<![CDATA[Spread Betting Central Feed]]> http://www.spreadbettingcentral.co.uk (c) Global Investor http://www.spreadbettingcentral.co.uk/feeds/docs en-gb 60 Mon, 05 Jan 2009 05:00:02 GMT <![CDATA[Spread Betting Central Feed]]> http://www.spreadbettingcentral.co.uk/images/logo.jpg http://www.spreadbettingcentral.co.uk <![CDATA[Yen - ADX turn down]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=85 http://www.spreadbettingcentral.co.uk/strategies.htm?id=85 New Concepts in Technical Trading Systems (Trend Research, 1978).

In this book he uses a 14 period ADX, and refers to a number of important signals. One of these signals is the turn down of the ADX line from a high level, an early warning sign of a potential end of the trend.

Since the book was published a number of other analysts have also looked at this signal, and one possible practical interpretation is this:
1) if the ADX line turns down having risen above the two DI lines, and is at a high level, this is a warning sign that the trend may be ending
2) this may just mean that the trend is going to halt temporarily, and then renew itself; or the trend may be finishing for good
3) there may be a test of the most recent high / low
4) stop placement needs review, and it could be a good time to exit at least part of a position.

The reason for mentioning this research right now is the action of the currency pair Dollar Yen, which is one of the seven instruments we follow in our ADX snapshots. From late August to late October the instrument declined from near 110 Yen per dollar to around 90, and the 14 day ADX peaked at 49 on 27 October, turning down subsequently. This proved to be just a temporary halt in the decline, the downtrend renewed, and a new low was made on 17th December around 87 Yen per dollar, with ADX peaking on 22nd December at 50. Some would argue that a higher ADX peak (50 versus 49) shows the downtrend still has life; others would now reckon that this second turn down in the ADX indicator has significance and that a successful test of the most recent low will set up a potential base for a recovery.

]]> Sat, 03 Jan 2009 00:00:00 GMT <![CDATA[Happy new year!]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=84 http://www.spreadbettingcentral.co.uk/strategies.htm?id=84 ]]> Sun, 28 Dec 2008 00:00:00 GMT <![CDATA[New forum facility]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=83 http://www.spreadbettingcentral.co.uk/strategies.htm?id=83 www.spreadbettingcentral.co.uk site.

The public area within the forum can be accessed and contributed to by any user, once they have registered. This will hopefully enable users to exchange views on a wide range of spread betting issues.

Attendees of Malcolm Pryor's seminars on spread betting are also able to access a private area within the forum.
]]> Fri, 26 Dec 2008 00:00:00 GMT <![CDATA[ADX messages - Indices]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=80 http://www.spreadbettingcentral.co.uk/strategies.htm?id=80 Sun, 21 Dec 2008 00:00:00 GMT <![CDATA[Uptrend in gold]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=81 http://www.spreadbettingcentral.co.uk/strategies.htm?id=81 We noted the nascent uptrend in gold last week. Here is an update, confirming we have moved into uptrend mode. Previous blog repeated for convenience, additional comments in bold

Gold is having a second attempt at an uptrend.

Recent history is:
1) downtrend between 10 October and 24 November - from a high of $930 to a 12 month low of $670
2) then a sideways consolidation, triangular shape
3) then a break out of the triangular consolidation on good volume, 21 November, causing some short covering and new longs, rising on 25 November to $814
4) the break out then appeared to fail, dropping back below the apex of the triangular consolidation, to a low of $720 on 8 December; ADX fell back below trend levels and -DI crossed up over +DI in this period on both the 8 and 14 day indicators
5) in week ending 12 December a new surge upwards  to a high of $818 on 11 December; higher intermediate highs and lows are in place; the 8 day ADX is rising and above 25, with +DI above -DI; the slower 14 day ADX is as yet only at 17, but rising with +DI above -DI
6) in week ending 19 December a new high for this move was reached, $866, and by the close of the week ADX levels reached 23 (and rising) on the 14 day ADX, 39 on the 8 day ADX (falling back a little at the end of the week). In uptrend mode.


