bar #4 closing, else you exit your trade at the closing of
bar #3. Trade-3 will give you such an example.

- You do not enter trades where you see the #5 sign on the chart.

Those are easy and pre-formulated rules to enter and exit a trade that you can spot and follow
right from your chart: Trade what you see! Let the chart tell, when to buy or sell!

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Graphic-4: E-Mini S&P 500 Futures on a 4-Hour Chart, April 12 19, 2017

Graphic-5: E-Mini S&P 500 Futures on a Daily Chart, April 12 19, 2017

Applying the same rules, the first two trades reached their target, while trade-3 exited at bar-3.

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What is different when comparing NLT Trend Catching to other systems?
The happening of the financial markets is infinitely complex, but based on simple principles:
A price change is the result, not a variable; hence there is an underlying momentum and pre-
stages, and continuation stages of a potential price change can be measured and made visible.
By our studies, commonly available indicators show a slightly positive expectancy for predicting
the future price direction; however, not with a high predictability: We graphed predictabilities
around 53-55% for indicators like: Moving Average Crossing, Bollinger Bands, DMI, ADX, RSI,
Stochastics, MACD, CCI

By our definition, high probability trading starts with a predictability >65% to determine the
future price development of an asset.

When common models do not achieve the desired result, what needs to be done to reach high
predictability?

To answer this question, let us lay out the landscape of what we worked on for more than
10,000 hours and you then have the chance to either replicate what we did on your own or you
come on board with a system that has helped many traders since 2008:

Systematics of High Probability Trading

1. You trade what you see: we display specific action points on the chart for you to act on,
operating with clear cut entries, exits, and stop or adjustment levels.

2. In addition, you follow repetitive price patterns, applicable for all time bases, tick frames, or
ranges.

3. Specify price thresholds to be met to accept a trade; thus you can operate with buy-stop- or
sell-stop orders or conditions, so you can send trades to the exchanges without the need for you
to be in front of your computer.

4. At trade entry, formulate a positive exit, where to assume a 65% (1-SPU) and 85% (2-SPU)
likelihood that prices, halter, slightly retrace or potentially revert. We also have an alert service
in place that indicates, which of the setups found have a higher probability to get to a further
out price point (2-SPU Price move) in a set period of time.

5. Formulate a time-based target, where you see a need to decide for exiting the trade, when
the expected price pressure did not lead to the expected price move. Depending on our system,
we set the time target between three and ten bars for an exit, revision or trade adjustment.

6. Separate signals from noise and thus, separate price action in the natural price development
of an asset from a pre-stage or continuation stage of a potential directional price move.

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7. Do NOT operate with a fixed mathematical relation: Only consider the price action of now and
only under specifically met conditions, let your system indicate and extrapolate the future price
action from specific chart setups.

Use models that work on all time frames and all asset classes by following the underlying
structure of the market; however, you have to consider that some time-frames are not
meaningful to operate at as a retail trader, considering: slippage trading costs and the relation of
reward to risk.

9. Formulate conditional orders and only when other market participants accept the newly found
price direction, then you enter into a trade.

10. Operate with multiple trading strategies, so you can act at directional price moves to the up-
and downside, while you are always staying in tune with a maximum risk agreement.

11. Follow a business plan for your trading success, which shall include:

A Financial Plan

- Assets and time frames to trade


- Amount of trades per time period
- Position sizing, using our models
- Trading strategies to apply: stocks, stocks with options, options, futures, FOREX

An Action Plan

- Trade Alerts: Symbols with the desired setup by the NLT Alerts or own scans and watch
lists.
- Trade preparation: which assets and time frames to choose
- Order preparation and pre-programming
- Trade adjustments or account hedging: turning potential losers into winners or limiting
losses to a minimum
- Operate with multi-screen setups, even on one monitor: laptop freedom.

Now to the mathematical background:


The basis for describing and coping with high probability trade setups comes from what is called
a fractal-based math, invented by Benoit Mandelbrot. Early in his years with IBM, he was focused
on a project where they faced a reoccurring problem in wire-based data transmission: At times,
the data transmission was not going through due to interference. When looking at the problem
in its details, it showed that the issue occurred in a repetitive pattern regardless of the time base
applied, showing the same phenomena on a minute view, an hourly view or a daily view.

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Does that sound familiar for you as a trader?
Knowing the above and with a master in signal transmission, we paired this knowledge and built
trading systems, which consider repetitive patterns based on the underlying structure of the
markets where the price action of now builds the base for entering and exiting a trade. As shown
on the charts, for every potential price move, we define an exit and by relating reward to, we
are giving you the basis for meaningful long-term trading decisions.

In some publications, a specific price pattern is highlighted as a fractal; however, this does not
build the basis of the NLT Trend Catching System, where we focus on two events:

- A price initiation move.

- A price continuation move (highlighted by a Buy-C or Sell-C sign).

When you want to be a constant trader or investor in the financial markets, it is essential to
have a solid trade finder, providing you with assets on a brink of a price move according to the
trade setups you are looking for. We do such through the NLT Alerts: When you sign up for a
mentorship, you receive the alerts for free, and later, you can receive them on daily level as a
subscription service. This way, you are effortlessly informed where prices move and where to
find favorable trade setups with specified entries, exits, and stops.

Another dimension for trading success is to participate in the market with multiple strategies.
Why would you tie up your capital long-term when you are able to participate in long-term
trades with a fraction of the investment by operating with options for example?
Option trading requires a multitude of different knowledge bits, which we all teach
one-on-one in our mentorships; how else do you decide:

- For the strike price to choose?


- The time to expiration according to your trade setup?
- The maximum price you want to pay for the option?
- How to repair a trade if it goes against you?

We encourage you to tie all that was shared here together in a business plan for trading success:
- Financial Plan: Expectation per trade, week, month.
- Action Plan: Assets to trade, trade repair, trade preparation.
To demonstrate the multi-dimensional requirements of successful trading, we put together a
graphic, which shows what you shall either build on your own or find in our offering:

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Grapic-6: Elements of Systematic High Probability Trading

After all those details shared, you have the chance to implement every step of the way on your
own or you get help for implementing all of this into your trading routine:
Mention: Traders World Issue #66 NLT and we provide you with a special offer if you decide for
NLT Trend Catching or any other NeverLossTrading System. This offer is only valid for the month
of June 2017.

Call +1 866 455 4520 or contact@NeverLossTrading.com

By teaching one-on-one, spots are limited, so do not miss out!

Please subscribe to our FREE trading tips, webinars, and reportsclick.


We are looking forward to hearing back from you,

Thomas

www.NeverLossTrading.com
Disclaimer, Terms and Conditions, Privacy | Customer Support

WWW.TRADERSWORLD.COM June/July/August 2017 56


Divergence Analysis and DVAN SMART
LINE INDICATORS
By Dyer Kennedy

Since 1989, Divergence Analysis Inc (DVAN) has advised private and institutional clients
using its proprietary moneyflow methodology to interpret markets. Jim Kennedy, founder
and CEO, developed the methodology after 10+ years studying technical analysis and an
early career in the brokerage and wealth management industry. Here is Jims account of the
development of the DVAN methodology.
I continued to see the lag effect from technical analysis techniques, and wanted something
better I wanted to develop a systematic approach to market entries/exits. But these had
to be leading indicators, as opposed to the 99% of technical indicators of the day that all
lagged. They lagged because the inputs were pricessomething had to occur by price and it
would show up in the indicator afterwards.
This led Jim to explore using volume data in his analysis rather than price data. He had
worked at using raw volume data on two previous occasions, but it was just too volatile to
use. To calm this data, Jim developed an algorithmic process that DVAN now refers to as
moneyflow. Moneyflow is a proprietary measure of volume and velocity in a security or market
and is intended to eliminate noise and identify the true force and potential market movement
in place.
The moneyflow algorithms derive a securitys force from mass and acceleration inputs
(Force=Mass x Acceleration.) DVANs process calculates mass with underlying volume and
acceleration with velocity.
To expand his analysis into all asset classes, Jim developed a synthetic volume input as
well, so now his clients could use the DVAN Moneyflow methodology on all liquid, tradeable
securities.
Below is an example of the raw volume and synthetic volume input and their leading
characteristics.

WWW.TRADERSWORLD.COM June/July/August 2017 57


From 1989-2012, DVANs clients were a handful of hedge funds, mutual funds, and other
institutional clients. With the advent of trading platforms establishing app and indicator
marketplaces in the 2010s, DVAN was able to expand its clientele to individual traders as well.
DVAN has partnered with Bloomberg, TradeStation, Optuma, NinjaTrader, and MultiCharts
to offer its DVAN SmartLines moneyflow indicators to individuals and professionals alike for
active trading, analysis, and risk management.
The original algorithms have remained unchanged since 1989 and DVAN has focused on
creating a clear framework in its indicators, models, and packages for active market participants
to make more informed and efficient trading decisions.
Depending on the platform, DVANs offerings vary slightly. The core DVAN SmartLines
Cycles indicator is shown below on TradeStation and Optuma charts.

The DVAN SmartLines Cycles indicator shows color-shaded buy and sell cycles that overlay
prices on the chartequipping the user with a roadmap for direction and force. The changes
between buyer dominance and seller dominance can be seen by the shift from red to green
price bars, meaning buyers are taking over from sellers, at bottoms, and conversely the
shift from green to red at tops. These shifts can easily be seen within the boundaries of the
SmartLines buy and sell cycles. When the SmartLines converge, they signal entry into a buy
or sell cycle which confirms the shift of dominance between buyers and sellers.
According to DVAN CEO, Jim Kennedy: Our aim is to simplify the trading process and
create a visual display of the market or individual securityproviding clear decision points for
trading, analysis, and investment strategy.
In addition to the DVAN SmartLines Cycles indicator, DVAN includes in its packages numerous
other indicators for active trade management and entry/exit signals. These indicators include
DVAN Short Term Cycle, DVAN Long Term Bias, DVAN PaintBar, and DVAN Trigger Signals, and
others. When used together, these indicators either show confirming or conflicting evidence of
potential trend direction. When in agreement, the indicators give a trader the clear framework
in which to make an entry/exit decision.
Examples of DVAN indicators on TradeStation, NinjaTrader, and Optuma are shown below.

WWW.TRADERSWORLD.COM June/July/August 2017 58


The newest addition to the DVAN SmartLines offerings is the ability to load a portfolio or
watchlist into a monitor and screen for conditions and signals based on the DVAN indicators.
This feature greatly enhances workflow efficiency for the trader, allowing him/her to monitor
an entire watchlist of securities rather than continually analyzing individual charts.
*This feature is currently available on DVAN SmartLines versions for TradeStation
(RadarScreen), Optuma (Watchlists) and Bloomberg (DVAN Monitor App.) The Optuma
platform also enables a trader to use its scripting feature to test strategies based on the DVAN
indicators.
Once a signal is identified, the trader can then navigate to the individual chart and further
analyze and/or enter the trade if deemed appropriate. The DVAN portfolio monitor features not
only allows a trader to focus on a centralized watchlist for entry conditions, but also serves as
a monitor for current positions, showing potential exit signals, important support/resistance
points, and gain/loss since a new buy/sell cycle was indicated.
An example of the DVAN RadarScreen functionality for TradeStation is shown below.

WWW.TRADERSWORLD.COM June/July/August 2017 59


DVAN SmartLines is used worldwide by individual traders and institutional clients to enhance
trading and investment decision making. DVAN is applicable to all asset classes and time
frames. It also works with alternative bar types, Renko, Range, Volume, and Tick charts. The
most popular securities traded by DVANs individual clients are index and commodity futures,
currency pairs and futures, and equities. Most clients focus on intraday time frames and other
intraday chart types, but many also employ DVAN SmartLines analysis in longer-term equity
investing.
DVAN offers a free trial of the DVAN SmartLines indicators and packages on all platforms,
with trials starting at 2 weeks and adjusted as traders need more time. During the trial, a
DVAN representative is available for multiple one-on-one web sessions to provide additional
training and education on signals, setups, and best practices in using the indicators.

For more information or to schedule a trial of DVAN SmartLines, please visit:

www.dvansmartlines.com
email info@divergenceanalysis.com

WWW.TRADERSWORLD.COM June/July/August 2017 60


THE ULTIMATE BOOK ON STOCK MARKET TIMING VOLUME 1: CYCLES AND PATTERNS IN THE INDEXES
Updated and rewritten for 2017 release! Originally published in 1997, this 3RD edition includes all DJIA, S&P and
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The Merriman Market Analyst, Inc. phone: 248-626-3034 www.mmacycles.com
WWW.TRADERSWORLD.COM June/July/August 2017 61
THE 18-YEAR CYCLE IN U.S. STOCKS
By Raymond Merriman

INTRO

Throughout our search for long-term cycles in the U.S. stock market, there is one consistent
divisor that occurs over and over again. That is the 18-year interval. If we multiply this interval
by two, three, four, or five, it seems to consistently yield a valid cycle in stock prices. These
cycles, interestingly enough, all have the characteristics of a dominant cycle, such as: the lowest
price at the start of the cycle in the case of bull markets, or the lowest price at the end of the
cycle in bear markets.

The existence of an 18-year cycle thus allows for the possibility of a longer-term 90-year cycle in
stock prices. However, due to the relatively short history of the U.S. stock market, there are only
two cases of this possible cycle so far, but they are the two most severe declines in the history
of the U.S. stock market: the trough of 1842 and 1932. Our concern is whether a third 90-year
occurred in March 2009, or is still ahead.

Measured from the Great Depression low in July 1932, when the Dow Jones Industrial Average
bottomed after approximately a 90% decline from its then all-time high in September 1932, the
March 2009 low fits the time criteria for either a 72- or 90-year cycle low, if an orb of 1/6 the
median cycle length is allowed. That is, a 72-year cycle would have an orb of 12 years. Counted
forward from 1932, that would mean the next low was due 2004 +/- 12 years. March 2009 fell
into that time band, as it was 76 years and 8 months following July 1932. However, that was
also within the expected time band for a 90-year cycle, which would be due 2022 +/- 15 years.
The overlap of these two cycles would be 2007-2016. It is tempting to conclude that both cycles
would unfold together, as they did in July 1932. But that is not always or even usually the
case, except when the shorter cycle is a sub-cycle within the greater cycle. The 72-year cycle is
not a sub-cycle phase of the 90-year cycle.

What the 72- and 90-year cycles do share in common with one another, though, is an 18-year
cycle. Thus, the challenge is to determine if the 18-year (and 72-year) cycle trough of March
2009 was the end of the 90-year cycle and start of a new one? Or is there one or two more 90-
year cycles to complete a 90-year cycle? The distinction is important, for if this is a new 90-year
cycle, the U.S. stock market will be very bullish for many, many years, based on our cycle rule
that the first phase of (almost) every cycle is bullish. That means this 18-year cycle would likely
continue to exhibited higher and higher prices past its midway point (i.e. past the 8th year), and
its low would not likely fall below the low of March 2009. On the other hand, if this is the last 18-
year cycle phase of a greater 90-year cycle, then there is yet to come an even steeper decline
than witnessed in March 2009, for the last phase of a longer-term cycle that has been bullish is

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the most bearish phase of all. It is when the steepest decline of the entire cycle happens.

One will note that the decline into March 2009 was the steepest decline in the DJIA since 1932.
It lost over 54% of its value between the then all-time high of October 2007 and the low of
March 2009. That is typical when longer-term cycles (longer-than 18-year cycles) come due. And
typical of the first phase of a new long-term cycle, the DJIA has been very bullish since March
2009. It has soared to new all-time highs already since March 2007. In fact, the market has
already appreciated nearly 50% above its prior all-time high of 14,198 in October 2007 when it
reached 21,169 on March 1, 2017. Again, this is only the first phase of a greater 72-year cycle,
so this type of rally is consistent with cycles theory.

However, if there is a greater 90-year cycle, and it didnt bottom in March 2009, then it is due
at the end of this current or the next 18 year cycle, with the greater probability being at
the end of this current one. That would make this current 18-year the last phase of the greater
90-year cycle and last phase contains a decline that exceeds those of any prior 18-year cycle
phases within that greater 90-year cycle. In other words, the end of this current 18-year cycle
would likely see a loss in value exceeding 54%, the loss witnessed into the March 2009 low. In
fact, if it matches the amplitude of decline in the two prior possible cases of 90-year cycles as
well as that observed of declines into a very long-term lows of other financial and commodity
markets the loss could be as much as 77-93% off the high of this current 18-year cycle.

Therefore, this current 18-year is arguably the most important 18-year cycle to be experienced
in our lifetime. It will tell us a great deal about the labeling and even existence of a 90-year
cycle in stock prices. If there is a serious decline ahead into the end of this current 18-year
cycle, in which the DJIA declines more than 54% of value from its all-time high, then it supports
the idea of a 90-year cycle being alive and well. If the decline into the end of this current 18-
year cycle is more benign and consistent with most 18-year cycles, then the 72- and possibly
90-year cycles bottomed in March 2009. In that case, the U.S. stock market would likely be very
bullish for several more years. So, lets examine in more detail the nature of the 18-year stock
market cycle.

