CMT_Association

CMT_Association

Conclusion: In early 2024 gold reached the price objective derived from the breakout of the large triangle that had evolved beginning in early 2022. Upon reaching the area of the objective, a classic buying climax halted the trend. The subsequent trading range has been characterized by distribution. In the event of a breakout lower, the amount of distribution...

CMT_Association

This piece was meant to focus on the number of major equity indices that are near all time highs, or attempting to break out of long term ranges, and how their behaviors around those prior highs over coming months will likely offer significant insight into what comes next. It evolved to something else. I am convinced that most market fluctuations are random,...

CMT_Association

Conclusion: FXI has reached a potential inflection point. The outcome of the current technical setup is likely to define the direction over coming months, and will likely result in significant low risk trading opportunities. FXI, is the China Large Cap ETF that holds the 50 largest large cap Chinese stocks trading on the Hong Kong exchange. FXI is currently...

CMT_Association

This is the yearly perspective Ten-year Treasury. Note the break of the secular downtrend and the push above the 3.35% pivot. It's worth noting that the MACD oscillator has turned higher for the first time since 1985. The basic definition of an uptrend is a market consistently defining higher highs and higher lows. For instance, a great example of a downtrend...

CMT_Association

To Recap: In parts one and two we used MACD monthly perspective momentum across a large number of tradable assets to produce a matrix of tradable assets, and then to distill an overview of each category's momentum state. The raw data is placed in the quadrant most consistent with the combination of the MACD momentum state and its price trend. The raw data...

CMT_Association

In the first four installments we described an exercise utilizing the momentum in asset classes, the relationship between those classes and the Organization for Economic Co-operation and Development (OECD) Composite Leading Indicator (CLI) for the United States, to anticipate the business cycle and markets. In the last installment we discussed the changes from the...

CMT_Association

In the first three installments we described an exercise utilizing the long term momentum in asset classes, the relationship between those classes and the Organization for Economic Co-operation and Development (OECD) Composite Leading Indicator (CLI) for the United States, in order to anticipate the business cycle and markets. Those posts are linked below. Since...

CMT_Association

Last year I produced several posts that described an exercise that utilizes long term momentum changes between asset classes and the relationship among asset classes to anticipate the business cycle. That series and parts 1 and 2 of this series are linked below. Parts one and two of the series described the general methodology, presented the matrix with the raw...

CMT_Association

Last year I produced several posts that described an exercise that utilizes long term momentum changes between asset classes and the relationship among asset classes to anticipate the business cycle. That series and part 1 of this series are linked below. Methodology: Individual markets and ratios are plotted in the quadrant that best describes their...

CMT_Association

Last year I produced several posts that described a methodology utilizing long term momentum changes between asset classes and the relationship among asset classes to help anticipate the business cycle. That series is linked below. When I worked in the institutional setting I would place hundreds of assets, ratios, spreads of individual corporate bonds and...

CMT_Association

In parts one and two (linked) we discussed the construction and use of relative strength ratios (RS) in trading and analysis, common errors, and best practice. In part three we look at the consumer discretionary to consumer staples ratio and attempt to draw trading and economic insight from that analysis. Any method used to analyze a single security price chart...

CMT_Association

In part one (linked) we discussed how to construct and use relative strength ratios (RS) in trading and analysis. We also discussed common errors and best use. In part two we finish that general discussion. In part three we will analyze consumer staples verses consumers discretionary and begin to discuss other ratios that I find useful. How do spreads correct?...

CMT_Association

This is part one of a series on relative strength ratios. Part One: Relative Strength Ratio (RS) analysis is used to compare one markets performance with that of another. The RS line provides a direct comparison of strength or weakness relative to the another. RS analysis is particularly useful for active institutional managers who are judged relative to a...

CMT_Association

In part one (4-1, linked) we outlined the base characteristics of spring and upthrust patterns. In part two we examine two charts that have the potential to develop the behavior, and describe why they are candidates. The two examples use daily perspective charts but the patterns are fractal and translate well to all time frames. Many popular published...

CMT_Association

Spring and Upthrust: In the first three parts of this series (linked) we covered the basics of reversal bar patterns including hooks, pipes, key reversals, and climaxes. In this piece we focus on springs and upthrusts. Historically these patterns were associated with trading ranges, but I find the concepts useful anytime a market tests significant support or...

CMT_Association

In parts one and two (linked) we covered the basics of reversal bar patterns including hooks, pipes, and keys. In this piece we focus on the buying and selling climax. In the final installment we will focus on upthrusts and springs. The patterns covered in this series represent an overt change in the balance of supply and demand. Importantly, very few patterns...

CMT_Association

In part one we discussed the basics of reversal bars. To recap: Most reversal bars/patterns occur on significantly wider than normal price ranges with opens and closes near the extreme of the bars and on significantly higher than normal volume when viewed in the context of the recent past. In general, the wider the price spread and higher the volume, the more...

CMT_Association

Over the next few posts, we plan on reviewing single and multi-bar reversal bar structures. In proper context these are among the most important and informative of all tape features. They often mark important turns in the prevailing trend or the completion of a trading range. More practically, they can be utilized to position trades and stops against. These...