The State of the Trend

By: George Krum | Fri, Apr 6, 2012
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Last week the daily trend turned down, while the weekly and monthly trends of the three main US indices (DJIA, NDX and SPX) remain up.

Apparently, GS is the only investment bank on Wall Street that didn't get the FED's memo, that stock prices have reached a permanently high plateau, and that from now on no declines will be allowed whatsoever. In their monthly chartbook they came up with a 1275 forecast for the SP500, as reported by Seeking Alpha.

Since we subscribe to the "Trust but Verify" school of thought, we decided to double check, and it turns out they got it right. Should the monthly SPX drop below the pivot line at 1362, the next support comes in at 1276.25, to be exact.


Next, we took a look at their 20 most and least recommended stocks, and sorted them according to their monthly risk/reward and trend ratios. The end result (published on my blog) shows that their recommended stocks have on average a much higher Risk/Reward ratio of 89.5 v 56.5% for the stocks to be avoided, and on average are more overbought as well: 73.47 v 4.24%.

Let's hope they got the fundamental picture right.



George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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