THE 18-YEAR CYCLE

All of this brings us to the first long-term cycle that has enough historical instances to warrant
serious consideration as a valid cycle in U.S. stocks. As such, it holds the possibility of being of
great value to investors. Prior to this point, we analyzed possible cycles that were probably too
long in length to make a serious difference in ones investment decisions. Additionally, we had
too few of instances of these very long-term cycles to consider, and those that we did have were
oftentimes confusing because it seemed as if there were sometimes two concurrent cycles of
the same periodicity in force (i.e. the 72- and 90-year cycles). In fact, there were (are), but it is
more difficult to grasp and apply the fact that oftentimes these two concurrent cycles would
come together and behave as one again.

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18-YEAR CYCLES IN U.S. STOCKS

1797
1. 1813 (16)
2. 1829 (16)
3. 1842 (13)*
4. 1857 (15)
5. 1877 (20)
6. 1896 (19)
7. 1914 (18)
8. 1932 (18)
9. 1953 (21)
10. 1974 (21)
11. 1987 (13)*
12. 2009 (22)*

Table 1: 18-Year cycle lows. Those with asterisks refer to a distorted cycle, although cycle #12
is actually 21 years and 5 months, which is in the normal range.

But now we begin the study of a very consistent historical stock market cycle the 18-year
cycle. As we commence this study, keep in mind the basic principles of cycle studies, and most
importantly the rule that cycles oftentimes distort in their last phase, particularly when a more
dominant and longer-term cycle is coming due. If one can accept and remember this rule, then
this study is a revelation of great beauty. So, lets first of all identify the years of the 18-year
cycle trough in U.S. stock prices, shown in Table 1.

The number in parentheses refers to the number of years between the previous cycle troughs
(i.e. length of that cycle). There were only three cases of slight distortion: 1842 and 1987,
which were contracted cycles, and the latest one, which was a 22-year expanded cycle in March
2009. In the first two cases, the cycle distorted to a contracted 13 years, and were part of
probable longer-term cycles that were even more dominant than the 18-year cycle (i.e. 72- and
54-year cycles). In the last case of March 2009, it was a cycle expansion, and again coincided
with an even longer-term cycle. In nine of these 12 instances, the 18-year cycle unfolded
in the expected time band of 15-21 years, without distortion. In the other three cases, two
were contractions of two years and the third was an expansion of one year beyond the normal
periodicity. However, in the last case (October 1987 March 2009), the actual interval was 21
years and 5 months, so it could rightly be labeled a normal cycle of 21 years, as it is actually
closer to 21 years than 22 years long.

The mean periodicity of this cycle (excluding the three possible instances of distortion) is 18
years, with a range of 15-21 years. The orb of three years either side of an 18-year median is
perfectly acceptable by our cycle rules (i.e. a cycle may vary in length up to 1/6 of the time of

WWW.TRADERSWORLD.COM June/July/August 2017 64


its median). In this case, a normal 18-year cycle will have an orb of three years. In all cases
where distortion did not occur, the range was indeed within three years of this median (18 years
+/- 3 years). The 18-year cycle in U.S. stock prices is thus a very consistent and reliable long-
term cycle. Those who study correlations between astronomic cycles and stock market cycles
(the subject for Volumes 2 and 3) will be very pleased to know that this is close to the same
cyclic periodicity of the Moons North Node orbit around the Sun (18.73-years).

TIME AND PRICE FACTORS OF 18-YEAR CYCLES

Some tables are invaluable for learning purposes. One of these is Table 2.

Table 2 lists the dates of each 18-year cycle its beginning trough, crest, and ending trough. It
identifies the numbers of years the market rose from the start of the 18-year cycle to its crest,
and then the number of years it declined. From that, one can easily see whether a cycle was
a right, center, or left translation pattern. That is, did it top out before the middle of the entire
cycle (left translation), after the middle of the cycle (right translation), or nearby to the middle of
the cycle (center translation). If it rallied more than it declined, it was a bullish right translation
cycle. If it declined more than it rallied, it was a bearish left translation cycle. If the crest was
near the middle of the cycle, it was a center translation cycle. However, translation is not as
important as the relationship of the price at the beginning of the cycle compared to the price
at the end of its cycle. If the lowest price was at the start of the cycle, it was a bullish cycle. If
the lowest price was at the end of the cycle, it was a bearish cycle. If there was a lower price
between the beginning and end, then it was not the correct cycle for usage.

The next columns provide the price of each trough that began and ended the cycle, as well as
the price of its crest. The last two columns then provide the percentage of change from the low
(beginning trough) to the high (crest), and then the percentage of change from the crest to the
trough that ended the cycle. These studies are extremely valuable in our understanding and
analysis of 18-year cycles - as important as the patterns that form within each cycle.

18-YEAR CYCLES
Cycle# Trough Crest Trough Yrs Up Yrs Dn Low* High* Low* %Up* %Dn*

1. 1797 1806 1813 9 7 3.0 8.0 4.0 166.7% 50.0%


2. 1813 1824 1829 11 5 4.00 15.0 10.5 275.0% 30.0%
3. 1829 1835 1842 6 7 10.5 25.0 5.0 138.1% 80.0%
4. 1842 1852 1857 10 5 5.0 22.0 8.0 340.0% 63.6%
5. 1857 1873 1877 16 4 8.0 36.0 22.5 350.0% 37.5%
6. 1877 1889 1896 12 7 22.5 50.0 27.0 122.2% 46.0%
7. 1896 1906 1914 10 8 27.0 102.0 52.0 277.7% 49.0%
8. 1914 1929 1932 15 3 52.0 386.1 40.6 642.5% 89.5%
9. 7/32 1/53 9/53 20 1 40.6 295.1 254.0 626.8% 13.9%
10. 9/53 1/73 12/74 19 2 254.0 1067.2 570.0 320.1% 46.6%
11. 12/74 8/87 10/87 12 1 570.0 2746.7 1616.2* 381.9% 41.2%
12. 10/87 10/07 3/09 20 2 1616.2* 14198.1* 6469.9* 778.5% 54.4%
13. 3/09 ??? ??? 8# ??? 6469.9* 21169.1# ??? 227.2%# ???

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Table 2: List of 18-year cycles in U.S. stock market, showing number of years between trough
and crest, then number of years between crest and trough, and percentage of each move. *
Means that up until 1932, all prices quoted here are approximations. Starting with cycle #9,
prices and percentages are exact. It also means that prior to 1987, all prices are theoretical,
not actual. Starting in 1987, prices are actual lows and highs, not theoretical. # means the
current cycle is still underway and these numbers are confirmed yet. They are based on the
high as of March 2017.

As found in Table 1, all twelve of the completed 18-year cycles lasted 13-22 years. The number
of years between the start (trough) of the cycle and its crest ranged from 6-20 years. If we omit
cycle #3 (1829-1835), where the rally only lasted 6 years, we will observe that the other eleven
cases did not top out until at least the 9th week of the cycle. Thus, the probabilities are greatest
that an 18-year cycle will not top out until 9-20 years after it begins. In six of these 11 cases,
it topped out 9-12 years after it stated (50% of total cases to date). In five of these cases, the
crest occurred 15-20 years into the cycle. Four of these instances occurred within the last five
cases (cycles #8, 9, 10, and 12). It is interesting to note that all of those occurred after the
Federal Reserve Board was established on December 23, 1913. The one case that didnt last
at least 15 years was the 1974-1987 instances, which only lasted 13 years. In that case, the
decline unfolded in less than two months after the crest. The creation of the Federal Reserve
Board has been an exceptionally powerful force for the ongoing bull market in stocks, although
there have been instances in which the stock market has declined sharply, but in relatively short
periods, as will be seen momentarily.

The periods of decline from the crest of the 18-year cycle to its trough at the end, has ranged
from 2 months (the 1987 case) to 8 years. Since the Great Depression of 1932, there have been
no declines from crest to trough that have lasted more than two years. Even the 90% decline
into the Great Depression low of 1932 lasted only 3 years. Prior to that prior to the creation of
the Federal Reserve Board in late 1913 all declines had lasted 4-8 years. Since the creation of
the FRB, no declines have lasted that long.

In the entire history of the stock markets 18-year cycle, there has been no left translation
pattern, unless one considers cycle #3 (1829-1842) a left translation pattern. In that case,
the market was up 6 years, then down 7, which is more like a center translation pattern. The
first and 7th cycles (#1 and #7) can also be considered a center translation patterns. Cycle #1
was up 9 years, then down 7 years. Cycle #7 was up 10 years and down 8 years. Since cycle
#7 (1896-1914), every 18-year cycle has exhibited a very sharp right translation pattern,
again suggesting the power of the Federal Reserve Board in its ability to guard the wealth of
Americans who are invested in the stock market over a long period of time. Many may complain
that the Fed has too much power in its ability to manipulate and engineer the American
economy and its stock market, and that their activities and policies have led to massive stock
market crashes. However, there can be no denying that the stock market has exhibited a vastly
more bullish bias since the creation of the Fed, and thus uplifted the overall wealth of the
individual stock investor.
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The amplitude of the price move from trough to crest historically is also of great interest. This
increase in prices has ranged from 122-778%. That last cycle (#12) witnessed the greatest price
appreciation of 778%. If we remove the three smallest gains (122.2, 138.1, and 166.7%) and
the three greatest (626.8, 642.5, and now 778%) moves, then we get a more moderate range of
price increase of 275.0 382% with an average of about 325%. The current 18-year has shown
a price appreciation so far of 227%, which is a little shy of the majority of cases. Applying this
percent of appreciation range to an 18-year cycle low will thus give an estimated price range
for the crest of future 18-year cycles, with the understanding that it could increase much more.
Why? Because since the creation of the Federal Reserve Board again, in 1913, all of the cases of
18-year cycle have shown an appreciation of at least 320%, with a range of 320-778%. All four
of the cases in which 18-year cycles have gained more than 350% have occurred since 1914,
and three of these four cases have gains that exceeded 600%. The average gain since 1914 has
been 565%!

There are other interesting correlations that can deduced through study of these 18-year cycles.
One factor that has remained fairly consistent is the amplitude of the decline from cycle crest to
cycle trough. The vast majority of declines have been 37.5-63.6%. Only one cycle has declined
less than 37.5% and only two have declined more than 63.6% (the 1842 low was an 80%
decline, and the 1932 trough represented a decline of almost 90%). So, once we suspect an
18-year crest is in (i.e. it fits the time and price measurements of the historical averages), we
can calculate an approximate support level (and time) for the future 18-year cycle trough. As
an illustration, the most recent 18-year cycle topped out in October 2007. And from there, the
DJIA declined 17 months to a low in March 2009. The amplitude of the decline from the crest
in October 2007 to the trough in March 2009 was 54.4%. This was within the 37.5-63.6% that
have been present in all but three of the twelve historical cases of 18-year cycles.

Is a cycle like that of 1842 and 1932 coming due again, where the stock market will decline 80-
90%? Possibly. And if it does, it will likely show up also as an 18-year cycle, and one which will
be the final phase of a longer-term cycle. If there is a 90-year cycle as discussed earlier in this
article (and the lows of 1842 and 1932 are exactly 90 years apart), then such a long-term cycle
might occur at the end of the current 18-year cycle that began in 2009. Ideally, that would be in
2027 +/- 3 years. But since the last cycle of 2009 expanded to 22 years, there is reason to think
this one might contract to less than 15 years, especially if there is to be a 90-year cycle then.
One of our cycle rules is that when longer-term cycles come due, the shorter-term cycles more
often distort from their norm.

Thus, there are some interesting thoughts that can be considered in this possible scenario. First
of all, 90 years after 1932 would be 2022. The year 2022 would be 13 years after the current
18-year cycle began in 2009. That cycle (1987-2009) was the longest on record. A 13-year cycle
would tie for the shortest on record and would balance the cycles out (long, then short). But
there is one problem with this argument: the 1987-2009 cycle was long, but it followed a short

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13-year cycle that was in effect from 1974 through 1987. It had already performed a balancing
act. However, if we look back further, we will see that the cycle before that was also a long 21-
year interval (1932-1953). Is it possible that the 18-year cycle is see-sawing back and forth
between long cycles followed by short ones? If so, we are due for a short one with the start of
2009. And if it is a contracted 18-year cycle, it will have the characteristics of an even longer-
term cycle. It wont be the 72- and 36-year cycles. It would have to be a 90-year cycle.

We havent had an 80-90% decline since 1932, and the one before that was 1842. If there is
another one on the horizon, it could be due at the end of this current 18-year cycle. And if so,
the crest would likely culminate at least two years before that decline ends. In other words, if
there is to be a 90-year in which the DJIA declines more than 54% - and quite possibly 77-93%
- and if is to be a contracted 18-year cycle (less than 15-years), there is a very good chance that
the crest of this cycle will be completed anytime within the next three years. In the event that
2009 was the end of both the 72- and 90-year cycles, then it is unlikely the DJIA will encounter
another decline exceeding 54% for several years, as it continues to soar to more new all-time
highs.

How will we know, as cycles analysts? We will dissect the current 18-year cycle in the same
manner we dissect all cycles, as outlined in the newly written third version of the The Ultimate
Book on Stock Market Timing, Volume 1: Cycles and Patterns in the Indexes, due for release
this summer, 2017. That is, the 18-year cycle will break down into a pattern of three 6-year
cycle phases, two 9-year cycle phases, or a combination of each. The first 6-year cycle phase
(range 5-8 years, so it is more like a 6.5-year cycle, except the first phase of every 18-year
cycle has been 5-7 years) already occurred on August 24, 2015 (see enclosed chart). We are
already in the second of three 6-year phases now, or in the middle of what could turn out to be
a combination pattern, with a half-cycle at the 9-year mark (March 2018 +/- 18 months). Note
that if there is a half-cycle, the decline tends to be very steep - much steeper than the decline
into the first 1/3 phase of the cycle (which was 16.2%). In addition to our market timing studies
(cycles analysis plus geocosmic studies), there are also several technical and charting tools that
can be used to determine which cycle pattern is in force as we progress further into the current
18-year cycle, but that is a discussion for another article, and one that we cover in the Stock
Market Timing Book to be released this summer.

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Raymond A. Merriman is the President of The Merriman Market Analyst, Inc. and founder of
the Merriman Market Timing Academy. He is a Commodities Trading Advisor (CTA), financial
market analyst, and editor of the MMA Cycles Report, a monthly market advisory newsletter that
specializes in stocks indices, interest rates, currencies, precious metals, crude oil and soybeans
since 1982. He also writes a daily and weekly report for more active traders. Merriman is the
author of several books on Financial Market Timing, including the series on The Ultimate Book
on Stock Market Timing, Volumes 1, 2, 3, 4 and 5 (1997-2017); The Gold Book: Geocosmic
Correlations to Gold Price Cycles (1982); The Sun, Moon, and Silver Market (2006); Solar/Lunar
Correlations to Gold Price Reversals: Secrets of a Gold Trader (2015); and the annual Forecast
Book (since 1976), which outlines his projections a year ahead of time for financial markets, the
world economy, and political trends.

In early 2013, Merriman was awarded the Gold Star by Market Timing Digest of Amsterdam,
Netherlands as the Best Market Timer of 2013. He was the only contestant (of twelve who were
followed) to successfully identify all 15 major turning points in the U.S. stock market by their
criteria. The second place finisher successfully identified 12. In 2014, Merriman received the
Gold Star award again as Best Market Timer of the Year from Market Timing Digest, this time
correctly identifying 20 of 21 reversal dates in the U.S. stock market well ahead of time.
Merriman currently resides in Cave Creek, Arizona and Farmington Hills, Michigan, USA. He can
be reached at rmerriman@merrimanmta.com, or mmacycles@gmail.com, or via the MMA website
at www.mmacycles.com.

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2017 The Opportunity Of a Lifetime?
By Andrew Pancholi

By the end of this article not only will know and understand why 2017 is likely to be one of
the most critical years in the world financial markets, you will also know some of the key time
windows when trend changes are highly likely to take place.

Im going to show you how macro cycles play out in global markets and then explain how they
are coming together this forthcoming year creating a financial tsunami!

Im going to begin with an overview of key cycles and thereafter we will fine tune some key
timings.

Many of you will be fully aware of the decennial cycle.

It was first documented by Edgar Lawrence Smith in his 1939 book Tides in the Affairs of Men.
In what was really only a study of 40 to 50 years of stock market data up until that point in
time, Smith found that years ending in three, seven and zero were often down years.

Years ending in five, eight and nine were generally advancing years.

His research was based on optimism and pessimism in human beings and how he believed that
weather, sunspots and radiation affected their thought processes.

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The first point is that 2017 is indeed a year ending in seven and therefore one of the most
bearish years in the decennial cycle. We are very susceptible to change this year. We shall come
back to this shortly.

However, the real secret to forecasting is in super long-term cycles and its all about knowing
where to look.

In order to illustrate this lets head back to the 1929 Wall Street crash.

If you were to add 72 years to 1929 we arrive at the year 2001. Most of the equity markets
began peaking in the year 2000 and of course 2001 saw the infamous attack upon New York on
911.

