Gonçalo Moreira, CMT
Independent Analyst
Summary
A historical approach to trends, from Dow to Elliott, Gartley and Gann. None of these great contributors subscribed to the adage "The Trend is Your Friend". Moreover, their legacy releases us from that idea. Whose friend is the Trend? A Historical approach to trends Abstract: Buy low and sell high? Buy high and sell even higher? Trend is an abstraction, almost irrelevant... What is the legacy of the forefathers of TA? Charles Dow: Some of its basic tenets: - The primary trend is inviolate - The averages discount everything - The theory is not infallible - The averages confirm each other - Volume confirms the trend Some of its basic tenets: - The primary trend is inviolate - The averages discount everything - The theory is not infallible - The averages confirm each other - Volume confirms the trend Ralph Nelson Elliott Rules & Guidelines The sequence is constant across all timeframes Time as less Important that form Actionary movements are the most profitable The market spends more time in corrective mode than in impulsive mode Alternation and equality are pan of the market structure and Fibonacci... The sequence The ratios H.M. Gartiey 'The best investment opportunity" Occurs with a 1/3 to 2/3 reversal The "sweet spot' is one of low risk to high, reward relationship Much better that a H&Ss Offers strong reasons to stop and target placements Volume confirms the pattern Gann: Added time dimension Multiple confluences Finding turning points Conclusion: Trend Trading strategies are based on the assumption that markets do trend, but its purpose is to find key turning points. Two choices become very good at finding turning points or develop a method where entries are of second importance. Related content: Where Is The Dow Going? How To Use Gann Indicators Elliot Wave principle Author: Gonçalo MoreiraLatest Live Videos
Editors’ Picks
AUD/USD bulls pause amid post-NFP USD rebound
AUD/USD is trading with a mild negative bias during the Asian session on Thursday, below a three-year high set the previous day. The US Dollar looks to build on Wednesday's upbeat US NFP-inspired bounce from an over one-week low, acting as a headwind for spot prices. However, the divergent Fed-RBA expectations, along with the underlying bullish sentiment, should help limit any meaningful corrective fall for the risk-sensitive Aussie.
USD/JPY strengthens above 153.00 despite stronger US jobs data
The USD/JPY pair attracts some sellers to around 153.20 during the early Asian session on Thursday. The Japanese Yen strengthens against the US Dollar in the aftermath of Prime Minister Sanae Takaichi's landslide election victory. The attention will shift to the US Consumer Price Index inflation report, which is due later on Friday.
Gold posts modest gains above $5,050 as US-Iran tensions persist despite strong labor data
Gold price trades in positive territory near $5,060 during the early Asian session on Thursday. The precious metal edges higher despite stronger-than-expected US employment data. The release of the US Consumer Price Index inflation report will take center stage later on Friday.
Bitcoin holds steady despite strong US labour market
Bitcoin briefly bounced from $66,000 to above $68,000 but slightly reversed those gains following Wednesday's US January jobs report. The top crypto is hovering around $67,000, down 2% over the past 24 hours as of writing on Wednesday.
The market trades the path not the past
The payroll number did not just beat. It reset the tone. 130,000 vs. 65,000 expected, with a 35,000 whisper. 79 of 80 economists leaning the wrong way. Unemployment and underemployment are edging lower. For all the statistical fog around birth-death adjustments and seasonal quirks, the core message was unmistakable. The labour market is not cracking.
Here is what you need to know on Thursday, February 12:
The United States (US) released stronger-than-expected US Nonfarm Payrolls report for January, adding 130K jobs in quite an auspicious start to the year, while the Unemployment Rate ticked lower to 4.3%, and Average Hourly Earnings held steady at 3.7% over the last twelve months.