Recently soybeans made an unusually consistent upward move which lasted for four and a half months. The move ran from mid December 2011 to May 1 2012. This turned out to be a mirror reflection of the previous set of swings in the soybean market but it was not easy to spot because it was a non symmetrical mirror image.
The symmetrical mirror images are usually easy to spot and trade because the mirror image swings are approximately the same size. The first chart below shows the daily soybean chart. I have drawn a vertical line indicating the center of the mirror images. To the left I have added -1, -2, -3 and -4 marking the left side of the mirror image. To the right of the vertical line I have added +1, +2, +3 and +4. This shows the right side of the mirror image. This chart shows the right side of the mirror images is not symmetrical to the left side and therefore was difficult to spot until after it formed.
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Now that we can see this mirror image we can use it to forecast the next set of mirror image swings into the future. On the chart below, I have added -5, -6, -7 and -8. These swings on the left represent the next set of swings that will occur on the right side of the chart. I have added +5, +6, +7 and +8 to the right side of the chart. I have also added blue lines that represent the swing sizes on both time and price. If this mirror images continues to repeat we can expect the soybean market to make a series of swings between 1300 to 1420 through the end of August.
Here is an update to the May 14 posting discussing the S&P500 Index and the MarketWarrior Swing Projector. In the May 14 posting I showed that the Swing Projector was indicating that the S&P500 should continue its downward move. The first chart below shows the ETF SDY which is the S&P500 dividend Index through May 21. You can see the S&P500 continued to fall as the Swing Projector indicated.
The Swing Projector should be used with other indicators to help determine the market trend and turning points. On the chart below, I have added the 200 day moving average and I have also added the Smoothed Stochastic momentum indicator. The Swing Projector is showing the Red Triangle with the letter B and the circle with a b. The red icons are the Swing Projector Warning Icons that indicate all the time and price conditions for a bottom have been met. This does not mean a bottom will occur when they appear just that the conditions have been met for a turning point to occur. The other indicators are used to help time the exact turning point. You can see the stock fell to the 200 day moving average. The momentum indicator is at an extreme oversold position almost at zero and on May 21 a reversal price bar has occurred turning upward. These three items together with the Swing Projector are showing this market is making a bottom.
The second chart below shows the same SDY market through June 1st. You can see the market did make a swing upward for a week as expected but has now turned down again. The Swing Projector is currently not giving a clear indication what the next market move should be. After a few new price bars next week, the Swing Projector will establish a new clear indication of the market direction.
In the Forecasting Made Easy software, we added support for Metastock format data in April and released support for ASCII text files today May 30. We will be releasing a new Yahoo Finance data downloader next week. In late June we will have support for eSiganl 10.6 available. The third-party access to eSignal 11 will be released by eSignal in the fourth quarter and we will have support for it at that time. To help us direct the development of FME we would like you to use the poll below to tell us what real-time data service you use or are interested in.
The main issue with real-time data today is that the turn over rate for real-time traders has never been higher. I have an opportunity to talk to real-time data feed support personal and brokers from time to time. The current burn out rate for a new real-time trading account is about 3 months. This means that after 3 months the new trader has lost enough money that he/she must either send more money to his account or stop trading. A similar story of high turn over is told by personnel at most real-time data services. Brokers I talk to often say that high frequency trading has made day-trading with a desktop PC much harder. The short-term charts do not have the trading opportunities that were available even two years ago.
This all makes finding the best real-time data service to support a little harder. You can help the development of FME by letting us know which real-time data service you prefer. Thank you.
Lets start this update with the last picture shown in the original forecast posting. The first picture below shows the forecast chart from the original Forex EURUSD forecast. This is a daily chart and it shows my Master Time Factor forecast for the EURUSD covering the time period April 3, 2012 to June 30, 2012. The forecast shows the EURUSD currency pair curving downward. The movement in this forecast time period should form several swings downward toward 1.260.
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The next chart is our first update chart which goes up to Friday May 25, 2012. chart. I have drawn a red box around the time period that has unfolded since the forecast was made. The EURUSD is the green and blue candle stick bars. You can see the daily price bars for the EURUSD have followed the forecast lines down. The general curve of the market has followed the general curve of the Master Time factor forecast lines. This is one of the most accurate forecasts for the EURUSD that was posted for the pubic that you will find anywhere. Now lets look at that is coming next.