Returning to 1929 and moving BACK 72 years we arrive in 1857. 1857 saw one of the first
modern day financial crises to hit the globe. By now the world is interconnected. This meant that
the stage was set for a domino effect collapse to take place.

In Britain the government of Lord Palmerston effectively violated Nations banking laws by not
keeping the appropriate gold and silver reserves as had been decreed.

In America the railroad boom was turning to bust for the first time. Money had been cheap and
easy. Railroad stocks peaked in July 1857 and then in August, The Ohio Life Insurance and Trust
Company failed stemming a financial panic. Given the prosperous years leading up to this many
banks and financial institutions had taken much greater risk and consequently huge numbers of
failures occurred.

During the course of the next few years the American stock market would decline 62%.
Doubling up the 72 year sequence gives us 144 years. This is the time period, as you have just
seen, from 1857 to 2001.

Let me now tell you about the 100 year cycle.

1907 saw the Rich Mans Panic. Economic uncertainty came in after the 1906 San Francisco
earthquake. By 1907 credit had dried up. Panic set in and once again there were runs on banks
and many failures. Interestingly, JP Morgan himself was called in to help stabilise the markets
with his vast wealth.

Many of you will be fully aware of the events of 2007 and the Global Financial Crisis. Exactly
100 years from the Rich Mans panic we saw the rapid drying up of credit. This combined with a
whole series of other challenges including the implosion of CDOs and CDSs and led to a massive
collapse. Interestingly, the government called on certain banks to help bail out the situation yet
again.

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You can see that history repeats pretty much exactly and right on schedule. But let us take the
sequence a little further and look at the midpoints of the 100 year cycle, this being 50 years.
Starting in 2007 lets go back to 1957 will see the market sold off over several months. This was
due to a general economic rundown partly caused by the saturation of the automobile market.
Go back another 50 years and we end up in 1907. Weve already talked about the rich mans
panic which was also known as the Knickerbocker crisis.

Now lets go back another 50 years and we see something really interesting. This takes us to the
year 1857. Weve already seen this in the 72 year cycle. It also features in the 100 year cycle
and that is why it was such an important economic turning point.

Something similar is happening in 2017.

50 years back from 1857 takes us to 1807 when the United States brought in the embargo act
in order to supposedly disengage from European hostilities. American vessels were prevented
from trading in any foreign port. However this act did nothing more than stress the US economy
immensely as trade was severely restricted.

Once again you can see that this is another cycle that works like clockwork.

Finally I want you introduce one more cycle set and that revolves around the 90 year cycle and
its midpoint of 45 years.

A perfect example of this is Brexit.

Britain went to the polls on 23 June 2016. The outcome of the referendum was to leave the
European Union.

At The Market Timing Report, we had forewarned people that this was a distinct possibility and
here is why.

Exactly 45 years ago to the day, the French finally dropped all resistance to Britain joining what
was then known as the common market. It is fascinating to see that this actually happened to
the exact day. In other words a huge shift in opinion occurred.

But the plot doesnt end there!

If one was to then go back a further 45 years or a total of 90 years all the way back to 1926 we
find that Spain suddenly left the League of Nations in protest of the actions of Germany. The
theme is very similar. European polarization!

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Lets return to the 1929 crash. If we add 90 years to this point we come into the year 2019. We
can expect a serious correction then.

Going back another 90 years takes us to 1839, this was again a year of crisis. The half cycle of
90 years is 45 years.

Adding 45 years to 1929 gives us the year 1974. The Western world had been brought to its
knees by the OPEC oil crisis. This was a major turning point.

However the recovery from then has continued all the way to where we are now. In fact we can
argue that 1974 saw the genesis of the present bull market. That gives us ominous signs for
2019.

However before 2019 we have 2017 to contend with.

Now that you have an overview of the major cycles that affect markets, I want to present the
case for why 2017 is likely to be a landmark year.
First of all, thinking all the way back to the decennial cycle, 2017 is a year that ends in seven.
As we already know years ending in seven are very susceptible to corrections and our research
shows that pretty much every year ending in seven of the 20th century had a major pullback.
2017 is exactly 10 years on from 2007.

From the high in 2007 to the eventual low in 2009 market declined over 50%.

We will now look at the long range cycles that are weaving together and coming to a head in
2017.

So lets jump all the way back to 1837. Stay with me! This will be 180 years from 2017.
180 years back takes us to the 1837 crash and subsequent recession which led into a
depression.

In America loan money was very cheap. Chicago and the surrounding regions were the main
focuses for development. Both railroads and canals were being developed at a great pace so
that the Midwest could be connected to the great Lakes thus providing Atlantic access through
the St Lawrence Seaway. Property prices rose exponentially and what followed was a huge land
speculation crisis.

This was exacerbated by a rapid decline in commodity prices.

Meanwhile simultaneously back in Europe in 1837 Great Britain had also rapidly reined in
lending.

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The consequences were severe. Confidence fell in both the currency system and economy.
By the early 1840s American stock prices were down 74% from the highs of the previous
decade. A serious depression had kicked in. Over 850 American banks failed. We really need
to be aware of this supercycle, the multi-decade rally that preceded it and what potentially lies
ahead. This long-term scenario is not too dissimilar from where we are now.

Thus far weve introduced the 10 year cycle I and the 180 year cycles as being relevant to 2017.
We looked at the historical importance of the 144 year cycle and when we apply this to 2017 it
takes us back to 1873.

1873 saw multiple panics break out around the globe. In Europe, crisis broke out in Vienna and
spread across the continent. Meanwhile in the USA the Jay Cooke crisis took place. Jay Cooke
collapsed as the railroad expansion began to falter yet again. The company declared bankruptcy
on 18 September 1873. From 20 September the New York Stock Exchange closed the for days.
This panic developed into a depression that lasted six years.

The markets endured a panic seeing a drop in excess of 20% in America.


You will recall how the hundred year cycle helped us forecast the 2007 and 2008 global financial
crisis. Let us now look at the relevance of this cycle for 2017.

Heading back to 1917, the globe was in the penultimate year of the First World War. Whilst wars
are generally good for economic production due to the high demand for arms, none of the parties
had anticipated that this war would go on so long. A major high came into place across the stock
markets in autumn 1917 and we saw a 45% correction that lasted a year.

The next cycle that is coming into play is that of 90 years. This takes us back to 1927. During
this time period we saw a somewhat smaller pullback in what was the biggest and most
aggressive bull market to date.

Heading back 60 years takes us to 1957. The US market sold off steadily as industrial production
peaked. The mass market for automobiles reached saturation level. There were a series of
strikes and labour relations issues.

Some of you will recall the 1987 crash. At the time it was seen as a greatest financial meltdown
ever. 2017 will be exactly 30 years on from this date. The market sold off 37%. 23% of this
decline occurred on Black Monday 19th October.

If we were to look back 20 years back to 1997, the globe experienced the Asian financial crisis
which led to a temporary suspension of trading on the New York Stock Exchange. The 20 year
cycle is important and dont be surprised if we see a crisis with origins in the Far East in 2017.
Lets look at this altogether. There is a lot of information to synthesise.

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2017 is a year ending in seven.

Its going to be 180 years from the 1837 panic which had its roots in Chicago. Thats a big one.
1873 is going to be 144 years back from the Jay Cooke panic. This was the end of the railroad
boom.

The 100 year supercycle from 2017 takes us back to 1917 and saw a pretty hefty sell-off.
The 90 year cycle saw a pause in the rampant bull market of The Roaring 1920s.

The 60 year cycle from 1957 saw a significant sell-off as automobile manufacturing peaked.

The 30 year cycle takes us all the way back to the 1987 crash.

The 20 year cycle takes us all the way back to the Asian financial crisis.

The 10 year cycle takes us back to the global financial crisis.

Our real challenge comes in our need to fine tune the cycles. After all just knowing a particular
year doesnt really offer us a tight enough window to manage money.

Timing is imperative. Pre-empting a situation can lead to drawdowns very rapidly and of course
leaving it too late can mean that a suitable risk reward ratio could be missed.

So fine tuning is the key.

We set about analysing a series of short-term cycles. These are many and very complex. Some
are linear and some are dynamic. Here at The Market Timing Report we have programmed all
this information into our system that provides us with warnings on when turning points are likely
to occur.

The strength of the cycles is shown by the height of the histograms.

Where the histograms peak, like this, there is a high or low as the market changes trend.

These histograms go way into the future.

This enables us to get a handle on timing points well in advance.

We look across a series of different timeframes and to keep it simple we resolve everything into
a series of histograms.

We can also do the same with smaller daily cycles enabling us to pinpoint specific dates when we

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believe changes in trend are likely to occur.

Then by putting this all together were able to see where the large cycles coincide with the
smaller daily cycles.

In terms of directional probability we know the direction of the market heading into a turn. On
approximately 90% of occasions reversals takes place. Hence if we have a position running into
the timing window we will protect that or close it. Occasionally accelerations occur from these
points.

The histograms are based on proprietary cycles that are effectively the DNA of that particular
market. They are specific to the individual market and relevant time period.

By using the much shorter term cycles we are able to hone in on specific days. Then from a
money management, perspective we look at the timing point from two different angles. Firstly,
we protect or close any positions that we have running into the point and secondly we watch the
market unfold and see what campaigns we can enter using our risk reward parameters.

There is a huge histogram spike coming up. This is the biggest Spike weve ever seen. This
suggests a very significant turning point coming up roundabout September October 2017. I dont
actually know theres going to be a major high or low but I do feel its going to be a major crisis
point given the super long term cycles that we have been discussing.

Clearly there will be turning points before then.

Lets revisit some of those super long term cycles.

90 years ago in 1927 the market made a high on 3rd October and sold off into 24th October.
60 years ago in 1957 the market made a high on 16th of July and the final low came in on 22nd
October.

30 years ago in 1987 the market made a high on 25th August, then a secondary high on 2nd
October and the final low came in on 20th October.

Can you see how closely these three thirty year cycles are correlating with our modelling for this
year?

If we were to add the 20 year cycle to this discussion here then we see the market made a high
on 7 October and sold off sharply into the 28th October. Again this ties in with the three thirty
year cycles and the modelling too.

In summary we can see that there are several factors pointing towards a major market move

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this autumn.

Now here is the huge advantage of this type of work.

In times of major panic, or indeed times of euphoria human emotions kick in and objectivity is
usually lost. This is usually exacerbated by press comment and sentiment.

The system affords us the opportunity of potentially seeing through emotional behaviour. Its like
the military using night vision goggles.

A key turning point that we see is the time period of the weeks ending 21st and 28th July. The
super macro monthly cycles for October that we have spoken about are supported by cycles for
the week ending 20th of October 2017.

The bottom line is all these timing cycles must be used in conjunction with your very own trading
and money management systems.

Try Market Timing Report RISK FREE


https://ws227.isrefer.com/go/mtratw/larry/ www.markettimingreport.com

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Making Cyclical Analysis
Human-readable for Traders
By Lars von Thienen, www.whentotrade.com

Cycles are important not only in physics but also in behavioral economics. They surround and
influence our daily lives. Many events are cyclical in motion. Although cycles are not clearly
visible in financial markets, the movement of stock prices follows different dynamic cycles. The
impacts of psychological, social, cognitive, and emotional factors on the economic decisions of
individuals and institutions do not cause market prices to move abruptly, but rather in cyclic
waves.

Therefore, rather than just reacting to and analyzing market prices, it is more practical to
analyze their underlying drivers based on the core structure of their driving cycles such as
sentiment, news, or economic cycles.

However, real cyclic motions are not perfectly even; their duration varies slightly from one
cycle to the next due to changing physical environmental factors. This dynamic behavior is also
evident in financial market cycles. Analyzing these cycles requires an awareness of the active
dominant cycle parameter and the ability to verify and track the real-time status and dynamic
variations that facilitate projection of the next significant event. These conditions can change
daily like the weather forecast. The weather outlook can be predicted for the next week;
however, the parameters could change daily, which leads to an updated weather forecast. The
same is true for dynamic cycles in financial markets. A cyclical analysis does not stay fixed until
the next cycle as predicted in a static forecast. The underlying forces of a dominant cycle need
to be re-assessed regularly, which leads to an updated cycle forecast in turn. It is this dynamic
factor that makes analyzing and trading cycles a complex task.

Cycles morph over time due to the nature of their inner parameters of length and phase. Active
dominant cycles in financial markets do not abruptly jump from one length (e.g., 50) to another
(e.g., 120). Typically, one dominant cycle will remain active for a longer period and vary around
the core parameters. The genes of the cycle in terms of length, phase, and amplitude are not
fixed and morph around the dominant mean parameters.

Steve Puetz refers to this phenomenon as: Period variabilityMany natural cycles exhibit
considerable variation between repetitions.

Applying cyclic analysis in financial markets to obtain more reliable and robust information on
the dominant cycle requires the following steps to be performed:

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Step 1: A cycle detection algorithm should include a dynamic detrending filter during pre-
processing. This ensures that the data is not affected by linear trends.

Step 2: Next, a cycles engine performs spectral analysis based on optimized algorithms using
time-series data, and subsequently isolates any repetitive cycles.

Step 3: The statistic reliability of each cycle is evaluated with the goal of excluding cycles that
have been influenced by one-time random events. This method measures the likelihood that a
given cycle is genuine.

Step 4: An important final step in analyzing cyclic information is to measure the strength of a
cycle. Calculating the price influence of a cycle per bar on the trading chart is crucial.

Step 5: Finally, the outcomes of all detected cycles are sorted according to the calculated cycle
strength score.

After a cycles engine has completed these five steps, the cycle at the top of the list provides
information regarding the dominant dynamic cycle in the analyzed market. In fact, the
wavelength and phase of this cycle is the dominant dynamic cycle, which is useful for trading in
financial markets.

These five steps are fundamental for every successful cycle trading approach. However, these
steps are a tough challenge for technical algorithms. We have worked for over 20 years on cycle
detection in financial markets. This year, we have made the decision to move our cycles engine
into the cloud. This step allows any charting tool or financial analyst to access our engine upon
request with standardized API calls. This is a big step since cycle analysis was never so easy to
integrate before.

Additionally, based on our experience and feedback from customers in past years, even with a
cycle engine at hand, it is not easy to read and interpret all the cycle parameters for successful
trading. Forecasting trading cycles is more of an art than merely determining buy and sell
signals from the price chart. Therefore, we optimized the cycle output into a more human-
readable format. Instead of mathematical phase values, we present the phases in a human-
readable format, such as approaching top or starting downtrend. Moreover, we learned that
it is unwise to pay attention to only one dominant cycle or one market. Since there are several
cycles that are active at the same timeattention must be paid to related markets or underlying
indicators to obtain valid trading information from other cycles.

Different cycles in different markets can neutralize general price movements or they can amplify
price behavior.

Pulling up information for all markets manually and applying cycle analysis repeatedly for each

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market/indicator daily is a tough process. To simplify this basic daily routine, we have automated
the process and perform a daily analysis for most major markets. We present the output in a
dashboard view and send a briefing email directly to subscribed users. This facilitates a quick
overview of the active dominant cycles in each market, and cycles-within-cycles information with
a phasing score for the current active long- and short-term cycles, and a broad view of related
markets to validate cross-market cycle alignments, similar to reading the weather forecast at the
start of the day.

A ready-made, human-readable report on active cycles in financial markets is delivered daily via
our dashboard or directly to a users inbox.

Now, let us review how to use this information in practice and review some examples from the
past weeks:

In April, silver rallied to a high of around 18.50 USD and paused for a few days. On April 19,
2017, a look at the daily dashboard (Figure 1) for commodities shows that the cycle for silver
has a TOP_Arrival phase status with a price of 18.22 USD.

Figure 1: Silver price with cycles dashboard on April 19, 2017


In Figure 1, the dominant cycle appears to be at the top. However, a single cycle should not be
trusted on its own. Therefore, the dashboard provides all additional information needed: The
phasing score confirmed a possible alignment between the long- and short-term cycles in silver
with a score of 100. Additionally, the gold cycles (AU_LPM) confirmed a short opportunity
by signaling an already started downtrend in gold. Thus, it looks like the silver and gold
markets would be in sync for the next few days in a dominant cycle downward move. This is the
important take-away as we have a brief overview of two markets, current cycles state, and the

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cycles-within-cycles situation, all in one view.

Therefore, we can confidently predict a downward trend for silver (and gold) in the days ahead.
Next, we must monitor the price and the cycles dashboard to identify important cycle forecast
changes, similar to keeping an eye on the weather forecast when doing a climbing tour of the
mountains. The dashboard with the included dynamic cycle explorer values manages everything
and prepares a financial weather forecast. Let us review the chart to determine how things
went forward after this analysis was shown live on our dashboard in April.
Figure 2 shows a screenshot of our live dashboard from May 13, 2017.

Figure 2: Cycles dashboard view for commodities on May 13, 2017


The dashboard now shows a different forecast for our dominant cycles. The silver cycle is
in an Uptrend_Starting phase and the related gold market cycle is projected to be in its
Downtrend_ApproachingBottom phase. The phasing score differs from its theoretical value
(around -200); however, that is how cycles work in reality, where mathematical perfect
conditions do not exist. However, the phasing score is indifferent at this point, that is, it does
not indicate a conflicting signal for the expected bottom of the dominant cycle.
Thus, the simple reading at this point is that the market is not expected to move down much;
instead, it is projected that the markets could bottom out here and begin an uptrend cycle
phase. If a user is in a running short, the short trade should be closed here. Moreover, the use
could consider going long here now. Figure 3 shows the price chart for our period in review
between April 19 and May 12, 2017.

