FYI | Feb 10 2011
FNArena has added another video to its Investors Education section on the website.
ATW's Jerry Simmons explains why his analysis suggests US equities seem poised for a sizeable correction. This view is further strengthened by a double top formation for copper, traditionally a leading indicator for risk assets and global investor sentiment. Total duration of this video is 53 mins.
Summary
In this educational video, Jerry Simmons, Lead Mentor and Co-Founder of the Advanced Trading Workshop, Inc. explains in detail how ATW tools are used to project completion targets of 5-wave-moves, taking the S&P500 as an example. He goes on to predict a high probability of a turn-around in the 1320 – 1350 area for the S&P500, taking it down to 1230-1250 and possibly as far down as 1200. However, this major reversal is subject to the usual ATW Reversal Confirmation Steps, the most important of which is a weekly RBO (Reversal Break-Out). Conclusion: TIGHTEN YOUR STOPS! If the reversal occurs in the S&P500, it is likely to take down most equity markets and the bonds with it.
In copper, a leading indicator, a confirmed break-out below US$4.45 would confirm a Double Top and significantly increase chances for an extended down move; “copper is a bubble”. But there is always the opposite case to consider, and that would be a confirmed break-out above US$4.68. The current level is a “make-it-or-break-it” level. Hic Rhodos, hic salta!
Comments
S&P500
Jerry analyses the S&P500 cash index (TradeStation: $INX) and concludes:
• Any trader, including day traders, should always consider multi-time-frames and not only one time frame, including a weekly and even a monthly chart.
• The low in the S&P500 was on 6/3/09 at 666.79; in any market, a 100% move up, i.e. doubling, is a significant milestone. In the case of the S&P500, that corresponds to 1332, a mere 10 S&P500 points from where we are now.
• “It is unbelievable, how profitable you can be as a trader, just trading weekly break-outs.”
• For the S&P500 and hence most world equity markets, it is “time to tighten stops” and lock-in profits made on the way up in this explosive bull-market since March 2009.
Copper
With the price moving back down from the high on Friday, we are still within a Double Top and coming off it. If we get a confirmed break-out below US$4.45 this would confirm the Double Top and significantly increase the likelihood of an extended down move. On the other hand, a break-out above US$4.68, less likely, would send copper much higher.
NASDAQ and Russell 2000
With the S&P500 having made new highs, and the NASDAQ and the Russell2000 not following suit until recently, a bearish divergence formed, begging the question, who was right, the S&P500 or the NASDAQ/Russell2000? Since then, both the NASDAQ and the Russell2000 have also made new highs; hence, the bearish divergence has disappeared. This sequence of a bearish divergence developing and then disappearing is often the harbinger of a turnaround, another sign in the direction of a significant pull-back in the equities markets developing
To view the ATW Strategic Prep Video (originally from November 29, 2010) titled "Analysis INX_HG_TY_TRAN" click HERE or visit the FNArena Investors Education section of the website.
Here's the direct link: https://www.fnarena.com/index2.cfm?type=dsp_front_videos
All views expressed are Jerry Simmons's, not FNArena's (see our disclaimer).
Jerry Simmons has over 25 years of full-time trading experience. He is the senior partner and head mentor for the “Masters” Programme within the education system at New York based Advanced Trading Workshop (ATW). ATW recently set up shop in Australia through the establishment of ATW Australia (since mid-2010).
FNArena is pleased to have Jerry Simmons as a highly valued contributor to its service which aims at both educating investors and assisting them with their own market analyses.
The above mentioned videos can be accessed via the FNArena Investor Education section at https://www.fnarena.com/index2.cfm?type=dsp_minc_education)
About ATW Australia
Founded in June 2010, ATW Australia is a “one-stop-shop for all a trader needs to succeed”: quality education for new traders, superb advanced trading education, fast unfiltered data, a world-leading trading platform, customer oriented competitive brokerage, quality ‘Made in the USA’ specialized trading computers, trading magazines, and the all-important psychological mentoring and coaching for traders. The trading educational products are provided by the Advanced Trading Workshop, Inc. in New York, all other services are provided by a network of partners that were chosen based on their superior products and services in their specific field of expertise. FNArena is one such partner.
To learn more visit www.advancedtradingworkshop.com.au.