The final chart below is the same chart but now I have changed the EURUSD price bars to red OHLC bars to make them a little easier to see. On this chart I have drawn a red box around the remainder of this forecast. This time period is May 29 to June 30, 2012. The time of this update is May 28, 2012. Look at the forecast lines inside the box marking the time period. The forecast is as following. (1)A bottom should form in late May or Early June. Then (2) the EURUSD should form a choppy sideways base through most of June. Finally (3) a move up should occur toward the end of June. Some of the forecast lines used to make this forecast run out toward the end of June. This means I will be making a new Master Time Factor forecast for EURUSD toward the end of June. The new forecast should cover 3 month just as this forecast did. This forecast was made using the software Forecasting Made Easy and can be made by anyone using the Master Time Factor chart in this software.
Back in 1995 I published the book Gann’s Scientific Methods Unveiled: Volume 1. In this book I explained how W.D. Gann believed that certain planet combinations were important in certain markets. In this book I showed how I believe W.D. Gann used the Venus Saturn planet aspects in the corn market. Basically every market has a planet or planet combination that will influence the market. This means that the planet movements will have a higher than normal correlation to the turning points and the trends in a market. W.D. Gann found the relationship between corn and Venus Saturn in the 1930s and possibly even earlier. I wrote about this relationship in 1995. Lets take a current look at the Venus Saturn aspects and see if they still have any correlation to the corn market.
The picture below is the trading-day (not calendar days) chart for the nearby corn contract going back almost a year. On this chart I have placed the major aspects for Venus and Saturn. These are the Conjunction, Square, Trine and Opposition aspects. There were five aspects over this time period. I have labeled these 1, 2, 3, 4 and 5. Aspect 1 is a square. On the day of this aspect, the corn market made a large range day upward. The up move continues for another month and a half. Aspect #2 is a conjunction. This aspect came within a few days of significant market bottom. The third aspect is a square. This aspect was right on top a market bottom that started an up swing. The 4th aspect was a trine and saw the corn market fall a long two days before the aspect occurred and then move sideways for a few more days. The bottom was made two days after this aspect. The 5th and final aspect was an opposition. This final aspect occurred near a small top of no real significance.
So over the past ten months, four out of the five Venus Saturn aspects identified very good change in trend dates in the corn market. After almost 80 years this relationship found by W.D. Gann is working in the corn market. Remember the issue is the relationship between Venus and Saturn and corn. This relationship is more than just aspects. You can also use these planets to draw planet lines to find support and resistance prices which will also work very well in the corn market.
This blog posting was originally posted here as Tutorial #12 for our software Forecasting Made Easy
Let me start this tutorial by explaining the difference between the Master Time Factor and the Advanced Master Time Factor.
W.D. Gann’s forecasting method, the Master Time Factor (MTF) used historical cycles to find which cycle is repeating in todays market. W.D. Gann only used historical cycles that were the same time frame as the market he was looking to forecast. So W.D. Gann studied historical daily charts to forecast the daily chart and historical monthly charts to forecast the monthly chart and so on.
The Advanced Master Time Factor (AMTF) in our software Forecasting Made Easy allows you to mix and match time frames when doing historical research. This means you may want to forecast the daily chart and can overlay historical data that is a 5 minute chart, 60 minute chart or a monthly chart. You can mix and match historical data in any time frame combination allowing you to do research that no other software allows. Now lets look at the chart below.
The chart below is one of the teaching charts I created back in February to show what Forecasting Made Easy can do. The orange bars are the daily chart for Microsoft MSFT. This is the primary data set that we want to forecast. With Forecasting Made Easy you can overlay almost any time frame combination onto this daily chart. What I did was overlay 9 historical data sets on this chart. These were 60 minute data, covering one month each. This means that 9 historical data sets of 60 minute data covering one month were laid on top the daily chart for MSFT. I then proceeded to look for a best fit pattern match. The picture below shows the daily Microsoft chart with the two 60 minute price lines that represent the best fit.
I am always asked for advice on how to pick the best fit line. The answer is that you want to see the historical data form several turning points that line up with the data you want to forecast. In the picture below, I have added the labels A, B, C, D, E, F and G which mark tops and bottoms in the daily MSFT chart and the blue line which is the 60 minute data for the month November 2011. This blue line is the best fit line. When I make a forecast, I never use just one line. I always use two or three close-fit lines. The green line on the picture below is the 60 minute chart line for the month of October 2011. I selected this line because it started at a base at point G and then moved up following the curve of the MSFT price data and it also seemed to follow the blue best fit line. These two lines were used to teach how different time frames could be used to forecast the daily chart using the Advanced Master Time Factor.