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Figure 3: Silver price chart on May 12, 2017
The chart shows that silver has declined over 10% from 18.2 to 16.3 since our cycles dashboard
view on April 19, 2017. This is not a cherry-picked case this happened live in front of our eyes
with the publicly-available cycles dashboard.

As mentioned already, the cycles dashboard provides embedded cycles-within-cycles information


based on the phasing score. The phasing score is the summary of the phase status for two
dominant cycles - a long-term cycle and its corresponding short-term dominant cycle. Both these
cycles are detected individually. The phase for each cycle is transferred into an oscillating value
between -100 and +100. This way, the phasing score is an easy readable oscillator indicator
with values between -200 and +200, where +200 would indicate a perfect mathematical top
alignment for both cycles and -200, a perfect bottom alignment.

In addition to the phasing score, the current phase status is presented in a human-readable
format. Figure 4 shows how the theoretical cycle information is converted into human-readable
information using the oscillator score.

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THE PERFECT CYCLE

Departure
1.2

Arrival

Top
Top
1

95 100
0.8
80 95

0.6

60 -30
0.4

0.2
50 -40
0

-0.2
-50 40
-0.4

-0.6
-60 30

Departure
Bottom

Bottom
Arrival

-0.8
-80
1
-95
-1 -95 -100

-1.2
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

Figure 4: Human-readable status information for the current dominant cycle


In conclusion: The cycles dashboard provides information regarding three factors, without the
need to pull up even one chart or indicator:

Status of the current dominant cycle with human-readable phase status


(e.g., TOP_Arrival)

Cycles-within-cycles status for a long- and short-term cycles


(phasing score: Oscillator -200 / +200)

Correlated market views to cross-check related markets


(e.g., Silver/Gold)

Without this dashboard, users would have to pull up each market price chart individually, attach
their cycle indicator, and calculate all cycle information on their own. We learned from our users
that even this information is hard to convert into tradable action. This is one of the reasons we
decided to provide a full cycle analysis for each dayto enable the user to get prepared quickly
and focus on their trading. Our aim is to minimize the time involved in cycle analysis.

We invite users to review our free public online dashboard on our website. If users want to receive
this daily cycle briefing directly in their inbox before the next day starts, we also offer a daily
briefing service with many more markets covered.

Our cycles API offers many more possibilities for integrating this kind of analysis into a users
own work. Do check out our new cloud API integration.
Lars von Thienen
https://www.whentotrade.com/dominant-market-cycles/

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How To Build A System Into Your Chart

By Steve Wheeler
Founder and CEO of NaviTrader.com (www.navitrader.com)
Professional Trader and System Designer/Developer www.navitrader.com

Introduction
Let me start by introducing myself. I am a full time trader and trainer in the futures markets.
I run a LIVE MARKET room two hours each trading day. I have traded for over 20 years, and
concentrate primarily on the currency (FOREX), crude oil, gold and stock index futures markets,
such as the S & P E-mini. In a previous career, I was a practicing C.P.A. in the state of Florida.
I have developed a full suite of charts and indicators known as the Trendicators and a market
analyzer known as the TradeFinder, as well as a number of automated trading systems and
automated Setup Identification and Trade Management systems.

What follows are the fundamental elements you need to assist you with achieving better
consistency in the futures markets. I have also included information below that is crucial to your
overall success and in managing your risk.

Preparation for trading profitably consists of market observation over a period of time so that the
trader can build confidence in knowing what usually happens in the market, and how to profit
from the recurring market behavior that repeats itself every day. To take advantage of cycles in
the markets, observe the typical move that a market moves after it moves up or down out of a
range contraction pattern.

The real objective is to build knowledge of probabilities of market behavior so as to take


consistent profits out of specific trading instruments. The following are observations of market
behavior that will help to put the probabilities in your favor.

How To Build A System Into Your Charts


To put the probabilities in your favor, you must have an objective method or system for your
trading. Patterns repeat themselves over and over in all markets, so knowing these patterns can
help to put the probabilities in your favor. The more you can automate your trading signals, the
more objective you will be in your trade selection. You need to determine a set of technical
conditions for which you would take a long or short position in any market. You can use
technical indicators that are widely available, or you can develop your own indicators. Once you
have chosen the indicators you want to use, test them for validity in your trading. As in any
testing, the more data the more reliable the results will be.

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Below is an example of a chart where I have developed a system to determine price bar
direction and have coded them green on an up bar and red on a down bar. This will provide
the technical indicators that need to match up for a long or short position. You can see the
automated buy signals which are the green arrows. You can use simple rules such as a buy
above the signal bar and exiting either on a trailing stop or a profit target. Whatever system you
use, be sure to test it on a sufficient sample size to test for a positive expectancy.

Making money in the market is a matter of being on the right side of the market. Specific to
the futures markets, there are both up and down moves each day that provide many trading
opportunities. One approach to the markets is to look for evidence of major support and
resistance levels based on chart history. Many people ask me which time frame that I should
look at for my trading, and by best answer is that I look at all of them. A good analogy would
be that if you were going to buy or short a stock, you would most likely start by looking at a
weekly or daily chart. Why would you approach the futures markets any differently? To put the
odds in your favor, you must find things that occur over and over and trade with this information.
Below you will see an example of a 6 (Brick Size) Navi_Renko chart of the S & P Futures E-mini
chart. This chart has buy and sell signals. The buy signals are the Green arrows pointing up
and the sell signals are the magenta arrows pointing down as noted on the chart.

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In the above chart, and the system displayed by the chart is an example of a signal that will
enable you to objectively test a signal on any chart time frame or data series that you would
like to test. Other examples would be using indicators such as moving averages for buy and sell
signals. One method of testing is to use a trade simulator. You can download data and test
based on historical data taking trades based on your entry and exit criteria. You will be able
to test various stop and profit target levels over a series of trades. I would suggest that you
test during the time periods in which you plan to trade. An example would be to test the S & P
futures from 9:45 AM Eastern time through 11:00 AM Eastern time if that is the part of the day
that you intend to trade.

How To Develop a System with a Positive Expectancy


To develop a plan that has a probability of success, you must test a sufficient amount of data
to get a statistically significant sample of trades. I suggest testing at least 75 trades during
the time period in which you plan to trade, taking the trades based on your plan and managing
the open positions according to your plan. This process will enable you to gather data on your
average winning trade, and your average losing trade in dollar terms. You will also know the
percentage of winners versus the percentage of losing trades.
From that data, perform a calculation as follows:
Probability of winning trade times the Average Winning trade in dollars -minus the probability
of a losing trade times the Average Losing trade.
Example:
( .7 x 200 ) - ( .3 x 100 ) = 110 When we have a positive value from this
calculation this means that you have a positive expectancy based on your data. In other words,
you have a system that has put the probabilities in your favor of being profitable.
Probabilities favor the continuation of a trend, therefore you want to trade or invest in the
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direction of the major trend. For purposes of intraday trading or even investing, a daily chart
is a very good place to start to analyze the major trend. To put the odds even further in your
favor, I recommend that you analyze whatever you want to trade to find out the consistency of
the trend. This can be done by measuring the trend in various time frames all the way from
short-term trends such as a five minute chart all the way to daily or even weekly charts.

Risk Management
A primary downfall of beginning traders lies in not knowing how to manage risk. The use of
protective stop losses (known as stops); is one important tool in trading futures. An even more
important tool is known as position sizing. Position sizing answers the question of how many
contracts I should trade in the futures markets, and how many shares should I buy or short in
the stock market.
We know that trading is all about how to react to your successes as well as trades that dont go
your way. No discussion of trading would be complete without a discussion of risk management.
For futures trading, risk management is established with a combination of the use of stop
orders combined with position sizing. You need to pair a proven strategy along with risk
management. Risk management is accomplished in general by never taking a big loss on any
one trade. I suggest that you start by making sure that on any one trade, you do not risk any
more than one percent of your trading account. You will need to calculate before you enter a
trade whether you would be risking more than one percent of your trading account.

To calculate position size you need to know some basic information such as the following:
Account Size
Risk Percentage that you are assuming
Tick value of contract you are trading
Number of ticks of your initial stop loss order

A Risk Management calculation example for the e-mini would be as


follows:

Entry price = 1438.25


Initial Stop level = 1436.25 = 8 ticks on the S & P E-mini
8 ticks x tick value of $12.50 = $100 $100 x 1 contract = $100 risk on this trade.
Account Size = $10,000
In this example, you would be able to trade 1 contract $10,000 x 1% = $100 maximum risk
Like any profession, you need to be prepared to take on the markets in a structured and
methodical manner. If you study the above principles, you will better understand overall market
behavior and you will be equipped to begin to consistently benefit from the great opportunities
that exist each day in the markets.

Platform:
As you develop your trading skills, I suggest that you use a professional trading platform that will
allow you to trade directly from the charts and will allow you to trade in simulation mode as well

WWW.TRADERSWORLD.COM June/July/August 2017 87


as to execute trades in your live futures account. As with any skill, the more that you practice,
the better you get at it. It is important to develop your skills regarding the proper use of your
trading platform while in simulation mode so as to minimize trading errors after you are trading
your actual trading account.
Trading in simulation mode will help you to develop your confidence and an overall methodology
that fits your personality.

Developing a Belief in Your Approach and Overcoming Fear:


Most traders will develop fear as they trade due to a history of losses. Like any fear, the way to
overcome it is to face fear head on and continue to do what you fear the most. An advantage
of having a trading platform that provides for simulation is that you will be able to trade in
simulation mode, as in our example above to build a plan with a positive expectancy and thereby
develop greater confidence in your approach to trading. As you trade in simulation mode,
develop a set of notes that will act as the beginning of your trading plan. Trade in simulation
mode until you have mastered the use of the trading platform you have chosen. As you trade
in simulation mode, practice developing the discipline needed to execute your trading plan.
Through repetition, you will begin to develop into a polished and profitable trader.

Please let us know if you need any help in developing your approach to profitable trading. Send
an e-mail to support@navitrader.com with any questions and visit our website at www.navitrader.
com

If you have any questions on the material in this publication, please send an e-mail to

support@navitrader.com www.navitrader.com

Contact Information:
Steve Wheeler
steve@navitrader.com
www.navitrader.com
800 987 6269
Skype navitrader.steve

RISK WARNINGS: Trading futures and foreign exchange on margin carries a high level of
risk, and may not be suitable for all investors. Before deciding to trade, you should carefully
consider your monetary objectives, level of experience, and risk tolerance. The possibility exists
that you could sustain a loss of some or all of your deposited funds and therefore you should
not speculate with capital that you cannot afford to lose. You should be aware of all the risks
associated with trading and seek advice from an independent advisor if you have any doubts.
Trading involves high risk and you can lose a lot of money. Trading stocks, options, ETFs,
futures and foreign exchange (FOREX) carries a high level of risk, and may not be suitable for
all investors. *HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS,
SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY
WWW.TRADERSWORLD.COM June/July/August 2017 88
ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN
FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE
RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING
PROGRAM. Past returns are not indicative of future results. NaviTrader, Inc. assumes no
responsibility for errors, inaccuracies or omissions in these materials. No prorating or refunds.
See website for terms and conditions.CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED
PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE
RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE
TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED
FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY
ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT
ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

GOVERNMENT REGULATIONS REQUIRE DISCLOSURE OF THE FACT THAT WHILE THESE


METHODS MAY HAVE WORKED IN THE PAST, PAST RESULTS ARE NOT NECESSARILY INDICATIVE
OF FUTURE RESULTS. WHILE THERE IS A POTENTIAL FOR PROFITS THERE IS ALSO A RISK
OF LOSS. A LOSS INCURRED IN CONNECTION WITH TRADING FUTURES CONTRACTS CAN BE
SIGNIFICANT. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING
IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION SINCE ALL SPECULATIVE
TRADING IS INHERENTLY RISKY AND SHOULD ONLY BE UNDERTAKEN BY INDIVIDUALS WITH
ADEQUATE RISK CAPITAL.

ANY ADVISORY OR SIGNAL GENERATED BY NAVITRADER,INC IS PROVIDED FOR EDUCATIONAL


PURPOSES ONLY. ANY TRADES PLACED UPON RELIANCE ON NAVITRADER,INC SYSTEMS
ARE TAKEN AT YOUR OWN RISK. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE
RESULTS. WHILE THERE IS GREAT POTENTIAL FOR REWARD TRADING COMMODITY
FUTURES, THERE IS ALSO SUBSTANTIAL RISK OF LOSS IN ALL TRADING. YOU MUST DECIDE
YOUR OWN SUITABILITY TO TRADE OR NOT TRADE. FUTURES, FOREX, STOCKS, OPTIONS
TRADING RESULTS CAN NEVER BE GUARANTEED. THIS IS NOT AN OFFER TO BUY OR SELL
FUTURES OR COMMODITY INTERESTS.

WWW.TRADERSWORLD.COM June/July/August 2017 89


Right on Time
By Rick Versteeg

Is it really possible? To be right and predict on time what (stock) markets will do at the
predicted time before it happens? Will the trend be Up or Down, that is the question.

Actually, the only thing a (day)trader needs to know is if the TREND for the next day will be
up or down. To be right on time.

Before rejecting this possibility, look at what Martin Armstrong accomplishes on a larger
time scale.

After years of research and developing proprietary software I can confirm it is possible with
a high hit ratio. Larger time scales are very interesting for institutions like pension funds,
but traders need a very short time frame. For this purpose we will discuss DeLorean that
forecasts the opening trend of the next day.

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This is where our Time Patterns and Time Waves come in to accomplish the job. In this
article I will elaborate on Time waves, so please join me and step into our time machine to
travel to the future and back. Open your minds and see what happens.

Time Patterns and Time Waves


Coming from Elliott Wave, mastering it from 1987 since and having incorporated Prognosis
Software Development to launch one of the first automatic Elliott Wave counts called
ELWAVE, It was crystal clear that not only price waves are fractal, but also Time Waves.
Actually in fact all things are fractal in live. Order in what seems to be complete chaos.
Consequently, where price waves build Elliott Wave Patterns, Time Waves in different
degrees from small to large, do build Time Patterns.

Where larger Time Patterns show months or years of bull and bear markets to be expected
in the future (and in line with the past), smaller time waves show the expected trend for
shorter periods even predicting the opening of the next day, higher or lower.

Obviously the approach had to be different from the usual Time Cycles which exist for a long
time and are mostly fixed, repetitive cycles which have been found empirically. Therefore
our Time Waves are dynamic as well as fractal, where smaller waves build the larger ones.
Also the driving force should be energy the way it travels, changes direction and interacts.
For this purpose one needs to apply physics to devise a time model, a very complex
quantitative approach in line with quantum mechanics and classical physics in order to
assess the force field at work according to the underlying model.

This means it is a pure quantitative approach that has been tested for years to determine
its accuracy. Back in 2014 we had completed the larger time frames, now very short trends
have been tested and launched. One can imagine that I cannot disclose more information
about our proprietary model and software.

Back to Bull market prediction in 2014


First we go back in time. In an article published by Tradersworld we showed a 3-wave
pattern from 2014 to 2016, predicting a rise of around 20% based on similarity of patterns
in the past. We knew already it would be a bull market, although not one of the strongest
based on history and the looks of the pattern.

In the following picture we show that the Dow Jones has risen from around 15000 to 18000
during the period 2014-16, therewith in line with prediction. Remember, Time Patterns on
this scale predict the big picture.

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Figure 1: bull time pattern of 2014-2016 after the fact, 20% rise. Yellow, examples of 5 wave (3
up, 2 down) bull markets. Blue, similar pattern, meteric recovery 1987 and 2009. Red, corrective
period coming, Lime, prediction short bull similar to 2003.

In figure 1 you see in one picture how the period of 2014-16 developed after writing the article
as well as a predicted corrective period and similar shorter term bull market. Questions? please
let us or Tradersworld know.

Back to the future-DeLorean


Below we present our latest development and most accurate model called DeLorean,
specially made for traders.

What does it do exactly? Every month predictions of the opening for all trading days are
made in advance. It will be UP, DOWN or neutral (no forecast). This means that normally on
an UP prediction the market will more or less gap up or accelerate up from the opening. On
a DOWN prediction it will gap down or accelerate down.

In order to profit from the trend next day a trader needs to enter the market at the end of
the previous day of the forecasted trend and exit the next day at opening.

Currently predictions are offered on DAX and SPX, the latter to be released soon. Predictions
of DAX DeLorean have been sent to Tradersworld as of May 1st and of SPX DeLorean
beginning May 15th.

