TRIGGER$ (NOFX) May 2011

Issue : BETA-MAY Volume : 2011 -Pilots
Economic & Technical Analysis for the Active Trader
Economic & Techincal Analysis of the Current Market and what's Next Featured Articles
Hibernation Over?
The Fed Exposed
Understanding Gann
TechniFundamentalism TRIGGER$ publications combine both Technical Analysis and Fundamental Analysis together offering unique (and often correct) perspectives on the Global Markets. The backbone of this research is done by Gordon T. Long, Market Research & Analytics which is subscribed to by Professional Managers, Private Funds, Traders and Analysts worldwide. Every month Market Research & Analytics publishes three reports totalling more then 380 pages of detailed Technical Analysis and in depth Fundamentals. If you dont find our publication detailed enough, we recommend you consider theirs in addition to this one. For the rest of us, TRIGGER$ offers a distilled version of the 380 pages in a readable format for use in your daily due diligence. Read and understand what the professionals are reading without having to be a Professional Analyst or Technician. Successfully navigating todays markets requires information from a broad variety of sources. Triggers examines it all. From Macro Geo Political to daily events yearly cycles to break out points on a minute chart: we look at and analyze as much of the information as possible, pulling out the relevant and giving you what you need to know to make the right decisions on a daily basis. An initial or beginning publication occurs every month, both in a printable pdf as well as online. From there, the online version is updated daily with current events, charts, news and any relevant information pertaining to trading. The completed version of the publication isnt actually done until the last day of updates which occurs right up until the publication of the next issue. As well as the Traditional Methods commonly used, Market Research & Analytics has developed proprietary analytics for both Technical and Fundamental Analysis and has designed a methodology to combine the two whereby the synthesis delivers a truly unique and forward thinking analysis that gives cutting edge insight. TechniFundamentalism
4 8 16
Hybernation Over? The All Seeing Eye

Cover Story On Market & Economic Indicators
26
TRIGGER
The Vault
33 36
Traders Mentor Open Forums

TA & Trading Strategy Education Letters to the editor, Readers Comments, Discussions
Assessment
RISK
24
Need To Know Technical Analysis
Currencies & Metals
19 28
Featured Articles
Understanding Gann
Part 1 : Introduction to a New Methodology
The Fed Exposed
TRIGGER$ Publications For all inquiries, comments and contact please feel free to email us at: triggers@GordonTLong.com Main contributor : Gordon T. Long Market Research & Analytics Editor : GoldenPhi Analytical Summaries: GoldenPhi See page 36 for a complete list of our contributors.
3
Chart 1 above : all indications appear to favour more Up. If not represented correctly, price graphs can be deceiving. Read our article: "Hibernation Over" to understand how, why.
Chart 1
Hibernation Over?
Looking at Chart 1 (page 3, opposite) it wouldn't appear, technically, to be an obvious top nor does there appear to be any real reason to suggest this. In fact one could make many arguments for the opposite. The trend has been up since the lows at the start of 2009. From the high in 2008 to the low in early 2009, we have retraced past the normal Fibonacci Retracements of 38.2%, 50% and 62.8%. You can see how uncanny it is that the Fib retracement %'s act as support and resistance levels. If a strong down trend was still in effect from the 2008-09 down move, we would also expect that one of the Fib levels would have acted as resistance. At this point they have clearly been moved through. The last two months appear to be a sideways consolidation and the last pullback on the RSI bounced on the 50.00 level - the more we examine our chart to the left the more indications we can find that a full retrace back to the highs of 2008 are technically possible. While the chart to the left is of the S&P, examples across many Indexes and Markets will show you the same things - not a lot of indication of any pending reversals or negative market information. If we look at the mainstream media and what it is telling us - well, its always "time to get in" isn't it? Mountains of information from the most known sources can be found that could substantiate further the notion that the economy is improving and the "bad times" are now behind us We, here at TRIGGER$ hold a different view. Despite the abundance of information that appears to support a never ending bull market, we believe the Truth and Reality of the situation hasn't been correctly represented by the main stream media. The motivations and reasons for this are for another article... Lets just say that a little thinking on our part (your part?) and some correct perspective can show us what is really going on in the markets - and its far different from what the "leading media providers" are telling you. Probably the most misleading and least understood effect or consequence that is rarely considered or factored in when studying financial information is the Value of the Dollar and the impact that it is having. Not taking this factor in to consideration will have an analyst grossly misreading the market and what is taking place. Both charts and financial information will be improperly represented, fooling most by providing a false picture of what is really happening. Chart 1 on the opposite page is a standard representation used to show where the markets are presently. Compare this to Chart 2, on the following pages, where Inflation and the Value of the Dollar have also been considered.
5
6
Hibernation Over?
(continued)
To the left we can see the S&P 500 adjusted to include Inflation. From this perspective it becomes clear what is going on. From 2000 we have been in a Bear. The rise from 2009 has only been a Correction to the Bear - NOT a Bull market as the mainstream media is representing it. At best, the Bear is presently taking a siesta, but has been out of Hibernation since 2000. Our Green Channel shown on Chart 2 allows for more Up yet to come. However we should be looking for this to end and resume the downtrend started in 2000. This is probably the clearest and easiest chart / information to understand while trying to determine our present location and near future movements. Reflect this back on to Chart 1 and we do find some correlations - both are suggesting more up. However with our Chart 2 perspective we can see that this move will terminate soon. Through out the rest of this issue you will find more information that also supports this conclusion. GoldenPhi
Chart 2
7
TRIGGER$, in collaberation with "Gordon T. Long - Market Research & Analytics", have thier own unique approach to Techni-Fundamental Analysis. The material found in TRIGGER$ is the conclusions of a multi-perspective methodology boiled down to its final essence. This methodology includes the following analytical approach: Time Frame short - term Duration less than 90 days Approach Technical Analysis Key Tools Elliott Wave Principal, WD Gann, JD Hurst, Bradley Model, Proprietary Mandelbrot Fractal Gen. Global-Macro Analysis Tipping Ponts - Pivots Financial Metrics
intermediate longer term
1 2 months 1 8 months +
Risk Analysis Fundamental Analysis
The Global-Macro Analysis which is so prevalent in our articles and on our Tipping Points site, plays the critical role of bridging our highly analytic Technical Analysis with our detailed Fundamental Analysis. We have found that in the short term the markets are driven by emotion and sentiment. In the longer term, they are driven by financial fundamentals. As Warren Buffett is often quoted as saying: In the short term the market is a slot machine but in the long term it is a weighing machine. We have found that the transition shows a lagging correlation between changes in the Global Macro, followed by Corporate Earnings, then followed by the sell side analyst community estimates. If you are looking for more detail than is provided in TRIGGER$, consider looking at our primary inspiration: "Gordon T. Long Research & Analytics". We do our best to summarize this information and deliver it in an easy to read format. This by its very nature doesn't allow us to include all the very detailed analysis that takes place in order to deliver us its conclusions. All information and conclusions delivered in TRIGGER$ articles are a product of the methodology outlined above.
8
The All Seeing Eye