In summary, a second attempt at a new uptrend; which could of course fail again.Currently succeeding...]]> Sun, 21 Dec 2008 00:00:00 GMT <![CDATA[Spread betting seminar]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=82 http://www.spreadbettingcentral.co.uk/strategies.htm?id=82
For full details and to book a place visit www.sparkdales.co.uk]]> Sun, 21 Dec 2008 00:00:00 GMT <![CDATA[Gold - nascent uptrend - second go]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=78 http://www.spreadbettingcentral.co.uk/strategies.htm?id=78
Recent history is:
1) downtrend between 10 October and 24 November - from a high of $930 to a 12 month low of $670
2) then a sideways consolidation, triangular shape
3) then a break out of the triangular consolidation on good volume, 21 November, causing some short covering and new longs, rising on 25 November to $814
4) the break out then appeared to fail, dropping back below the apex of the triangular consolidation, to a low of $720 on 8 December; ADX fell back below trend levels and -DI crossed up over +DI in this period on both the 8 and 14 day indicators
5) now in the last week a new surge upwards  to a high of $818 on 11 December; higher intermediate highs and lows are in place; the 8 day ADX is rising and above 25, with +DI above -DI; the slower 14 day ADX is as yet only at 17, but rising with +DI above -DI

In summary, a second attempt at a new uptrend; which could of course fail again.]]> Sun, 14 Dec 2008 00:00:00 GMT <![CDATA[Indices - ADX messages - update]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=79 http://www.spreadbettingcentral.co.uk/strategies.htm?id=79
FTSE100 is in a wide trading range of 3665 to 4640, and we have seen some extreme volatility within that range, particular at the higher and lower extremes. We are likely to see even more volatility when the bounadaires of this October to December trading range are penetrated.

Similar pattern in FTSE250, range being around 5490 to 6840.

S+P500 still in downtrend mode per the 14 day ADX (which is at 27) - but ADX is falling; and the 8 day ADX has fallen below 25.  The downtrend slows. Visual inspection suggests the index is very close to moving into sideways mode, if it hasnt already.
]]> Sun, 14 Dec 2008 00:00:00 GMT <![CDATA[Gold - break out fails for the time being]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=72 http://www.spreadbettingcentral.co.uk/strategies.htm?id=72 A recent break out from a triangular area caused many traders to look at long trades in gold. That break out has now failed, at least for the time being, and the nascent uptrend has failed with it. For ease of reference the text of the previous blog is repeated below, with additional comments in bold.

The recent history of price action in gold is
1) significant decline from a high of 930 to a low of 670 between 10 October and 24 October - 670 was also a 12 month low
2) consolidation similar in shape to a small symmetrical triangle to 20 November, with ADX falling below 25
3) break out from the consolidation area on good volume on 21 November
4) ADX rising with +DI above -DI, in the case of the faster 8 day ADX to 42 by 28 November, and in the case of the standard 14 day ADX to 22; the faster ADX is therefore already in uptrend mode, while the standard ADX has not yet reached the 25 level, but is heading that way - a nascent uptrend.
5) By week ending 5 December price had not only fallen back below the break out price, but had also fallen back to a point just below an extension of the lower line of the triangular formation; this is not typical price action for a powerful upward move
6) By week ending 5 December the 8 day ADX had fallen back to 25, the 14 day ADX (which never made it to 25) had fallen back to 17

Looking at a weekly chart this nascent uptrend could just turn out to be a temporary retracement, but many shorter term traders will or have been looking to capitalise on the break out of the triangular consolidation area.

]]> Sun, 07 Dec 2008 00:00:00 GMT <![CDATA[IX Conference]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=73 http://www.spreadbettingcentral.co.uk/strategies.htm?id=73 After some time abroad I returned to the UK and spoke at the IX Conference at the Excel centre on 6th December. My slot was well attended, and I had some very interesting discussions afterwards. The main focus of the session was the difference between what winning and losing spread bettors do, including planning, getting an edge and bet size. Thanks to current users of this site who came to the talk, and welcome to all new users following it!

]]> Sun, 07 Dec 2008 00:00:00 GMT <![CDATA[Indices - more on ADX messages]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=74 http://www.spreadbettingcentral.co.uk/strategies.htm?id=74 Here is a further update in the series of blogs looking at what ADX is telling us about the 3 indices we track