For May 2017 DAX DeLorean has now (may 26th) accumulated a profit of around 175
points and a hitratio of 78 to 89% depending on trading system in use. SPX has 4 out of 5
predictions correct and a total win of around 41 points. see http://www.aquilaesignal.com/
dax-delorean/ for both DAX and SPX

WWW.TRADERSWORLD.COM June/July/August 2017 92


Important to know is that for DAX one has to use for entry and exit European time, entry
at 21:55 CET and exit at 08:01 CET. Therefore, depending on time zone, American traders
have to trade during the night for exit. Luckily Interactive Brokers has a feature to schedule
trades with time condition, so specify date/time and sell or buy to make sure the trade will
be done automatically.

Look closer how...

Below we show an example of what happened 24th of April when the results of the french
elections would be discounted in the opening of DAX. Outcome was very insecure because
4 candidates were really close. Nevertheless DeLorean clearly predicted green lights for this
monday.

Figure 2: indicator coming from lows and green patterns on the 24th in the column on the right.
Result was +210 points at the opening and 390 at the end of the day when profit protection
was used and not yet hit. Also see the next day, declining indicator and red in column.
Depending on trading system March-April showed a profit of around 700 points and 85% hitratio.

WWW.TRADERSWORLD.COM June/July/August 2017 93


SPX DeLorean shows the same results as DAX, also in line with tested months since March
2017.

Figure 3: 5 predictions from May 15 on SPX are 80% correct with a total profit of 41 points,
entering at close of NYSE and exiting at open the next day. Relatively this is in line with beta tests
since beginning of March 2017.

One could say I do not trade overnight, because risk is higher. Absolutely right in theory, but
not if hitratio is very high for the direction of the trend. Actually in this system it is an advantage
with DAX that the exchange is closed and nobody can get in or out. This creates a sort of panic,
where the energy of the time waves are unleashed when the market opens. If time waves were
already heading down and still are at opening, everybody unsubconsciously runs for the exit.
There is not always an explanation in the news for price moves. Using the SPX dynamics are a
bit different, because it is almost open all night. Nevertheless, it works the same. Also there is
an advantage that when profits are already made, one can exit at external trading hours, or set
a stop to reduce losses.

With regard to SPX the ENTRY is made one day before at the closing bell of the NYSE (Dow jones
and SPX index) at 16:00 (4:00 PM) ET or just before, using the SPX mini future ES. The EXIT will
be at the opening bell of NYSE at 09:30 ET (AM).

Finally I have discovered the rhythm in time. Where Elliott Wave has no clue in knowing when
the next trend will start or in what direction (in view of the many Elliott alternatives), DeLorean
is crystal clear in its expectations.

www.aquilaesignal.com
info@aquilaesignal.com
facebook: Aquilaesignal
Here is a special coupon code giving Tradersworld readers only a 40% -->> giving only
Tradersworld readers a 40% discount. Coupon code: TWDeLSPX

WWW.TRADERSWORLD.COM June/July/August 2017 94


Is the GBP/USD at a Multi-Month Top?
By Jaime Johnson
NoBSFXTrading.com

Due to Brexit, the GBP/USD has been in the news and closely watched for at least the past year
or so. The question is what will the trend direction be for the next few months, if not the rest of
the year? In our opinion we are at or near a multi-month high.

In this article, we will discuss the reasoning and analysis behind a probable top. We are going
to look at pattern and momentum/oscillator position from the monthly time frame down to the
daily time frame to determine the trend direction of each time frame. While the bottom oscillator
used in the charts is a propriety oscillator to the Dynamic Trader software, any oscillator can
be used in which the bearish and bullish reversals of the oscillator (or highs and lows of the
oscillator) correlate relatively well with the swing highs and lows of the markets. The top
oscillator is a Slow Stochastic. This article was written and submitted on May 28, 2017.

Monthly Pattern and Momentum


Chart 1 is GBP/USD monthly data. The GBP/USD has been in a strong Bear trend off the July
2014 high and while this market has been in a shorter-term Bull Trend for the past several

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months, there has not been the initial signal the strong long term Bear trend has turned Bullish.
There are many factors supporting the assumption the strong Bear trend should continue very
likely to below the October 2016 low.

Firstly, the initial signal a Bear trend has turned Bullish is a trade above a minor swing high. The
minor swing high that must be exceeded in Chart 1 for the initial signal the long-term trend has
turned Bullish is the high of the week ending September 30, 2016. Without at least this swing
high exceeded, the long-term trend is still Bear.

Secondly, the rally off the October 2016 low has more corrective than impulsive characteristics.
We will focus more on this in the next section and in the weekly chart. If in fact the rally off the
Oct. low is corrective, once the corrective high is complete, a decline lasting several months
should follow eventually to below the Oct. 2016 low.

While at the time of this writing, May 28, 2017, there are a few more days left in May, the
monthly oscillators are Bear (the fast line is below the slow line) which means this market is in
a momentum position for a multi-month high and a multi-month high could be a corrective high.
Also, so far, this looks like it is going to be a reversal month. A bear reversal month is when
the monthly close is below the monthly open and below the prior months close. This is another
reversal signal. All factors are pointing to a multi-month high should be at or near completion,
potentially a corrective high off the Oct. 2016 low.

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Characteristics of Impulse Waves and Corrections
Before continuing with the market position, lets review the characteristics of impulsive waves
and corrections. My analysis is loosely based on the Elliott Wave Theory. The reason I use the
word loosely is while I use wave counts if applicable, I concentrate more on the characteristics
of a trading range. An impulsive wave usually unfolds in a non-overlapping fashion and usually
unfolds in the same direction of the main trend. Corrections usually unfold in an overlapping
wave pattern and in the opposite direction of the main trend. Getting into a trade at or near the
end of a correction, in the opposite direction of the correction, can be extremely profitable.

In Chart 1, take a look at the Nov. 2007 Jan. 2009 decline. It has a non-overlapping wave
pattern compared to the strong overlapping pattern of the Jan. 2009 July 2014 rally. The
Nov. 2007 Jan. 2009 decline has characteristics of an impulsive wave and the sideways to
up overlapping pattern of the Jan. 2009 July 2014 rally is characteristic of a correction. The
decline below the Jan. 2009 low confirmed the July 2014 corrective high.

Now take a look at Chart 2, GBP/USD weekly data. The rally off the Oct. 2016 low also has an
overlapping wave pattern characteristic of a correction. If it is a correction, once the corrective
high is complete, a decline to below the Oct. 2016 low should follow.

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Conditions are in Place for a Multi-Month Corrective High
Chart 2 shows a potential ABCDE or other complex corrective rally unfolding off the Oct.
2016 low. The ABCD labels are not important. The factors that are important are the monthly
oscillators are Bear, the weekly oscillators are Bear and the high of the week ending May 19 is
slightly below strong resistance, the 78.6% retracement of the Sept. Oct. 2016 decline. These
are all strong signals a high lasting several weeks should be near completion, if not already
complete at the high of the week ending May 19 and a high lasting several weeks may be a
multi-month corrective high.

Chart 3 is daily data from the March 14 low. A five-wave rally appears to be complete as of the
May 18 high. Ideally a Wave E of an ABCDE corrective rally should unfold in a five-wave pattern
and once the Wave 5 is complete, it is a strong possibility the Wave E and the corrective high
are complete. The May 26 decline below the May 12 potential Wave 4 of E swing low is the initial
signal a multi-week high is complete, the initial signal a Wave 5 high is complete and the initial
signal a corrective high off the Oct. 2016 low is complete. If it is not a corrective high but only
a Wave 5 high, there should be a decline to at least the 50%-61.8% retracement zone of the
March 14 May 18 rally.

Keep in mind, this article was written May 28, 2017 and you are probably reading this article
well past this date. So you already know if the Wave 5 high has been voided or the 50% -
61.8% retracement zone has been reached or there has been a strong decline supporting the

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assumption a potential Wave E corrective high is complete. If there has been a rally above the
May 18 high, it is very likely the immediate upside should be limited to the 78.6% retracement
of the Sept. Oct. 2016 decline before a high lasting several weeks or months is complete (see
Chart 2).

While May 18 is looking like at least a Wave 5 high, the daily oscillators are in the oversold zone,
a momentum signal a multi-day low should be near. An oscillator Bear Reversal (when the fast
line crosses below the slow line) above the oversold zone without the May 18 high exceeded
would be a further signal a multi-week Wave 5 high is complete and great opportunity to
consider short positions for a potential multi-week or month decline.

The EUR/USD is Also in the Position for a Top


While the GBP/USD and the EUR/USD dont always have the same pattern, they often tend to
trend together and as of the time of this writing, they are in similar positions. Chart 4 shows
weekly EUR/USD data and a probable Wave E corrective high at or near completion.

So, What Side of the Market Should You Be On?


While there are many global ramifications caused by the long term trend directions of the GBP/
USD and the EUR/USD (and its inverse Dollar), you may not have much interest in this if you
are a shorter term trader of these markets. So, please keep in mind, during a multi- month Bear
trend, there should be multi-day to multi-week corrective rallies to the Bear trend which can
also be taken advantage of in the lower degree time frames. So regardless of the direction or
time frame you choose to trade, always use objective trade entry strategies, always use stop-
losses, trade more than one unit and have exit strategies for each unit, use stop-loss adjustment
strategies, use a money management plan and most importantly, be disciplined enough to stick
to these trade strategies.

For education on practical trade strategies for every timeframe to take advantage of the
potential multi-month decline of the GBP/USD and for corrective rallies during this decline, check
out my NoBSFX Trading course (info below).

More Information as the Market Unfolds


With the GBP/USD, as well as any other market, more information is revealed on whether the
longer-term outlook is correct or not as the market unfolds. For continued analysis of the GBP/
USD as well as many more top Forex markets as they unfold and for further education on the
analysis used in this article, check out the NoBSFX Daily Reports and the NoBSFX Net Trend
Video Reports (info below).

Jaime Johnson is a full time trader and the author of the NoBSFX Trading Workshop, the
NoBSFX Daily Reports and the NoBSFX Net Trend Video Reports. For complete information
and to download his free e-book, go to www.nobsfx.com or send him an email at jaime@
nobsfxtrading.com.

WWW.TRADERSWORLD.COM June/July/August 2017 99


THE TREND IS YOUR FRIEND
By: Samuel Bassey, MBA

Trend trading in not a new phenomenon in finance; as a matter of fact many traders will indicate
that its the only type of profitable trading out there per se. Many traders today focus on seeing
how a trend develops before executing their trades. Using different time frames can be helpful
but that does not necessarily develop and/or enhance the trend of a trade. The whole clich
saying The Trend Is Our Friend can be evident in an individuals trading style, and many will
probably say the saying is true in its intent, but lets seek what the real perspective is when
trend trading in the global markets?

Trend trading whole analysis, is trying to seek out big breakouts or moves in a particular
direction. The trend can have various price points and intervals, but what it is trying to cultivate
is a distinct move in which the trader can be profitable, or he/she can lose enormous amounts
of money (depending if the trade) turns against the individual. The trend can also be the
formidable direction of the pricing of an asset. If the price of an asset stipulates in a certain
direction, then the trend can be presented, as long as the trend is going into the direction of
indicative course.
A trend does not last forever but can be sustained in a certain direction for a long period of time
or in a short period of order. If trends are heading toward a certain direction it makes no sense
for an individual to do otherwise; unless other indicators have directed the markets to go to
another direction, then the person if foreseeable can evaluate another strategy. An individual
placing a trade in the opposite direction of a trend can really constitute a big mistake, and these
mistakes can have major impacts in profitability. Seeking the direction of a trend is important
because the trend may be able to inform the trader which position to take, when he/she is
pursing to execute the specific trade. The trend allows the trader to attain an early visual or
hindsight on how the trade is going to end or may not end. The trend is not the end all and be
all, but it definitely helps, it does not guarantee success in trading, obviously other methods are
taken into consideration while trying to be successful in trading financial markets.

Trends are subjected to be applied in most financial global markets, and assist in directional
movements of these markets... As long as movements in price action and directional path are
instituted, a trend will be suited in the analysis of a trade. Volume is a key indicator in trend
trading, because volume can assist in letting the trader know how the direction of a trade will
turn out and the volatility of the trade being constituted. The volatility of a trade in a certain
trend or direction is important in guiding the trader in positioning his/herself. The manner in
which the trader uses this positioning is entirely up to him or her, but volatility can allow the
trader to attain more profits than usual because high volatility can provide high profitability,
but also on the flip side volatility can also present enormous downside and losses, if stop losses
or some sort of risk management mechanism is not placed. This is entirely in the hands of the
trader and what or how their trading style in performed in how they trade.
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Trends present many opportunities for serious traders; the trend can provide profit abilities that
are highly abnormal, because of the way the direction a trade is headed, whether in the stock
markets, futures, commodities, and currency markets; directional trading (trend trading) can
yield major results for a trader, if he/she knows what they are doing. A trend if not utilized the
right way can also be the pitfalls for a trader, such as disastrous signals; for example false
breakouts, fake outs and other delusional tricks used by experienced traders on systemic
charts, which can cause a novice trader headaches, confusion and heartache; especially if he/
she does not know what they are doing, when trading certain kinds of trends.

As individuals scope out a trend in any market, different elements or indicators need to be noted
and observed. Is the trend going to last? How long is the trend? And is this a real trend or a
fakeout? All these questions are brought about and need to be on the radar of traders because
not knowing the answers to some of these questions can bring about many key problems for
traders and how they will be able to move forward, succeeding in trend directional trading.
Being able to see if the trend is downward or if the trend is going upward, is very important in
visualizing success in the markets one is trading.

Enhancing the visuals and understanding how the trend will play out in the end of the trading
day, is also an important step. As one can visual the direction of how the market is going, one
will be able to see exactly how to pursue the trade and stake out the profits.Visualizing the
trend, the trader will be able to accept various scenarios that may come about if the trade goes
against them, and what risk level they want to conform to, in order to shorten damages that
may have occurred by the impunity of the trade. If a trader can surely visualize how the trend
will be projected, then the trader will be able to monitor necessary steps that are needed to
be taken to make sure the trade goes in his/her direction; this may be because of how he/she
visualized the outcome. If the trader can stake out the direction of the trend, it is certainly true
that the trader will be able to perceive how everything will play out, whether its in or out of his/
her favor, when in trading. SB

About The Writer:

Samuel Bassey has an MBA degree., He is into financial trading and global trading markets.
He is also a keen real estate investor; along with his other accolades, such as being an
entrepreneur, investor, writer, columnist, consultant and all around talented guy.

He is the founder and publisher of the economic & financial blog website
EconomicandFinanceReport.com,which has a Youtube Channel EFR.TV and has a monthly
podcast show entitled, The EFR Podcast; which may be listened to @ www.Soundcloud.com/
Economic-FinanceReport and EconomicandFinanceReport.com

Sammy Bassey, MBA aka Businessman Bassey or Financier Bassey, has a real estate
website that covers all aspects of real estate buying, selling,and investing, entitled www.

WWW.TRADERSWORLD.COM June/July/August 2017 101


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The Golden Rule? Not So Fast!
By Eric S. Hadik

Golden Relationships

To listen to many traders, there is one sure-fire event that triggers a run-up in gold prices

Inflation!

No, wait

Its geopolitical upheaval.

Of course, when neither of those work

Its most certainly a diving Dollar.

What? You say none of those supported gold this time?

Well, thats because I misspoke

The undisputed trigger for a rally in gold is most certainly a sell-off in stocks without a doubt.

Unless that is deemed deflationary and ends up suppressing gold prices?

While it might be embellished a bit, the preceding is representative of ongoing opinions &
observations from various gold analysts & purveyors. Some will cite each one of those factors
to convince investors that gold is going to the moon tomorrow! But, are any of those factors
worth their weight in gold?!?

To be fair, each of those factors has - at one time or another in recent history - had a bullish
impact on gold.

And, to be just as fair, each of those factors has - at one time or another in recent history - had
a bearish impact on gold.

So, where does that leave a trader?

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Focal Points

For starters, it should illustrate that not one of those correlations - in and of itself - is
consistently reliable. At times they work and at times they dont. The primary reason has to
do with focus the focus of a majority of traders who happen to be driving the price of gold at
any point in time. You could also - in that previous sentence - substitute the word worry or
concern for focus (the worry of a majority of traders).

This is where a critical trading axiom comes into play. Before delving into that, lets look at a
current example of golds confusing correlation to the US Dollar

Recent months (and years) have seen a growing focus (worry) on many things Euro. The
snowball began down the hill with Greece in 2014 (even though it had started several years
earlier). When that subsided, there was an eerie calm until June 2016 - when the Brexit vote
stunned investors (take note of Golds rally into & through the Brexit vote). All of that set the
stage for early-2017

In recent weeks, the prevailing focus again returned to Europe for diverse reasons - including
the UK (and Prime Minister Mays move toward Brexit), Germany (Angela Merkels meeting with
Trump & her impending re-election campaign), NATO & France (upcoming election).

As a result, the Dollar/Gold/Euro relationship has provided yet another example of why NOT to
rely on one hard-and-fast correlation (when Dollar goes up, gold goes down) when viewing
these markets. For those that insist that gold goes up when the Dollar goes down - and
vice-versa - lets take a quick look at the price action of the past three months & see if the
aforementioned assumption (of a consistent & reliable Dollar/Gold inverse relationship) is
accurate or even close

In mid-Jan. 17, Gold set a 2--4 week peak and worked lower into Jan. 27th.

