Gold is telling a story

Technicals

Just saw this chart today and what a surprise.

It is oscillating in a symmetrical triangle and in a general uptrend, is a bullish sign for gold.

A clean breakout above 825-830 will likely to see Gold targeting 900 potentially. This is the target price projected by the width of the triangle.

Implications:

Despite a strong USD recently, Gold didn’t buckle under and in fact, looks like rallying from the recent low at 775. It could be reflecting the inflation pressure that we are seeing right now or risk appetite is back or we could see a weakening USD soon. Could be a combination of these three factors but this is definitely one interesting development going into the new year.

Will update when I see changes. Till then, have a good and prosperous New Year in 2008

US Stock Takes: Consolidation (Sell into rally)

I decided to expand my model, which trades on S & P 500, further to diversify the risks and enhance the returns. Total returns to date since start of 2007 is pretty good (43.96%) and beats a buy and hold strategy on the S & P 500 (5.5%).

The 3 models are:

Model 1 (Trend): + 22.77% (81.8% positive trades)
Model 2 (MACD): + 15.49% (44.4% positive trades)
Model 3 (STO): +5.7% (+52% positive trades)

As of now, Model 1, Model 3 are flashing sell and model 2 is on buy.

Using the percentage of positive trades in each model and divide over the aggregate positve trade percentage, out of every 100 bucks, 45 bucks will go to model 1, 25 bucks to model 2 and 30 bucks to model 3.

Will update when there are changes.

Happy belated Merry XMAS and have a prosperous 2008.

US Stock Takes: Maintain buy

After FOMC meeting on Tuesday, US stock markets closed much weaker despite a 25 bps cut. And for the past few days, have been fairly up and down.

So far today, we have seen US stocks still weak and with Citibank's decision to put the SIV on the balance sheets, we will not know how this will impact Citibank and whether the rest of the financial companies will follow suit or not.

In any case, I have seen anything fundamental changing yet and the buy signal generated on 29th Nov is still intact.

USD: Time to cover shorts and turn long

At the same time US equities are rallying, I am seeing a similar rally in USD. This is one divergence I am looking closely (more rate cuts should equate to a weaker USD) but USD is proving more resilient for the past few days.

This is an overdue technical rebound. I don't have any figures to show now but will do so soon. In any case, looking to buy EUR at possibly 1.4520 and CHF perhaps at 1.13 and higher. GBP is something I am staying out at the moment. Will look to short some carry trades as they go higher as well.

That's all for now. Will update as and when I see new changes. 

US Stock Takes: Cautious Buy

After Wednesday's impressive rally, my quantitative model has turned to a buy signal. Overall sentiment remains fragile but after a five wave correction from October top, the counter rally is overdue.

I expect this rally to retrace back at least 50% of the losses from mid October. Using S & P as guide, this rally may have headwinds from 1500 to 1540 and at this area, will watch my quant model for any turning signals again.

Till then, enjoy this rally underpin by Fed put once  again. 

EURJPY: Comparing Aug sell off and now (similar)

Comparing Channel A (Aug sell off) and channel B (present)

Looking at Aug sell off and current sell off, the pattern of the technical chart of EURJPY is pretty similar.

Point 1: MAE (Moving average exponential) 20 cutting below MAE 50.
Point 2: ST STO K line rising above D line initially and then cutting back down viciously
Point 3: MACD remaining below its signal line and in negative zone

Point 1, Point 3 have occurred and now I am waiting for ST STO to cut below D line to have all 3 points occurring together. For some reason, 3 is a magical number in TA and if that occurs, can short some more. Reckon that could be a break below 160.

Downside target remains at 155-156 at the bottom of the current bear channel (B) and a full blooded sell can be initiated if 155-156 gives way, and could target 150-151.
(suggest to put trailing stop at 155-156 if reaches there and also OCO take profit at 150-151)

Teck Mechanical Trading Model

	Return	Strike Rate
GBP	19.24%	53.66%
EUR	24.78%	52.94%
JPY	15.23%	57.14%
CHF	20.84%	48.2%
Crude Oil	81.47%	50.00%
Total	161.56%	261.89%
Annual	23.08%	52.38%

I used to be an impulsive trader and it only ended up benefiting the brokers who service my trading account. Fed up with my losses, I decided to do something about it.

Using actual trading data and after doing some internal cleaning and initial back testing, I have come up with a mechanical sort of trading model which will generate buy or sell signals on each instrument and such signals are generated based on different set of technical indicators.


The table shows the results of my trading model based on 6 to 7 years of data and the returns on each instrument are tabulated. Over this period, the trading model showed an annualized return of 23.08% and the strike (success) rate was about 52.38%.

Quite excited over the test results and looking to improvise on it and testing on a wider spectrum of products.

Do email me at weeteck22@gmail.com if you have any queries.

US Stock Takes: Maintain Sell

The above chart is a self-created proprietary indicator and so far, has worked quite well, generating a positive return of 22% since Mar 1 2007.

Despite Tuesday short rally, it was still on sell mode and the outcome was very clear yesterday. Outlook remains bearish withS & P is hovering below 200 day MA support and testing the 50 MA weekly support soon.

Looking at the weight of evidence, any rally will be countertrend and I will look to sell into rally.

Will update as and when there are changes.

Stay tuned.

FX - Nov

Dollar

I think this website is good for beginners and professionals.