manujain_1574
Recruit
- Messages
- 9
Dear albertomg,
Could pls explain more about 3 point trigger and "deviation of 2,5 point "
Forex Trading Signal 08/24/09
- Thread starter Crazy Cat
- Start date
Dear albertomg,
Could pls explain more about 3 point trigger and "deviation of 2,5 point "
manujain_1574, I'm not English speaker, and my words may not be precises. The forecast value for the Consumer Confidence is about 48.0. If finally the Conference Board publish a value that is 51.0 or more, or is 45.0 or less then it has a deviation from the forecast value of 3 points or more.
In my case 3 points is enough to put a trade, but 4 points is safer, like gpir suggest.
In my case 3 points is enough to put a trade, but 4 points is safer, like gpir suggest.
manujain_1574
Recruit
- Messages
- 9
Ohhhh, that ways, I believe language was the only prob .... I also got the same notion, but thought to clarify once .... anyways thanks
Sir Pipsalot
Former FPA Special Consultant
- Messages
- 511
The impending selloff to the 400 region on the S&P is based on a convergence of technical, fundamental, sentiment, and event risk factors. I talk about this stuff a lot in the Diamonds room, but to sum up the main point for each:
Technical - Elliott Wave has successfully predicted each of the major turns since I started following it closely over the last 2 years, and it says we're finishing off the final stages of primary wave 2 up which will have primary wave 3 to follow. By one of the most rigid rules in elliott wave, wave 3 down will be at least as large as Primary wave 1 down in percentage terms which means at least a 60-70% decline from the coming wave 2 highs over a 6 to 24 month type timeframe.
Fundamental - P/E ratios are ridiculously high pricining in major increases in earnings that are unlikely to be realized. Trailing 12 month P/E ratios are around 68 now. Typically valuation will overshoot too far on the upside during the boom, and overshoot too far to the downside on the bust, so we're likely to see these P/E's work down to the 10-20 range which implies the fair value of the S&P is closer to 250 than 1000 from an earnings perspective. And with a deflationary outlook, you have to assume book values will decline as well.
Sentiment - One of the key things most investors and traders don't understand is that extremes or peaks in optimism accompany extremes or peaks in price. Right now 89-90% of DSI respondants are bullish stocks which are extremes not seen since the 2007 highs. I even heard an analyst on Bloomberg radio today saying we may not even manage more than a 3% pullback in this bull market because people are buying dips so aggressively. Such myopic bullishness is what's extended this bear market rally so far, and what will ultimately cause it's doom. This situation confirms conditions are ripe for a major top reversal lower. When even the bearish analysts become bulls, ironically, it's time to get short... and that's starting to happen.
Event risk - All of the event/news risk is to the downside. A moderate recovery is already priced in, so anything to the contrary will cause a potentially brutal downside adjustment. There are probably a dozen potential problems, any of which could create a tailspin similar to what we saw with Lehman last September, except we're in a much more fragile condition to respond to it, and the political will to continue bailing out and providing stimulus is almost out. Commercial real estate, another major bankruptcy, PPIP failure, a major geopolitical event (war), a Chinese stock bubble crash, FDIC failure (closer than you might think), deflation accellerating, etc.
Guys, when I make clear position trade calls, I do so based on a lot of research, effort and reasoning. I explain myself from time to time, but the next day someone new comes along and wants to hear why... and then the next day the same thing and it a bit taxing. Usually with the signals I try to keep focused on the conclusions since if I explained the reason for everything like I just did above, the signals would be waaaaaaaaaay too long and would start to sound like a broken record. Also, it would be so much work, I probably couldn't keep it going for very long. But it's also nice to get my full reasoning out there every now and then... I just typically reserve that kind of depth for the subscribers.
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