1) FTSE100 -  in volatile sideways mode, both the 14 and the 8 day ADX indicators have fallen to low levels (17 and 13) and are still falling. Some crisscrossing of +DI and -DI (common in sideways markets) has occurred. Visual inspection confirms a sideways market (a volatile one)
2) FTSE250 - 14 day ADX has now fallen below 25,  8 day ADX is at 21. Moving into sideways mode
3) S&P500 - 14 day ADX falling but still at 32, 8 day falling and down to 28; some signs of the downtrend slowing, but volatile]]> Sun, 07 Dec 2008 00:00:00 GMT <![CDATA[Gold - nascent uptrend]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=71 http://www.spreadbettingcentral.co.uk/strategies.htm?id=71 1) significant decline from a high of 930 to a low of 670 between 10 October and 24 October - 670 was also a 12 month low
2) consolidation similar in shape to a small symmetrical triangle to 20 November, with ADX falling below 25
3) break out from the consolidation area on good volume on 21 November
4) ADX rising with +DI above -DI, in the case of the faster 8 day ADX to 42 by 28 November, and in the case of the standard 14 day ADX to 22; the faster ADX is therefore already in uptrend mode, while the standard ADX has not yet reached the 25 level, but is heading that way - a nascent uptrend.

Looking at a weekly chart this nascent uptrend could just turn out to be a temporary retracement, but many shorter term traders will or have been looking to capitalise on the break out of the triangular consolidation area.]]> Sun, 30 Nov 2008 00:00:00 GMT <![CDATA[ADX messages - further update]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=70 http://www.spreadbettingcentral.co.uk/strategies.htm?id=70 Here is a further update in the series of blogs looking at what ADX is telling us about the 3 indices we track

1) FTSE100 -  in sideways mode, both the 14 and the 8 day ADX indicators are below 25, and falling. +DI is below -DI for the 14 day, but has crossed above for the faster 8 day. Some crisscrossing of +DI and -DI is common in sideways markets. Visual inspection confirms a sideways market (a volatile one)
2) FTSE250 - 14 day ADX is falling, and down to the commonly used cutoff level of 25, but 8 day ADX has fallen to 20. Same pattern as for FTSE100, +DI has crossed up above -DI in the shorter 8 day version, but not in the 14 day version. Not quite in sideways mode, but almost. Visual inspection shows a retracement of the downtrend
3) S&P500 - 14 day ADX falling but still at 34, 8 day falling and down to 32; downtrend has stalled before and then renewed, is now slowing again]]> Sat, 29 Nov 2008 00:00:00 GMT <![CDATA[ADX messages - update]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=67 http://www.spreadbettingcentral.co.uk/strategies.htm?id=67
1) FTSE100 - definitely in sideways mode now, both the 14 and the 8 day ADX indicators have fallen below 25. This is confirmed by visual inspection
2) FTSE250 - 14 day ADX is falling, but still at 28, but 8 day ADX has fallen below 25. This suggests that a minimum the downtrend is stalling.
3) S&P500 - 14 day ADX falling but still at 32, 8 day down to 27 but now rising again, so not yet in sideways mode, although the downtrend has been stalling.]]> Mon, 17 Nov 2008 00:00:00 GMT <![CDATA[Thanks]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=68 http://www.spreadbettingcentral.co.uk/strategies.htm?id=68 ]]> Mon, 17 Nov 2008 00:00:00 GMT <![CDATA[The importance of being out of the market]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=69 http://www.spreadbettingcentral.co.uk/strategies.htm?id=69
Being out of the market has several benefits

1) the time out is an opportunity to reflect
2) and an opportunity to rest, recharge the batteries
3) many traders find when they come back to the market after a break they have a fresh perspective, and in some cases more objectivity.

There are some excellent times to be out of the market
1) during vacations - dont make the mistake of trying to trade on holiday, the results will often be poor, and that can spoil the holiday as well as destroying one of the points of it
2) during major personal events, for instance moving house
3) during illness

Traders that trade all the year round come what may risk performance deterioration. For most people it is better to schedule a number of periods every year to be out of the market.
]]> Mon, 17 Nov 2008 00:00:00 GMT <![CDATA[FTSE 100 - "Scenario 2" still valid]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=64 http://www.spreadbettingcentral.co.uk/strategies.htm?id=64 By request here is confirmation of where we currently stand on the six scenarios previously identified for the FTSE 100.

For convenience the original text for the first three scenarios is reproduced.

Scenario 1 Those that look for such things are able to identify a massive head and shoulders pattern over the last couple of years. One calculation of the related target is 3927, which has already been achieved. Scenario 1 says we are near the lows already. But these geometric patterns often overshoot their targets. The pattern did indeed overshoot, to a low of 3665.

Scenario 2

Looking at the transition from bear to bull market in early 2003 there are several weekly pivot lows just above the 3600 mark. Going all the way back to 1998 these levels offered support then. The range is roughly 3610 to 3640. Scenario 2 says these levels will halt the decline. These weekly pivot lows are in play. The support levels are still in place. The low of the recent move (3665) did not penetrate these support levels. We are now more than a fortnight past that low. It is possible that the low will be tested again. Then we need to see if the old support levels still hold.