The final chart below is an update to the two charts above. You can see that starting from February 1, 2012 to May 15, 2012 the daily chart of Microsoft followed the forecast curve at points 1, 2, 3 and 4. The blue best fit line has come to an end but the close-fit green line is still tracking well with daily Microsoft. This forecast curve shows there should be a top in daily MSFT in late May 2012 and then a bottom in mid June 2012. We will try to do another follow up in late June to see what happened. These types of accurate forecast are extremely common using this forecasting method.
Probably half the support requests I get here at Mikula Forecast Company (MFC) are questions about how to use indicators for forecasting. One of the big pushes we are making behind the scenes here at MFC is to add automation to our software. The more automatic an indicator is, the more popular it is.
One indicator in the MarketWarrior software that is semi-automatic is the Swing Projector. This indicator is based on the cycle work done by Edward Dewey. The indicator looks for the dominant cycle which is marked by a triangle containing the capital letter T, for top, or a B, for bottom. The indicator then looks for a harmonic sub cycle that is marked with a circle and the lower case letter t or b. This is one of the indicators we are converting into a totally automatic forecasting model and trading system for MarketWarrior 5.0.
Below shows some analysis I recently did using the Swing Projector for the market SDY which is the S&P500 Dividend ETF. There are several versions of the S&P500 but I like this Dividend ETF because the S&P500 cycles often seem to be more prominent in this ETF.
The MarketWarrior Swing Projector should be used on two time frames. In this example I am using the weekly chart and the daily chart. The first chart is the weekly SDY. Notice there is currently a Warning Line between two tops on this chart. The Warning Line indicates there is no cycle bottom between the two tops. When there is no bottom between two tops it indicates the up swing is very strong and has over powered the downward cycle. This usually indicates the second top will lead into a market decline as the downward cycle will soon re-exert itself. I manually labeled this with the number 1 on the chart below. This is a high probability top. The next bottom is now expected at point 2. I have manually drawn a rectangle to identify a time window where we can expect this next bottom to occur. Next we will look at the daily chart.
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The next chart shows the daily SDY and the Swing Projector. On this chart I have manually labeled the most recent three larger cycle tops with the numbers 1, 2, 3. Notice these cycle tops are all close to the same price. This is a triple top pattern for the large cycle tops. This indicates the next down move should be large enough to trade because triple tops often lead to a downswing. Look at the top and bottom that I have manually labeled 3 and 4. This down move between 3 and 4 will most likely have one small swing sub-set between the large swings and end up being, ‘ T –b–t– B ’. Or it will end up having two small swing sub-sets between points 3 and 4 and end up being ‘ T –b–t–b–t – B ’ . The Swing Projector will adjust the red and blue cycle points as the price swing develops.
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Based on the weekly and daily Swing Projector, I can forecast that the SDY should have at least one more leg down on the daily chart and fall below the point 4 bottom and end up making a bottom in the time window seen on the weekly chart. If you are interested in the Swing Projector remember there are a lot of Swing Projector examples in the MarketWarrior blog archive located here and also here. Look in the ‘Index by Indicator’ for Swing Projector
I have just uploaded a new tutorial that shows how to use Forecasting Made Easy to make a W.D. Gann style forecast using the Master Time Factor. Let’s take a moment and talk about what the name Master Time Factor means. W.D. Gann used the name Master Time Factor to refer to the historical cycle that is repeating in the current markets. For example if in the current market the historical cycles from 2003 are repeating, then we could say, 2003 is the Master Time Factor for the current market. W.D. Gann understood that at any moment the market was repeating a historical cycle. The question is which historical cycle is the current market repeating? In this tutorial I am going to try and find the Master Time Factor for 2012 silver. To read this tutorial click the link below.
I have just posted a new tutorial for using the Master Time Factor on the Forecasting Made Easy web site. This tutorial uses daily data for the Forex currency pair EURUSD. In this tutorial I am going to show you how to use Forecasting Made Easy to make a W.D. Gann style forecast using the Master Time Factor. What does the name “Master Time Factor” mean? W.D. Gann used the name Master Time Factor to refer a the historical cycle that repeated in the current markets. For example if the current market is repeating the cycle from 1993, then we could say, 1993 is the Master Time Factor for the current market. W.D. Gann understood that at any moment the market was repeating a historical cycle. The question is which historical cycle is the current market repeating? In this tutorial I am going to try and find the Master Time Factor for EURUSD. To read this tutorial click the link below.