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Stock Barometer

Stock Barometer

Stock Barometer

Stock Barometer is completely independent. We have never and will not ever accept compensation from any company whose stock we recommend. Our goal is to…

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The Week Ahead

9/8/2014 6:18:25 AM

GoodMorning Traders,

Sideways markets continue to rule the day, or at least last week in the markets. The short term energy in the market suggests that we'll have to wait a little while longer for that elusive sell off, as efficient price action remains the story...

As for the Nasdaq Barometer:

Daily Stock Barometer qqq Trader Primary System Chart


Stock Barometer Analysis

We remain in Sell Mode as the barometer is moving lower, but the price action remains static.

The Stock Barometer is our proprietary market timing system. The direction, slope and level of the Stock Barometer determine our outlook. For example, if the barometer line is moving down, we are in Sell Mode. We'll target the next key reversal date for timing. A Buy or Sell Signal is triggered when the indicator clearly changes direction. Trend and support can override the barometer signals.


Money Management & Stops

To trade this system, there are a few things you need to know and address to control your risk:

• This system targets intermediate term moves, of which even in the best years, there are usually only up to 7 profitable intermediate term moves. The rest of the year will be consolidating moves where this system will experience small losses and gains that offset each other.
• This system will usually result in losing trades more than 50% of the time, even in our best years. The key is being positioned properly for longer term moves when they come.
• Therefore it is vitally important that you apply some form of money management to protect your capital.
• Trading a leveraged index fund will result in more risk, since you cannot set stops and you cannot get out intraday.

Accordingly;

• Make sure you set your stops so that you can lose no more than 2% per trade (based on the QQQ if you're trading leveraged funds and options with our trading service).


Potential Cycle Key Reversal Dates

2014 Potential Key Reversal Dates: 1/15, 1/21, 2/5, 2/16, 3/20, 4/10, 4/26, 5/6, 6/18, 6/23, 7/16, 9/6... These dates have an accuracy of +/- 2 days. We publish dates up to 2 months in advance.

SPY 2014 Forecast/Model

9/6 is our next focus date - which was Saturday. I've flipped the cycle over to show the market in sync with the recent price action. If anything, this suggests chop for the next month or so, followed by a larger move.

35/105 Trading days Cycle 2013-2015

2013 Potential Key Reversal Dates: 1/16/13, 1/29, 2/14, 3/6, 3/15, 3/28, 4/5, 4/25, 5/13, 5/30, 7/19, 8/20, 8/29, 10/4, 11/3, 12/30. These dates have an accuracy of +/- 2 days. We publish dates up to 2 months in advance.

2012 Potential Reversal Dates: 1/12, 1/27, 2/16, 2/23, 3/16, 4/9, 4/25, 5/26. 6/2, 6/15, 7/2, 7/25, 8/13, 8/30, 9/8, 9/25, 10/7, 10/30, 11/15, 12/17, 1/15/13.

Our IRG Market Timing and Sentiment data service shows the performance of these forecast turn dates going back to 2003 and for the remainder of 2012. Our additional timing work is based on numerous cycles and has resulted in the above potential reversal dates. These are not to be confused with the barometer signals or cycle times. However, due to their past accuracy I post the dates here.


Timing Indicators

Use the following timing/momentum indicators to assist in your trading of the QQQ, GLD, USD, USO and TLT. They are tuned to deliver signals in line with the Stock Barometer and we use them only in determining our overall outlook for the market and for pinpointing market reversals. The level, direction, and position to the zero line are keys in these indicators. For example, direction determines mode and a buy signal 'above zero' is more bullish than a buy signal 'below zero'.

QQQ Timing Indicator (NASDAQ:QQQ)

QQQ Timing Indicator Chart

The QQQ Spread Indicator will yield its own buy and sell signals that may be different from the Stock Barometer. It's meant to give us a big picture idea of the next turn in the market relative to the barometer signal.

Bonds Timing Indicator (AMEX:TLT)

Bonds Timing Indicator Chart

Want to trade Bonds? Use our signals with Lehman's 20 year ETF AMEX:TLT. The direction of bonds has an impact on the stock market. Normally, as bonds go down, stocks will go up and as bonds go up, stocks will go down.

US Dollar Index Timing Indicator (INDEX:DXY)

US Dollar Index Timing Indicator Chart

Want to trade the US Dollar? Use our signals with the Power Shares AMEX:UUP: US Dollar Index Bullish Fund and AMEX:UDN: US Dollar Index Bearish Fund. The dollar direction can have an impact on the market and multinational companies - as the dollar goes up, it lowers the earnings for multinationals and can weaken the stock market and more so the Nasdaq.

Gold Timing Indicator (ARCX:GLD)

Gold Timing Indicator Chart

Want to trade Gold? Use our signals with the Gold ETF AMEX:GLD. Gold gives us a general gage to the overall health of the US Economy and the markets. Want to trade gold options - try our Gold Options Trader service at www.stockbarometer.com - trials are only $1.

OIL Timing Indicator (AMEX:USO)

OIL Timing Indicator Chart

Want to trade OIL? Use our signals with AMEX:USO, the OIL ETF. We look at the price of oil as its level and direction has an impact on the stock market. Want to trade OIL (USO) options - try our OIL Options Trader service at www.stockbarometer.com - trials are only $1.

Secondary Stock Market Timing Indicator

Secondary Stock Market Timing Indicator Chart

We maintain hundreds of popular and proprietary technical indicators that break down market internals, sentiment and money flow to give YOU unique insight into WHEN you should BUY or SELL the market. We feature at least one here in support of our current outlook.


Daily Stock Market Outlook

We remain in Sell Mode, expecting the market to consolidate then initiate a larger move lower.

The dollar looks to be spiking here, which seasonally speaking is inline with a top. Bonds are channeling higher, but the move down here towards the lower end of the channel is causing liquidity to continue funding stocks. Oil is weak, as inventories continue to build, which is not reflective of a strong economy - as the ECRI shows that growth is moderating quickly.

A few more things to chew on:

Equity to Index Option Volume Ratio Chart

2014 10/20/40 Week Cycles and Seasonality Chart

The above chart, as referenced earlier, shows the 10 week turning lower and a 10/1 20 week cycle low. That's bearish...

Regards,


 

If you want to see some of our indicators in Social Media, please visit and "LIKE" our FaceBook page. I'll have periodic updates on there and we WANT your feedback. This will be a good way to share your views with other traders. http://www.facebook.com/InvestmentResearchGroupInc

If you want to learn more about some of my models and indicators, we use my blog to cover them in more detail. If you're looking for more information, please visit our blog - We'll have updates and publish other articles there. http://investmentresearchgroup.com/Blog/

 

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