Scenario 3

The lowest weekly close of the previous bear market was 3467. Scenario 3 says we are going there. This is the next lower level of importance if Scenario 2 breaks down

]]> Wed, 12 Nov 2008 00:00:00 GMT <![CDATA[S&P500 / FTSE250]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=66 http://www.spreadbettingcentral.co.uk/strategies.htm?id=66 www.spreadbettingcentral.co.uk to see if the patterns are similar.

With the standard 14 day setting for the ADX indicator, S&P500 peaked at 45, has been falling ever since, and at close of play on 11th November had reached 32. FTSE 250 peaked at 47, has been falling ever since, and at close of play on 11th November had reached 30. So neither officially out of down trend mode yet, but both with the same pattern as FTSE100, recent peak and then continual decline in ADX suggesting abatement of the power of the down trend. Neither has yet fallen as far as the ADX indicator on the FTSE 100.

With the faster 8 day setting, S&P500 peaked at 62, has been falling since, and fell below 25 on 6th November (signalling the possible start of a sideways market); to date +DI has climbed above -DI for a couple of days but failed to stay above. FTSE250 peaked at 57, has been falling since and is down to 26. +DI crossed above -DI on 4th November and has managed to stay above since.

So with both S&P500 and FTSE250 the faster ADX setting is already signalling the possible start of a range bound market, the standard 14 day setting will also do so if ADX falles to below 25 and the DI lines start to crisscross.

At this point the patterns on both these two indices are not out of line with FTSE100, although they are lagging the patterns on FTSE100 by a few days.]]> Wed, 12 Nov 2008 00:00:00 GMT <![CDATA[FTSE100 - ADX messages]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=65 http://www.spreadbettingcentral.co.uk/strategies.htm?id=65 What is ADX telling us about the FTSE 100?

1)      Let’s first look at ADX with the standard 14 day setting. As of close of play Tuesday 11th, –DI was still above +DI;  +DI did cross briefly above – DI on 4th and 5th November, but quickly slid back down below it again. Generally, in down trends –DI is higher than +DI, in up trends +DI is higher than –DI. In sideways markets these two lines often criss cross over each other. The current configuration is still as for a down trend, however if we start to see the DI lines criss cross this would suggest a sideways market. Remember however just like moving averages both ADX and its two DI lines are both lagging indicators, so can be a little late with their signals.

2)      One of the traditional signals with ADX is a turn down in ADX from a high level, signifying a reduction in the power of the trend – this can lead either to a consolidation or sometimes to a reversal of the trend. The 14 day ADX reached the level of 40 on 28th October, but has been declining since, signalling an abatement of the power of the downtrend

3)      A key cut off level for the ADX indicator is 25 – this level is often used to distinguish between a trend and a range bound market. As of close of play Tuesday 11th the ADX indicator fell below 25 for the first time since early October, signalling a move into a range bound market

4)      Now turning to ADX with an 8 day setting, the patterns we have already looked at with the 14 day setting are all in place, but they are started showing up in the indicator earlier. The ADX indicator peaked at 52 on 17th October, and then started falling, moving below 25 on 7th November, The first crossing of +DI over –DI occurred on 30th October, and the two lines have been criss crossing since, signalling a range bound market.

 

Looking at the evidence of both the 14 and the 8 day settings ADX is suggesting we have now transitioned from a down trend to a range bound market. From this point obviously it could either way. The range bound market could lead to a renewed down trend, or it could provide a platform or base from which a new up trend could emerge. In a range bound market we need to start to clarify the major support and resistance levels, and then take our cue from a break of those support and resistance levels.

]]> Wed, 12 Nov 2008 00:00:00 GMT <![CDATA[FTSE consolidation]]> http://www.spreadbettingcentral.co.uk/strategies.htm?id=62 http://www.spreadbettingcentral.co.uk/strategies.htm?id=62
With the set of 6 scenarios discussed in recent blogs on the FTSE 100 we have reached a situation with Scenario 2 where the various support levels between 3600 and 3650, some of them going back to 1998, have held. The price action over the next week will help clarify whether this is a serious attempt at building a base, or just a temporary respite before the downtrend is renewed and we move to Scenario 3, or beyond.]]> Sun, 02 Nov 2008 00:00:00 GMT