At the same time, the Dollar Index also sold off - from mid-Jan. into Jan. 26th both working
lower in tandem, over a ~2-week period.

After setting its lowest daily close on Jan. 27th, Gold rallied for 4 weeks - into the week of Feb.
27--March 3rd.

After setting its lowest daily close on Jan. 31st, the Dollar Index rallied for 4 weeks - into the
week of Feb. 27--March 3rd both rallying in tandem, over a ~4-week period.

After peaking on Feb. 27--March 3rd, Gold pulled back into March 10th.

After peaking on Feb. 27--March 3rd, the Dollar Index pulled back into March 10th both

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declining for 7--10 days.

For the next two weeks, the Dollar Index & Gold traded inversely - with Gold rallying while the
Dollar declined. Of that 8--9 week period from mid-January into mid-March, that 2-week period
in March was the only time this foolproof (inverse) correlation worked.

From late-March into mid-April, Gold experienced a sizeable, ~2-week advance - nearly
matching the magnitude of its preceding advance (wave equivalence).

From late-March into mid-April, the Dollar Index experienced a sizeable, ~2-week advance -
nearly matching the magnitude of its preceding advance (wave equivalence) both advancing
together and in similar wave structure as each other, over a ~2-week period.

The Dollar turned down a few days sooner but, since mid-April

-- Gold has dropped for nearly 2 weeks.

-- The US Dollar has dropped for nearly 2 weeks again working lower in tandem, over a
roughly 2-week period.

Out of 14--15 weeks, since mid-January, only about 3 of those weeks have traded in a textbook
Dollar up/gold down or Dollar down/gold up inverse correlation. 10--12 of those weeks have
not.

Is that really the type of correlation that Gold traders should be using? I would argue: No!

If you want to really observe the futility of that correlation, look at side-by-side charts of Silver &
the Dollar Index since Feb. 1, 2017 (see diagrams 1 & 2).

Here is a brief, general synopsis of Silver & Dollar Index action during that period of time:

Both up into late-Feb.

Both down into mid-March (Dollar continued down into late-March).

Both up into second week of April.

Both down since then.

As of todays close (4/26/17), Silver is ~0.5% below its Feb. 1st close.

As of todays close (4/26/17), DXM is ~0.5% below its Feb. 1st close.

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But didnt someone say that is impossible?!? Gold & Silver cant possibly go down in tandem
with the US Dollar!

Or, can they?!?

The key to understanding this is rooted in a simple but revealing trading axiom - Hadiks Axiom
of Market Correlation (see Tech Tip Reference Library for this and other axioms & indicators):

Markets only follow other markets when the lead market is going parabolic or is in an extreme
phase. Also, correlations are only effective when you can be CERTAIN of the current focus of
traders.

Breaking that down into its two components

1 - Each market has its own myriad of factors & fundamentals influencing it every day. Often,
those more-specific factors will have a greater impact than a broader market-to-market
correlation. For instance, the US Dollar could be dropping, which should increase the value or
perceived value of most commodities (price inflation), including petroleum.

However, if the latest report shows a glut of oil, crude could easily plummet along with a diving
Dollar. The broader correlation (diving Dollar/commodity inflation) is superseded by the more
specific fundamental (increased supply suppresses oil price).

The only exception is on the fringes If the Dollar were accelerating lower and breaking to new
30 or 40-year lows, that would produce a scenario where across-the-board inflationary moves
could be seen in commodities since the Dollar is in an extreme phase (see Axiom).

2 - With regard to traders focus, the second sentence in that Axiom, every day can have a
different driving dynamic. On one day, a positive economic report could drive stocks higher (on
bullish economic expectations) and bonds lower (on higher interest rate expectations). Stocks
up, bonds down. On the next day, bonds could be dropping on escalating commodity inflation
(prices of goods heading higher) and stocks could follow them lower. Bonds down, stocks down.

The lead market - the one that is garnering the greatest focus and then impacting all the others
- shifts from week to week & day to day. As a result, the intermarket correlations also shift -
often 180 degrees in a matter of days.

In the recent case involving gold & the Dollar, a large part of the traders focus has been on
Europe and potential challenges to their economic system & union. When anxiety is high, the
Euro drops as the Dollar & gold rally. When anxiety is placated, the Euro rallies as the Dollar &
gold decline.

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So, for the majority of the past month and the majority of 2017, the US Dollar & gold (and
silver) have moved in tandem, far more than they have moved in opposition all three of them
in opposition to moves in the Euro. That is likely to stretch into early-May when gold & silver are
expected to accelerate lower - into an important cycle low (at which time silver could perpetuate
a unique Gann-related principle in its trading).

So, what is a trader to do with this?

In this case, it is more of what a trader should not do with this Do not get married to certain
intermarket correlations and fail to perceive what a market is telling you. A perfect example is
with the Dollar, gold & silver

The Dollar remains weak and is projecting another likely spike low in the near-term. At almost
the exact same time, silver just triggered a 2--3 week sell signal (weekly 2 Close Reversal
and weekly Turn-Key Reversal signals) on April 21st. Two days before (4/19/17 Alert), gold
projected a sharp 2--3 week drop - from ~1290 to ~1225/GCM on its ultimate way to even
lower prices in May & June.

Could the Dollar, gold & silver trade in sync some more? It is quite possible at least until
the primary focus turns away from Europe & the Euro (likely occurring after Frances runoff
election). However, the magnitude of the comparative moves is likely to be different as the
Dollar completes a potential bottoming process even as gold & silver are projected to set an
intervening low.

There is certainly a LOT more to this. A trading axiom is simply that - an axiom. It is a principle
to follow and to integrate into an overall trading strategy. But that is just a starting point a
foundation on which a reliable trading strategy should be built. It should not be traded on, in and
of itself.

With cycles & intriguing technical indicators already portending some surprising moves in
metals, currencies & equities - in May & June - this and other axioms provide a critical base for
developing a corresponding approach for these kinds of opportunities.

Eric S. Hadik is President of INSIIDE Track Trading and can be reached via www.insiidetrack.
com. More information on the 40-Year Cycle can be found at www.40YearCycle.com and on
the 17-Year Cycle at www.17YearCycle.com.

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Day Trading in Todays
Higher Risk Markets
By Mohan

Many years ago, I gained popularity in the trading community when I began my newsletter
called The Daily Directional Forecast (DDF) in 2001.

This newsletter was unique in that for the first time in trading history, I called the next day
direction of the market, in advance of the opening, with an incredible 80%+ accuracy.

At that time, and continuing today, many so-called pundits said it was impossible to know where
the market will be each day, but I was able to successfully prove that theory wrong for 14 years
of publishing the DDF.

The underlying theory of The Daily Directional Forecast was that the markets are rigged by
special interests, including the Federal Reserve and the Central banks around the world. In
addition to that you have what are called algorithm predators, and other big league operations,
that manipulate the markets using sophisticated programs.

At the peak of the newsletters popularity, we had over 6,000 subscribers and sold out live
seminars in the US. At one seminar in Boca Raton, Florida we had over 320 traders attend and
many of whom were floor traders from Chicago, brokers along with large 50-100 lot traders.

Here is a photo of me presenting at that seminar:

During the period of 2001-2004, interest in the understanding of market rigging by the central
banks was starting to cause a stir. I continued to describe to traders, very specifically, how one
could see and indeed predict price movements based on knowledge and understanding of the
rigging operations being conducted.

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During the period of 2004-2008 when market rigging got really entrenched I was focused on
showing traders how they could be successful trading in spite of the rigging operations by
training through my Mohans Precision Trading Services.

MARKET RIGGING IS HERE TO STAY NOW AS A REGULAR PART OF THE TRADING SESSION
In todays modern trading environment you hear practically everyone talking about market
manipulation and calling out the Federal Reserve for it. This includes big billion-dollar hedge
fund managers, popular financial commentators and traders. It is now accepted as common
knowledge, but where were all these commentators back in 2001-2003? I felt like a lone wolf,
calling out the riggers publicly and took a lot of heat for it.

Recently, the Commodity Futures Commission instigated Rule 565 which specifically punishes
with fines those who break the rules set out to prevent price manipulation (known as spoofing),
market rigging and algorithm predatory efforts. It is also stated in the rule to include, amazingly,
even Central Banks.

But has market rigging/manipulation stopped?

Where are all the notices about violation of this Rule 565 with the violators exposed and fined?
Its rather hard to find any reports on this since this rule has been implemented.

HOW A TRADER CAN BE SUCCESSFUL IN SPITE OF THE INTRADAY RIGGING OPERATIONS


Can a trader still make winning trades in spite of the rigging forces against him or her?
The first step is to understand how the rigging is being done and the underlying market force of
the bias.

Identifying the market bias in terms of different levels of view can be very helpful. I call these:
1) The side walk view of the market
2) The helicopter view
3) The airplane view

We all know how a city street looks different from these different altitudes- from standing right
on the sidewalk to being above the city in a helicopter and flying into a city from a jet, perhaps
coming back from a trip.

The side walk view of the market bias is achieved by learning to read what I call -The High 5.
This is the Down Jones Industrial average, the Nasdaq 100, the Transportation index and the
Advance/Decline ratio. Learning how to read these and correlate them is the first step for US
stock index futures traders. Without knowing the High 5, you are not truly looking at the market
bias. Below is a screen shot of my High 5 shown along with the key futures contracts as well
such as Crude Oil and Gold.

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I would like to show you a detailed Free Report on how to read and correlate the High 5 into
your US stock index futures trading. It is called How To Read The Market Like A Book and can be
seen on my blog site at www.daytradersaction.com

For day trading the stock indexes it is also important to understand the reading of the higher
time-frame charts. I consider these to be the 5 minute chart, 13 minute, 30 minute, 60 and
135 minute chart. You must know what is going on with the higher time-frames while you are
scalping or micro scalping the lower-time frames. It will help keep you on the right side by
viewing things from a helicopter view.

The airplane view of the markets is seen by understanding the Volume Weighting of Price levels,
known as the VWOP, along with calculating the average volume ratios over a 4 day periods, put/
call ratios and daily key, higher-moving averages.

If all this sounds a bit complex it is at first, but with time and practice you can learn it.
However, you can take the easier route and let me do all the work for you and give you my
analysis while I make live mini Nasdaq futures trades in my Day Traders Action live trading
room. Visit my blog at www.daytradersaction.com to learn more.

Its hard work in the room but we have a lot of fun too scalping away at the markets each day.
Come join us and begin your advanced trading education. Odds are, you will learn more about
the US stock market and futures indexes in 2 days in my room then you will in 2 years searching

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all over the web.

A NEW, HISTORIC PRECENDENT- MY BOOMERANG DAY TRADER


SOFTWARE

If you have a deep thirst for trading and learning about the markets I invite you to
explore my Mohans Precision Trading Services, including my well known Boomerang Day
Trader software.

Boomerang Day Trader is the first day-trading software in the history of the markets that
Guarantees 90% winning trades following the simple method/rules that I teach for using the
software. Our more than one thousand users tell me, daily in their emails, that trading has never
been easier and more profitable.

Do you often ask yourself:

- How can I simplify my trading?


- Is there a way to consolidate all of the markets information into an easy to read method
where I can get steady, winning trades?

I am proud to say that my Boomerang Day Trader software can help you there.

Common sense tells us that the trading system should be simple to understand and use.
Another pit fall of new traders is that they may become enamored by an overly fancy or complex
trading system but in the live day trading environment the system may not be useful.
I have heard this complaint a lot over my 16 years in the industry working with close to 50,000
traders through my live seminars/webinars, blogs, and live trading room.
If you cannot execute the system relatively easily in the fast, live environment..then what good
is it really?

Fancy technical looking indicators and highly intellectual sounding theory may seem like what
you are looking for, however when the rubber meets the road (IE: when you start trading the
system live with real money) you may become confused and not be able to manage the trades
effectively.

So from my experience the most important two elements are:

1) A relatively easy and simple system to execute whose signals and trade setups can be
understood clearly in the fast market environment we see each day in futures trading.

2) Verifiable, proven results that you can build on to make $150,000 or more a year (anything
less seems like too little for the difficult and risky business of futures day trading)

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Please take a look at these 2 charts below. The top one is a plain mini Nasdaq (symbol: NQ)
futures chart using a 450 tick setting. I am using the NinjaTrader software and powering the
charts with eSignal data feed.

I consider the mini Nasdaq (NQ) to be one of the best day trading contracts for the US stock
indexes which I trade every day in front of a lot of experienced traders in my live trading room
www.daytradersaction.com

Now take a look at my Boomerang Day Trader chart below for the exact same period in the
markets.

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What a difference in clarity the Boomerang chart has compared to the first, plain chart shown
above.

Now for the best part.lets do the math.

* Following the simple Boomerang Day Trader method/rules there were 3 winning trades in a
row during this period.

*According to our systems crystal clear entry, stop and exit rules these 3 trades would have
produced +9 NQ points.

* Each point with 1 contract on the NQ is worth $20. Nine (9) NQ points therefore would be
$180$ minus commission which on 1 contract X 3 trades would be about $20. Total would be
around + $160 net gain.

*On a small, what I call a Blue Collar Working Traders account ($5-8K trading 4 NQ contracts)
this would have produced around $640 after commission. These 3 trades occurred in just a few
hours of the trading day.

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On this given trading session there were 2 additional winning trade setups earlier with 100%
winning trade setups creating close to an up to potential +$1000 day for a Blue Collar Working
Trader account.

* Now always remember that futures trading is very risky and only risk capital should be
employed.

Using the same chart above I have marked squares over the active area where the Boomerang
trade setups occurred and I will explain the exact trade signals below.

1) Trade setup #1 on the left side boxed area of the chart shows a Green Arrow which is the
opening of the Trade Channel. On the 2nd candle tapped the Bollinger Band after the Trade
Channel alert candle closed. The Bollinger Bands are the thin, white bands on the outside of the
prices. A tap on the Bollinger Band is required by the rules to confirm the trade.

2) After the above setup occurs (notice: it is the same setup for each of the three trades shown)

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the Boomerang trade method is to take the next pullback to the Blue Dot (if a buy) and the
Yellow dot (if a sell).
3) An automatic 5 point stop is placed and a 3 point gain with one click using NinjaTrader trade
brackets

4) Each of the 3 trades followed this simple method and entry/stop rule and were successful
trade setups for +3 NQ points each.

Boomerang Day Trader continues to be an extremely popular day trading software after being
available on the market for over 7 years. No other day trading software in the industry has ever
Guaranteed 90% winning trade setups like Boomerang does. It is an industry first.

There are close to 1000 + traders around the globe taking these and similar correct trade
signals on Boomerang. You can access live webinars that I personally conduct on Boomerang
showing the exact method/rules on hundreds of charts at www.boomerangtrader.com

After over 26 years of trading and making it somewhat of a hobby to read and study all the
trading methods, books and other elements out there, I was not satisfied with what I saw.
So I went to work over a 5 year period with the goal of making the easiest to understand,
yet most profitable day trading software ever seen. It was a daunting task, but I finally
released Boomerang Day Trader in 2009. In late the late part of 2014, after more research on
the original version, I developed Ultra Boomerang Day Trader and it is amazing.
We are getting regular, steady 90%+ winning trade signals from the software on mini Nasdaq,
Crude oil and others. Using our simple method and just 2 rules you can achieve a very high
degree of winning day trades by aligning yourself with the software as thousands around the
globe have done that. Crude Oil is particularly a smooth contract to trade with Boomerang and I
invite you to watch the short video below where I review a recent 3 day period using Boomerang
Day Trader on Crude oil. The software produced over 98% winning trade signals in an easy to
trade method. www.boomerangdaytrader.com to see those videos
If you are currently in a losing cycle or a break even cycle and want to simplify your trading to
make it more profitable I designed Boomerang Day Trader for you. Boomerang Day Trader is
the only day-trading software in the history of the markets that Guarantees 90% winning
trades, following our simple method/rules. It is only $1195 and comes with a lifetime license
(used with NinjaTrader).

ABOUT THE AUTHOR

Mohan is a 25 year trading veteran and trading coach for over 14 years in the industry. He is
also the developer of Boomerang Day Trader, which is one of the top selling day trading software
on NinjaTrader. Boomerang is also the first day trading software to offer a 90% guaranteed
winning trade signals, creating an historical precedent in the industry.

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WD GANN & SUNSPOT CYCLES
By David Burton

WD Gann included sunspot cycles on some of his commodity charts, showing that cycles with
low sunspot numbers correspond with cooler weather and droughts and cycles with higher
sunspot cycles correspond with warmer weather and floods.

Although there are degrees of variation between locations, this correlation between sunspot
numbers and weather has been recognised for thousands of years and is discussed in numerous
texts, some going back 100s of years.

While there is a long list of authors, one of the books on Ganns reading list was by WT Foster, a
famous meteorologist, called SUNSPOTS and WEATHER. His system like all others was based
on astronomy not astrology, as he was another person who thought House wife astrology was
rubbish. Our changes of weather are based on changes of terrestrial magnetism. But these
changes of magnetism being due to certain planetary configurations which can be foretold with
as much certainty as the configuration themselves. Therefore the weather can be foretold with
as much certainty. To call this astrology is the height of the ridiculous.

