Advised #9

Hi this is Derek Frazier from Mexico,

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In this issue:

• Predictability of trading tempo 

• Why the latest trade ideas haven't activated from Sunday

• Natural Gas and Oil update

• What You Can do to Catch Short Trades at the End of an Equities Trading Cycle 

• Next action expected

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Predictability of Trading Tempo

Lets talk about predictability, something that only cyclical traders understand. You can go around and look for other internet phenoms and try to see their trading, but its disorganized, ambivalent and actually pretty hopeless. They don't know what's going to happen like us.

Guess what? There's nothing to do on a week like this except wait to see if the 80 day cycle will form lower in its last 20 day cycle, which I expect to happen. The thing is, people are getting in early before the last down move coming end of week or next week. There are still days that are part of this cycle that are expected to continue lower. The normal movement of price is for the last of the 20 day cycle to complete just below the end of the last, which was last week’s prices in most equities.

And since it is bearish, it is expected that the down move be slightly longer in duration, as the cycles expand downward in amplitude and longer in period. 

Heres some things to do when the market does this predictable sideways and faulty bouncing like we see this week:

• Vacation and waste time with friends

• Visit doctors appointments

• Exercise and play with your kids 

Theres nothing to do. The trade is already over for this cycle. And its predictable enough to plan your life around this! Which is only a thing available for cyclical traders like us.

Sunday Trades not activated

The watchlist of trade ideas from Sunday are either not activated because they have not broken a reliable upward VTL or they are not exhibiting consolidation at hourly highs with breadth deterioration in New York or any volume imbalances. There is simply nothing happening in the weakest stocks and sectors that I've highlighted. 

Natural Gas and Oil

$NG hasnt pushed down as I thought it would. And its in my ignore bin. But 7.25 was the exit for that 40 day VTL short. Perhaps it is forming a higher peak, with much higher prices in mind as it undergoes a prolonged fundamental event. 

Oil has a new 80 day cycle below it as stated here.It should move up for a while. Nothing is guaranteed on commodities, and they move in a worse fashion than stocks. 

What You Can do to Catch Short Trades at the End of an Equities Trading Cycle 

Although not cyclical trading and completely unnecessary…You can attempt to wait for highs of the week to be made and then short as stocks come down on volume into their 3 hour lows. Usually, at the end of a cycle like this, it is wise to look for stocks that are high on volume and have artificially created weekly highs in this type of week. Also they are not probably going to be known names or weekly optioned stocks. This can be accomplished with a simple scan as price breaks down throughout the day on volume or alot of trading takes place at the top of hourly bars. Then watch for an imbalance of sellers. It is really an all day thing to sit and watch and generally not reliable enough to base trading off of. Instead, trading the end of the 80 day cycle should be done well before we get to thai point in the market with double sided action and news being used to drive day traders. Its best to avoid rotational days at this point. Institutions are rotating into stocks and rotating out of more. Stay away. Or have scans that detect what you're looking for. Because this is not cyclical trading, stay away. 

Next Action Expected

Despite today’s gigantic rally in the last 90 minutes of the NY session, it is apparent that it is fueled by selling stocks that have done badly, so its just a short term bounce that should stop at the 20 day VTL resistance above price or less in the indexes. Stocks will continue to move down. The entry is to watch for stocks that are doing badly after their bounce higher from this week’s action. Then selling. Its that simple. Be careful with doing this when the market is rallying in general on volume and with good breadth!

I hope you've enjoyed this issue

Derek Frazier

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