As some of you know, we have done some work in moving our S&P Forecasting algorithm to daily charts. We have just started this work in earnest, but wanted to report on our progress for those who have kept in contact with us about this project. At this point, the work is probably 50% done but the basic waveform should not change radically from what we've got now, so we're fairly safe in using this to analyze markets at this point. Below is a chart of Treasury Bonds:
We have set everything up in a similar way to our intraday charts, so the resemblance should be clear. As you can see, we have been following the regular blue forecast up until the February intersection point when it looks like we flipped to the inverted forecast. If this is the case, we should decline into the early part of April.
As usually, we need to take a look at the confirming indicators to see if this is a viable trade or not. We have momentum divergence and an Exhaustion Bar that are telling us to go short. We've also got a nice breakout from a classic triangle chart pattern, so if we can break the low on Monday everything should be a go for this one.
The advantage of having a forecast to trade with is that you can look into the future to see where the good trading opportunities will be. The most obvious one on this chart is the peak on 6/2. There are actually two trades there: the peak itself and the breakout leading up/down to it in the first part of May. At this point we're expecting the 6/2 area to be a low, but there are 3 intersection points between us and that date so it could be a high if the market decides to invert. At any rate, this would be a good time to check the indicators and see if any opportunities present themselves.
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