Foster, the great meteorologist, had an understanding of the whole solar system as a vortex;
Figure 1 is a basic view of this, although not showing the elliptic, aphelion, apogee etc, or what
Gann calls the 4th demission.

Figure 1

Members of our solar system, the sun and all the planets knit together into a perfect whole by electro magnetic

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threads of force. All influence coming from these bodies enters the earth by its north magnetic pole as dynamic
electricity, and goes out by the south magnetic pole, generating a magnetic helix which runs from South Pole
to North Pole and spins the earth about its axis; Inigo Jones from Australia also discovered this point, as
discussed further below.

Its noted that WT Foster developed the most comprehensive system of long range forecasting of any man
in the world, taking in the 8 major planets as being held together in one grand network of electromagnetism.
Gann had his secret average of 8 and 6 planets, which he never sold, but I suspect it was similar and had
something to do with his spiral chart, the Serpent.

6 months before he died, Gann did write a booklet for some students on how he used the average cycles of
planets in combination and even this was only available for those who had completed his most expensive
course which cost the equivalent of a house in todays terms. He also said his true secrets were not for sale,
so you will never see these for sale anywhere - if they were somehow available for sale their value would be in
the hundreds of millions of dollars.

Another book on Ganns reading list was Flammarions book Popular Astronomy; the chapter Time of fall of
the planets on the Sun quotes the relative planetary fall times in days as shown in Figure 2.
Figure 2: Planetary fall times, after Flammarion

Mercury 15.55 days Jupiter 765.87


Venus 39.73 Saturn 1,902.03
Earth 64.57 Uranus 5,424.57
Mars 121.44 Neptune 10,628.73

Gann used squares of numbers as counts; he clearly had an understanding of the proportion of the distance
to squares. Gann had 16 planes on the cover of TTTTA, which I have written many articles on. Maybe the
Tunnel is the vortex? Now the square root of 32 (double 16), is 5.656856, which, when multiplied by the fall
of the planets, gives the exact days in a cycle; using Earth as an example, its fall (64.57) times the square root
of 32 (5.656856) gives earths precise cycle time - 365.2564 days.

Ganns averaging of planets has something to do with the 4th dimension, and understanding the 25,920 year
cycle would lead to closer understanding of the vortex of planets. Hes given a hint in the angles used in the
illustration on the front page of TTTTA, using 2 x 1 and 3 x 1 - the difference being 7.5 degrees.

48 x 7.5 = 360 degrees. The width of the Tunnel on the TTTTA cover is 24, half 48; 24 x 7.5 = 180 degrees.
If you really understand what the 180 degrees is, you will have the start to the understanding of the vortex .
no, not just oppositions, thats way too simple, thats house wife astrology - Im talking about real observation-
based science here - astronomy.

If you have his Ephemeris, you can see that in some cases he looks at a solar return date and does an
average of 6 or 8 planets then. For example, 1946 would be 14 years from 1932, 14 years is two 7- year

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cycles. He also did some planets averages when planets were direct or retrograde we dont know why and
he sometimes did them on dates of solar and lunar eclipses, but not all of them - so he must have a reason to
select certain ones, but these reasons clearly arent in his writings, or coded, but seem to be just in his memory
for safe keeping.

The private booklet explaining his methods to elite clients, mentioned above, was issued just
before he died in 1955, but no-one has seen a copy of this booklet in recent times. The hardest
thing to work out is his 4th dimension applied to markets; its not just some average of planets
cycles correlating with price as thats only 3 dimensional.

WT Foster mainly used Jupiter, Saturn and Uranus to forecast the sunspot cycles and using this
method, he and many other have come up with an average sunspot cycle of 11.1 years, which is
very close to the Jupiter cycle of 11.86 years.

AUSTRALIAN WEATHER PROPHET Inigo Jones


Figure 3: Inigo Jones

Long-term weather forecasting is extremely important in the rural industry, as having a road
map of what the future holds can reduce losses saving millions of dollars. Australias most
famous long-term weather forecaster was Inigo Jones (1872- 1954) who lived in Crohamhurst, a
hinterland town of Queenslands Sunshine Coast.

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Many older farmers have heard of or actually used Inigo Jones methods.

In 1874 his parents migrated to Queensland where his father designed roads and railways. At
age 11, Mr Jones obtained a scholarship to the prestigious Brisbane Grammar School. Interested
in astronomy and meteorology, he built an observatory at his parents Kangaroo Point home and
was a student member of the Royal Society of Queensland. In 1888, the Colonial Meteorologist,
Clement Wragge, persuaded Jones to serve a cadetship in his office rather than attend the
University of Sydney. When Wragge became interested in Edouard Bruckners investigation of the
changing levels of the Caspian Sea, comparing Bruckners 35-year rainfall cycle with the 11-year
sunspot cycle, Jones began to develop a special interest in long-range forecasting on the basis of
sunspots.

He believed that the four major planets of Jupiter, Saturn, Uranus and Neptune cause the
high and low sunspot cycles in Queensland and when the major cycle all come together at the
Eighteenth Hour of Right Ascension, this was a critical point leading to droughts, while at the
Sixth Hour of Right Ascension the expectation was for floods.

Jupiters orbit is 11.86 years, Saturn is 30 years, Uranus is 84 years and Neptune is 164 years:
Inigo Jones used these cycles and the Bruckner cycle of 35-36 years to predict the 1974 floods
- which occurred 20 years after his death - and the great drought of 1983 to 1993 which was 30
years after his death.

Low sunspot cycles cause droughts and bad business conditions, the low sunspots of 2008/09
correlated with Jupiter being at the critical drought point, and it will be again at this point in
2020. Saturn will be at this point in 2019.

Forward projections of sunspot activity to 2020 using these predictors is presented in Figure
4. One planet Inigo didnt use was Pluto and it reached the drought point in February 2017;
this planet take 246 years circle the sun, so it going to be there for a while. The obvious issue
here is that the last peak in sunspots was the lowest in 100 years, which means the effect of the
ensuing cyclic drought should be a lot worst due to not enough rain in the intervening sunspot
cycle 24 peak.

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Figure 4: Sunspot cycle prediction

In the bigger picture, high sunspot numbers give you a warmer climate and more rain, with the overall cycle
having a peak to peak periodicity of 1823 years. We are now going into lower sunspot cycle and colder climate.
In 1645 to 1715 we had a mini ice age due to low or no sunspots as time when the Thames was frozen over
and commuters of the day skated to work. The regularity of the sunspot cycles and its cycles within cycles
nature is shown in Figure 5.

Figure 5: Sunspot cycles since 1749

This sunspot cycle reflects the real global climate engine, not the rubbish you hear from governments who

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are simply the puppets of the Federal Reserve and the 13 richest families that own it: overall, the whole
cycle system actually takes 25,920 years to complete, so on what basis is this ignored completely while
governments, the UN, etc, trumpet that climate change can be modelled - and cause and effect settled - over a
tiny fraction of this - 20 years? Such government lies need to be relegated to the Fiction shelves and serious
questions asked over the motivation behind the whole propaganda effort behind the fact-free concept of
human-induced global warming.

Inigo Jones Theory

His theory is in effect that the whole solar system is simply a vast electromagnetic machine,
which is regulated by the magnetic fields of the planets; this applies to, among other things, the
seasons, so that if we know what the conditions were when the same planets stood in the same
relationship before, those same conditions will repeat whenever the planets are in the same
conjunction - it is simply a matter of having complete historical observational data and then
using that data as the basis of forecasts.

The great need is to have complete records, going back as far as possible as, the more data,
the more accurate the resulting forecast. Inigo Joness mentor Clement Lindley Wragge had
developed the hypothesis that the seasons were controlled by a cycle which combined that
identified by the Austrian scientist Bruckner, and the 11-year sunspot cycle. The Bruckner cycle
is 35 to 36 years or three Jupiter cycles.

If we go back to the rain maps that are supplied by Queensland Government at


https://www.longpaddock.qld.gov.au/products/australiasvariableclimate/index.html

you will see that 1982/83 was an extreme drought , and adding a Bruckner cycle gets us to
2017/18, 1983/84 was wet which cycles up to 2018/19, similarly 1984/85 and 1985/86 were
droughts, which implies major Australian droughts in 2019/20/21.

Lets look at other cycles as well; there was an extreme drought in 1935/36 and in 1936/37
in Western Australia, which the Uranus cycle repeats in 2019/2020 and 2020/21 all when low
sunspot cycles are expected. El Nino is also involved and appears in the similar cycles, as
shown in Figure 6

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Figure 6: El Nino cycle

CLIMATE CHANGE
Of course we have climate change, as the earth rotates a degree every 4 minutes, its warmer
during the day than at night, its warmer in summer than winter. The earth alone moves at 18
miles a second, would that cause wind do you think? The planets move closer and further away
from the sun and earth in their own cycles which have repeated over millions of years. Does it
make sense to you to only go back 10 years like these puppet politicians do and imply cause
and effect for global warming - and its all mans fault when the whole cycle takes 25,920 years
to complete? Governments have never fixed any problem they, and their co-conspirators in
the main stream media are the cause, not the answer, they all work for the Global Elite. Its
all about taxing the Your Straw man (look it up on internet). You have to ask yourself why
do the Greens have children, drive cars, fly, wear clothes, wear shoes, eat food, drinks, use
everything etc, all manufactured using the from nuclear-, coal- or gas-fired power stations if
they believe humans cause global warming? And if human consumption is also a huge great big
problem, why are we breeding? Its all just rubbish. Warming and cooling has only to do with
planetary movements, nothing else. Short warming trends reflect short term cycles, long term
trends are determined by long term planetary cycles.

The mini ice age predicted over the next 20 years due to low sunspots will cause millions of
deaths and crop failures. Governments around the world and the UN should be held accountable
for this and put in the dock charged with genocide for refusing to support and facilitate
sustainable (= fossil-fuel-driven) power supplies for the worlds poorer billions; Australia will also
see tragic effects through loss in production and destruction of livelihoods, increased poverty
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and lowering of the survival age; were closing viable, highly efficient base-load power suppliers
coal-fired power stations - and replacing them with hopelessly erratic, inefficient, vastly
expensive subsidized systems reliant on sunshine and breezes. People cant afford power now
so they wont have a hope of affording food or heating when the climate cycle turns to global
cooling which has already started (although dont expect governments, the UN or the media to
advise you of this fact). How will wind mills work if frozen? Governments only destroy the world,
and its all about money, something that doesnt actually exist.

History of Famines

https://en.wikipedia.org/wiki/List_of_famines
Between 108 BC and 1911 AD, there were no fewer than 1,828 major famines in China, or one
nearly every year in one or other province; however, the famines varied greatly in severity.
There were 95 famines in Britain during the Middle Ages. There was a 200 year drought between
800 AD and 1000 AD witch destroyed the MAYANS.

Another example of governments lies, I randomly looked at Sydney rainfall: the lowest rain fall
since 1858 was 1888, with 583 ml; next lowest was 1862 with 609, then 1941 with 680, 1968
with 624, 1957 with 690, 1980 with 736 and then 1936 with 769.
Read this link and you see that the government deleted the hottest day in Australia, all
governments are the same!!

http://jennifermarohasy.com/2017/02/australias-hottest-day-record-ever-deleted/
Keep in mind we only have 160 years of data, nothing that can show the full 25,920 year cycle,
but even this scant data shows it has been wetter ever since 1888: I wonder who gets the blame
for this trend? There were comparatively fewer humans on the planets and definitely no large-
scale manufacturing - must have been too many flatulent cows or something?

Gann went to India and would have had access to the Hindu rules for weather, we cannot see if
he applied these rules, but current Hindus use Sidereal Astrology for all aspects of astrology.
The Hindu observational records go back 1000s of years and they have many rules for weather.
The weather was the most important thing to forecast for the success of crops, meaning that like
any agrarian society, they lived and died by the weather, and in fact they have over 100 rules for
wet and dry periods.

Heres an example of one rule based on Hindu weather.


Reading some of my ancient text (300 B.C) from India, they start their last Sun/Jupiter Cycle
13th May 2012, and based on this cycle, this what they say for forthcoming crop production in
India:

- May 2016 to May 2017: good rainfall and crops would be sporadic
- May 2017 to May 2018: rainfall would be scanty

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- May 2018 to May 2019: abundant growth of all crops
- May 2019 to May 2020: all grains crops will suffer through poor seeds
- May 2020 to May 2021: growth of crops in some places and drought others
- May 2021 to May 2022: food grains will be plenty in some places and there will be shortages
and panic in others
- May 2022 to May 2023: good rainfall, abundance of crops

Some Hindu key forecasting variables for rain:

1) Rising of Venus
2) Rise of Jupiter
3) Saturn sets
4) Conjunction of Mercury/Venus in Rohini star
5) Sun entering Aardra star

They actually have 90 rules for rain and drought, all based on observations going back millennia;
by comparison, we know so little compared to the ancients.

David Burtons work

The author has been studying the methods of WD Gann and Inigo Jones since 1983. Gann also
studied sunspots cycles and the correlation between these and the movements of commodity
markets and deduced cause and effect hypotheses which have stood the test of time.
Gann also went to India with Sepharial, so must know more about Hindu astrology than he
ever publicly acknowledged. The author has been using the Hindu methods to forecast weather,
market movements and horse racing as written about in previous articles.
Mr Burton has spent the last year working on the only Pure Gann software in the world, and
stage one (of several planned) is nearly completed; next there will be additional stages, and
then the focus will be on weather and horse racing result forecasting programs over the next few
years.
www.wdganntrader.com
www.schoolofgann.com

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Reading Divergence with Support &
Resistance on the
Forex Market or e-Minis
By Gail Mercer
tradershelpdesk.com

Reading divergence with support and resistance on either the forex market or e-Minis allows
traders to decrease their risk and potentially expand their profits. Why? Because as most
traders know the market moves in waves. By following divergence (trend or hidden) with the
combination of support and resistance, the trader can read these waves and even identify when
to look at their higher timeframe for retracements.

Before looking at chart examples, lets define the types of divergence.

Trend Divergence
In an uptrend, trend divergence occurs when price is making higher highs but the oscillator
(in this case the TradersHelpDesk Stochastics) makes lower highs. For example, the 3-minute
Gold chart below identifies the trend divergence by plotting a magenta dot (TradersHelpDesk
Stochastic Divergence indicator) and is identified by the white lines.

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In a downtrend, trend divergence occurs when price is making lows but the oscillator makes
higher lows. In the 3-minute Crude chart below, the green dot indicates the trend divergence
(indicated by the white line on the Stochastics indicator).

Although some traders believe that trend divergence indicates a market reversal, it actually
reveals a test for support or resistance, which makes the two a very powerful combination. It is
the result of the test for support or resistance that will determine where the market is likely to
go.

Hidden Divergence
Hidden divergence on the highs occur when price makes a lower high but the oscillator makes
higher highs. Again, using the 3-minute Gold chart, price has formed a lower high but the
oscillator shows a higher high. This is a classic example of hidden divergence formed on a lower
high. Hidden divergence on the highs indicates that the market will typically have a substantial
move down.

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Hidden divergence on the lows occur when price is making higher lows and the oscillator
makes a lower low. Using the same 3-minute Crude chart, price has made a higher low yet the
Stochastics has formed a lower low. This is a classic example of hidden divergence on the lows.
When hidden divergence occurs on the low, then the market will typically move up substantially.

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Being able to read the divergences as explained above with support and resistance allows
traders to read the market waves and utilize a low risk high reward trading technique. Here
are two examples using the GBPJPY and e-Mini S&P 500.

Trading the Forex Market with Divergence and Support & Resistance
The 15-minute GBPJPY provided the perfect trade setup on Friday, May 5th. The blue plus sign
(+) is the average true range stop that is built-in to the TradersHelpDesk Trend ATR indicator.
The red and blue lines identify the anticipated range for the day. If price is trading above the
range, expect an uptrend and if price is trading below the red line, expect a downtrend. The
magenta dots indicate when trend divergence is identified using the TradersHelpDesk Stochastics
indicator.

Typical price behavior with the Trend ATR is that if the trend flips from red to blue (or vice
versa), expect price to retest the ATR (+) sign. In this example, price flips the ATR from red to
blue and even closes above the blue range line. This indicates the market may move up for the
day. However, a test is expected to ensure that support has formed.
The magenta dot identifies that trend divergence formed as price broke the blue line. Again,
confirmation that a test for support is needed. Price returns to ensure that the red line will
indeed act as support. The ATR is also plotting at the same level, which is further confirmation
that the line will act as support. As price tests the area, the Stochastics shows hidden
divergence on the lows (Point A). This is a very powerful setup as price should now move to the
upside.

An additional entry is formed after the second magenta dot when price comes back to test
the ATR and again forms hidden divergence (Point B), which also coincides where the trend
divergence formed, as well.
Two very powerful indications that the market would continue moving up. Since both entries
were right at the ATR, this provides a very low risk entry point for either trading the GBPJPY
forex market or binary options using Out of the Money strikes.

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Unfortunately, not every trade setup is this easy. Below is an example on the e-Mini S&P 500.
Although it also provided numerous trade entries, it is not as perfect as the example above.

Trading the e-Mini S&P 500 with Divergence and Support & Resistance
In this example, a 3-minute chart of the e-Mini S&P 500 has the same indicators plotted.
Although price is plotting above the blue line, the Trend ATR is plotting red and price is
testing the ATR (Point A). Looking at the Stochastics, hidden divergence has formed so price
should go down and does. At Point B, price has returned to test the ATR, yet again. Again,
hidden divergence forms but price does not take out the prior low. This typically indicates a
retracement is occurring on the higher timeframe.

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At Point C, price has managed to turn the ATR from blue to red but a line of white congestion
dots form. This indicates that price will return to the blue ATR to test for support. Although it
does not form support here, it does test the prior lows (Point D) and forms a stronger hidden
divergence to the upside. At Point E, price is again forming hidden divergence off the lows,
that failed to retest the low at Point D. Again, the combination of these points indicate that a
retracement has formed on the higher timeframe and the higher timeframe is seeking an area
that will support an upmove.
Price manages to flip the ATR to blue again, price breaks through the congestion dot, forms a
magenta dot indicating a test for support is needed, and then returns to test the ATR, forming
hidden divergence to the upside (Point F). Points G and H indicate that both price and the
Stochastics are moving in harmony so more upward movement is anticipated.
As shown below, the 12-minute chart was indeed seeking an area that would support price and

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found it at the line of white congestion dots. (The blue and red arrows line up the 3-minute
entries with the 12-minute chart.) By reading the different divergences that appeared on
the 3-minute in combination of the flipping from red to blue to red on the Trend ATR, it easily
identified that the trader needed to check his higher timeframe.

Since the trend divergence typically kicks off the hidden divergence sequence, in addition to the
charting indicators, the TradersHelpDesk Stochastic Divergence indicator has been specifically
designed for the TradeStation RadarScreen or the Multicharts Scanner window. This allows
traders to monitor multiple markets and timeframes within one window. Then it is simply a
matter of waiting for the test of support or resistance for entering a trade using a very low risk
entry.
To learn more about the TradersHelpDesk indicators discussed in this article visit our website at
www.TradersHelpDesk.com.

WWW.TRADERSWORLD.COM June/July/August 2017 131


Amazon Kindle Books
Gann Masters Course by Larry Jacobs $9.95
As you know, W.D. Gann was a legendary trader. Some say he amassed a
fortune in the the markets. He wrote several important books on trading as
well as a commodity trading course and a stock market trading course. He
charged $3000 to $5000 for the trading courses which included 6 months
of personal instruction by phone. The Gann Masters Trading Course to help
traders become successful.

A Unique Approach to Forecasting by Ivan Sargent $32.95


This book is possibly one of most advanced books in technical analysis you will
read regarding price and time reversals. Knowing the Price and time of a stocks
reversal point is undeniably an important element for to successful trading.
Unlike most trading books which use indicators, oscillators, and basic geometry
to forecast the markets outcome; this technique uses a series of lines which
when accurately placed can deliver reversal points with amazing accuracy.
Trend lines, retracements lines, channels, fan lines, pivot points etc, all inspect a stock chart
from the outside, which is more or less the obvious point of view.

Patterns and Ellipses by Larry Jacobs $9.99


This book concerns itself with a highly technical subject, the subject of
technical analysis of the financial market. This book specifically deals with
ellipses and pattern formations used for trading the markets. It also covers
many other technical analysis tools that can be used effectively by the trader.

Ganns Master Charts Unveiled by Larry Jacobs $9.99


We know that Gann used the Pythagorean Square because he was found
carrying it with him into the trading pit all the time. This square was hidden in
the palm of his hand. How did he use this square? Why did he not discuss the
use of this square in his courses? There is only one page covering the Square
of Nine in all of his books and courses. Was this square his most valuable tool?
These and all the other squares Gann used will be discussed in detail in this book with many
illustns and examples to prove how they work.

Gann Trade Real Time by Larry Jacobs $9.99


When you opened this book you took the one step that will help you learn how
to be successful at the most desirable, but hardest profession in the world. That
profession is real time trading. This book is not going to give you an instant
secret to day trading. It is going to give you the basics so that you might start
the path to understanding how the markets work both short term and long
term. You need to know and fully understand the markets and develop successful trading

WWW.TRADERSWORLD.COM June/July/August 2017 132


strategies to become successful at this endeavor.

Best Trading Strategies: Master Trading the Futures, Stocks,


ETFs, Forex and Option Markets $3.99
This is one of the most fascinating books that was ever written about trading
because it is written by over thirty expert traders. These traders have many
years of experience and they have learned how to turn technical analysis
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ever tried to trade the markets with technical analysis you would know what
I mean. These writers have some of the best trading strategies they use and
have the conviction and the discipline to act assertively and pull the buy or sell trigger
regardless of pressures they have against them. They have presented these strategies at the
Traders World Online Expo #14 in video presentations and in this book.

What sets these traders apart from other traders? Many think that beating the markets has
something to do with discovering and using some secret formula. The traders in this book
have the right attitude and many employ a combination of fundamental analysis, technical
analysis principles and formulas in their best trading strategies.

Trading is one of the best ways to make a lot of money in the world if one does it right. One
needs to find successful trading strategies and implement them in their own trading method.
The purpose of this book is to present to you the best trading strategies of these traders so
that you might be able to select those that fit you best and then implement them into your
own trading.

I wish to express my appreciation to all the writers in this book who made the book possible.
They have spent many hours of their time and hard work in writing their section of the book
and the putting together their video presentation for the online expo.

Finding Your Trading Method $3.99


Finding your trading method is the main problem you need to solve if you
want to become a successful trader. You may be asking yourself, can I find
my own trading method that will reflect my own personality toward trading?
For example, do you have the patience to sit in front of a computer and trade
all day? Do you prefer to swing trade from 3-5 days or do you like to hold
positions for weeks and even months? Every trader is different. You need to
find your own trading method.

Finding out your trading method is extremely important to produce a profitable benchmark
that can be replicated in your live account. Perhaps the best way to find a successful
trading method is to listen to many expert traders to understand what they have done
to be successful. The best way to do that is to listen to the Traders World Online Expos
presentations. This book duplicates what these experts have said in their presentations,
WWW.TRADERSWORLD.COM June/July/August 2017 133
which explains what they have done to find their own trading method.

If you have a trading method that gives you a predictable profit, then that type of objectivity
contributes to your trading edge. The problem with most traders is that being inconsistent
will never allow them to have an edge. After you find your trading method that you feel
comfortable with, you must have the following:

An overall plan to:


1) Set your rule set and plan and then stick with it in all of your trading.
2) To give you a trading plan for every day.

The trade plan then should:


1) Have an exact entry price
2) Have a stop price
3) Have a way to add positions
4) Tell you where to take profits
5) Have a way to protect your profits

By reviewing all the methods given in this book by the expert traders, it will give, you the
preliminary steps that you need to find your footing in finding your own trading method.

Reading this book and by seeing the actual recorded presentations on the Traders World
Online Expo site can act as a reference tool for selecting your method of trading, investment
strategies and tactics.

It took many of these expert traders in this book 15 30 years to finally come up and find
the answers to find their trading method to make consistent profit. Finding your trading
method could be then much easier when you read this book and incorporate the techniques
that best fit your personality and style from these traders. This book will enable you to that
fastest way to do that.

So if you want help to find your own trading method to be successful in the markets then
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Learn specific trading strategies to improve your trading, learn trading
ideas and tactics to be more profitable, better optimize your trading
system, find the fatal flaws in your trading, understand and use Elliott
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profitable, understand Mercury cycles in trading the S&P, get consistently
profitable trade setups, reduce risk and increase profits using volume,
detect and trade the hidden market cycles, short term trading by taking
the money and running, develop your mind for trading, overcoming Fear in
WWW.TRADERSWORLD.COM June/July/August 2017 134
Trading, trade with the smart money following volume, understand and use the Ultimate
Oscillator, use high power trading with geometry, get better entries, understand the three
legs to trading, use technical analysis with NinjaTrader 7, use a breakout system with cycles
for greater returns with less risk, use TurnSignal for better entries and exits, trade with
an edge, use options profitably, learn to trade online, map supply and demand on charts,
quantify and execute portfolio rotation for auto trading.

Written by Many Expert Traders

The book was written by a large group of 35 expert traders, with high qualifications, most
of who trade professionally and/or offer trading services and expensive courses to their
clients. Some of them charge thousands of dollars per day for personal trading! These
expert traders give generally 45-minute presentations covering the same topics given in
this book at the Traders World Online Expo #12. By combining their talents in this book,
they introduce a new dimension to finding a profitable trading edge in the market. You can
use ideas and techniques of this group of experts to leverage your ability to find an edge to
successfully trade. Using a group of experts in this manner to insure your trading success is
unprecedented.

Youll never find a book like this anywhere! This unique trading book will help you uncover
the underlying reasons for your lack of consistency in trading and will help you overcome
poor habits that cost you money in trading. It will help you to expose the myths of the
market one by one teaching you the right way to trade and to understand the realities of
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Parallels to the Traders World Online Expo 12

Trade the Markets with and Edge $3.99

This is an important book discussing the use of different strategies methods


about trading.

It was written by over 30 expert traders. The book was designed to help you
develop your own trading edge in the markets to put you above others who
dont have an edge and just trade by the seat of their pants. 90% of traders
actually lose in the markets and the main reason is simply that they dont have an edge.

All of the writers in this book are very experienced and knowledgeable of different ways. Each
of them has their own expertise in trading the markets. What sets these traders apart from
other traders? Many think that beating the markets has something to do with discovering and
using some secret formula.

The traders in this book have the right attitude and many employ a combination of fundamental
analysis, technical analysis principles and formulas in their best trading strategies. This gives

WWW.TRADERSWORLD.COM June/July/August 2017 135


them a trading edge over other traders. If you want to be successful at trading, you too must
have your edge. One needs to find successful trading strategies and implement them in their
own trading method.

The purpose of this book is to present to you the best trading strategies of these traders so
that you might be able to select those that fit you best and then implement them into your
own trading style. I wish to express my appreciation to all the writers in this book who made
the book possible. They have spent many hours of their time and hard work in writing their
section of the book and the putting together their video presentation for the online expo.

Guide to Successful Online Trading - Secrets from the Pros


$3.99

This is one of the finest trading books youll ever see about trading. The
reason is that it comes from a group of expert pro traders with multiple
years of experience.

Trading as you know is extremely difficult. It is estimated that 90% of


traders lose money in the markets. To help you overcome this statistic, the
pro traders in this book give you their ideas on trading with some of the best trading methods
ever developed through their long time experience. By reading about these trading methods
and implementing them in the markets you will then have a chance to then join the ranks of
the 10% of the successful traders.

The traders in this book have through experience the right attitude and employ a combination
of technical analysis principles and strategies to be successful. You can develop these also.
Trading is one of the best ways to make money. Apply the trading methods in this book and
treat it as a business. The purpose of this book is to help you be successful in trading.

From this book you will get all the strategies, Indicators and trading methods that you need
to make big profits in the markets.

This book gives you:


1) Audio/Visual Links to presentations from pro traders
2) The best strategies that the professional traders are using now
3) The broad perspective you need in todays difficult markets
4) The Exact tools that you need to make profitable trading decisions
5) The finest trading education

WWW.TRADERSWORLD.COM June/July/August 2017 136


CRAIG TRADING: Craig Haugaard made 300.9% in his World
Cup Trading Championships Account in 2014 - Want to
Know How? $3.99
This book contains an interview that I made with Craig Haugaard, third-place
finisher in the 2014 World Cup Championship of Futures Trading with a
300.9% net profit. I asked him many questions on exactly how he did it.
In the rest of the book I explain to you how to use the indicators that Craig
used to make his 300.9% return.
Here are the indicators that he used:

Seasonality
MACD
Stochastics
Moving Averages
Trailing Stops
Fibonacci Retracements & Extensions

All of the charts in this book are produced using my favorite charting software Market-Analyst.
I have also arranged for you to get a FREE trial so that you might have the chance to actually
work with these indicators with a real charting platform.
You will also be able to view the video presentations that I personally created so you can
see how these indicators can be setup and followed with clear and concise step-by-step
instructions. After you understand how these indicators work, I would then recommend that
you go to WorldCupAdvisor.com and consider following Craig Haugaards real-time trades.

This one-of-a-kind book teaches you how to identify the direction of the markets and trade
the markets by using popular trading indicators. This is done by concise instructions backed
by learning videos, hands on practice with real trading software and by following real-time
trades of a master trader.

Mastering Your Trading: Learn from Expert Trading Advisors


Mastering Your Trading is the perfect source for learning
various methods of trading the market from expert advisers.
$3.99

This book focuses on various methods of trading developed by many top


trading advisors. There are 17 well written articles and it is packed by insight
that can benefit the beginning to the expert trader. This is a must read. The
trading methods and strategies presented in this book can help to succeed
in todays volatile market environment. From preparing your psychology to the demands of
timing the market and managing the risk, this book tells it all.
The book provides you the tools that are necessary for making the right trades and when to
get in and out of the market. The book covers:

WWW.TRADERSWORLD.COM June/July/August 2017 137


Price and Volume the only True Indicators
Uncovering Market Secrets
How to handle capital exposure
Secrets of Safe Profitable Day Trading
Using Social Media Sentiment Cycles
How to Dramatically Improve Your Trading Psychology
How to Handle Trading Losses
Using a Market Scanner to Save Time
How to Stop Guessing
How to Get the Right Trading Computer
Simple and Practical Trading Tips
And much more

This book is an enhanced Edition which means that the articles are backed with audio visual
presentation links. Most of the presentations are in HD quality and are put together by the
writers of the articles in the book and really help the learning process.

Successful trading is based on knowledge and having the right psychology to trade the markets.
This book will lift your trading to a much higher level and will save you an enormous amount
to time.

WWW.TRADERSWORLD.COM June/July/August 2017 138


Trading with Success $4.99
This book contains an interview in Chapter 1 with Rob Mitchell, who
finished in 2nd place in the 2014 World Cup Championship of CME
E-mini Trading with a 57% net profit.

Rob Mitchell is the president of Axiom Research & Trading, Inc. and has
been a trading system developer for over 20 years and has developed a
number of commercially successful trading systems. He has at various
times been the largest eMini S&P trader in the world. Rob has also acted
as a Commodity Trading Adviser, has traded for hedge funds and has won
the Robbins World Cup eMini trading championship in the past. Rob is
a trading teacher and mentor and is the founder and head trader of Oil
Trading Room which is devoted to providing advanced educational resources to traders at all
levels.

In the rest of the book I will explain to you some of the trading ideas of Rob that he uses in
both his Oil Trading Room and in his World Cup Advisor Account. You can then actually see and
understand how some of his ideas work.

I am not going to tell you exactly how Rob used the ideas to make his return of 57% on a
$10,000 investment. That information is not public and belongs only to Rob.

I will tell you some of the trading ideas he uses and help you understand how these ideas work.
I would then recommend that you go to World Cup Advisor and consider following Robs trades.
You will be able to automatically mirror Robs trades in your own brokerage account with World
Cup Leader-Follower AutoTrade service. You will also be able to see what his trades look like
on your own charts and better understand why he made the trades.

Takumaru Forex Trading $4.99


This book contains an interview in Chapter 1 with Takumaru Sakakibara,
who finished in 2nd place in the 2014 World Cup Championship of Forex
Trading with a 122.6% net profit. Takumarus largest drawdown
(cumulative peak-to-valley percentage decline in month-end net equity
during the life of the account) was -21.5% from 6-30-15 to 10-31-15.

Please remember that past performance is not necessarily indicative


of future results.

Please remember that Forex trading involves substantial risk of loss,


and past performance is not necessarily indicative of future results.

In the rest of the book I will explain to you some of the trading ideas Takumaru said he used

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in the championship. You can then actually see and understand how his ideas work.

I am not going to tell you exactly how Takumaru used the ideas to make his return of 122.6%
on a $10,000 investment. That information is not public and belongs only to Takumaru.

I will tell you which indicators he used and help you understand how these indicators work.

Michael Trading: Learn about some of the trading tools he used $4.99
Michael Cook, was the first-place finisher in the 2014 WORLD CUP
Championship of Futures Trading with a 366% net profit. In this
book there is a detailed interview with Michael with questions and
answers of exactly what he used to win the championship. In this
book I will explain to you the indicators that he said he used in the
interview. You can then actually see and understand how they work.
Here are some the indicators and methods that he said he used: 1)
Moving Averages 2) Seasonality 3) Cycles 4) Seasonality 5) Price
Patterns 6) Williams %R 7) Long with Stops 8) Commitment of
Traders Report You will also be able to download a video presentation
that I personally created so you can see how these indicators can be
setup and followed in a step-by-step manner. After you understand
how these indicators work, I would then recommend that you go to WorldCupAdvisor.com and
consider following Michael Cooks trades.

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