On Market & Economic Indicators
Housing
If the housing industry is any indication of economic conditions, then things haven't been this poor in a long time. As Chart 3 to the right shows, Housing Starts are at the lowest they have been for the past 50 years. Having even less, by almost 50%, then the early 80's and 90's.
Chart 3
It doesn't appear as if there are any major plans in the works either. Permits remain on course with Starts, showing no indication of a future building spree.
Chart 4
9
Chart 5
Usually one associates Mortgage Rates with Home Sales and Prices. The lower the rate, the more incentive for buyers to both take on mortgages as well as take out larger loans. Rates are at an all time low (Chart 5). As we saw in the previous charts, the low rates are not having an impact. Housing Sales, another good indication of the climate, are down from thier peak in 2006, despite Rates (Chart 6).
Chart 6
10
Chart 7 to the right gives us what the Official Government Record of unemployment is in the U.S. By the governments own account, we are close to the same levels experienced in the early 80's. Unfortunately the Labour Department's numbers don't include underemployed and those who have stopped looking for work.
Unemployment
Chart 7
The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1 994. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers. (Chart 8 ) The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labour Statistics (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.
Chart 8
11
Chart 9
Payroll Employment is back at the levels of 2003 with the last 3 years in a steady decline. Something else to consider when looking at employment numbers is the length of time people have remained out of work. Chart 1 0 below shows us that the percentage of the Labour Force remaining unemployed for greater then 27 weeks has risen from less than 1 % in 2008 to over 4.5% as of Jan 201 0. This recent rise appears to be unprecedented and gives us even more perspective on the unemployment situation as a whole.
Chart 1 0
12
Margin Debt is one measure of the amount of optimism or pessimism in the stock market. Rising margin debt generally correlates to a rising stock market. Margin use had soared to a level higher than the top of the dot.com technology bubble a few weeks ago. Investors are now taking money off the table. Few trust the market advance to be anything more than a Fed QEII induced rise through money pumping. They believe the market has gone too far too fast and the ending of QEII will be the death nail for the markets.
Margin Levels
Chart 11
* Margin Debt fell off early 2000 which was a precursor to a mjor market retracement into the fall of 2001 . * Margin Debt fell off in early fall 2007 which was a precursor to a major market retrenchment into March 2009. * We are presently experiencing Margin Debt falling off significantly. This is highly unusual and a strong precursor of "risk off" beginning to creep in to the market.
13
The overlay below of the Nominal and Real (inflation-adjusted) Dow illustrates the concept of Money Illusion, the tendency of people to think of currency in nominal, rather than real, terms. Below the Dow series is the Consumer Price Index (CPI) from 1 91 3 and with estimates for the earlier years. The CPI is the inflation (deflation) multiplier that accounts for the difference between the two views of the Dow.
The Illusion of Money
DOW should be around 500
Chart 1 2
One of the most conspicuous differences between the nominal and real series is apparent during secular bear markets, such as the period from the mid-1 960s to 1 982. In the nominal chart, this period looks like a choppy sideways pattern. But when we adjust for the high inflation of the 1 970s and early 1 980s, the sideways chop becomes the cascading downward direction of the real value of the market price. The 1 982 dollar had shrunk in purchasing power to about 33 cents in comparison to its 1 965 counterpart. Inflation had devoured two thirds of its value. The charts above are adjusted for real Dow price for the dollar value of May 1 896. This highlight the money illusion over the entire time frame.
14
Interest Rates are on the Launch Pad - therein lies the problem for the Fed. Any further debt monetization by the central bank now becomes counterproductive. Thats because as inflation rates climb, bond investors demand higher interest rates. The lower real interest rates become, the less participation there will be in the bond market from private sources. If you dont believe me, ask Bill Gross. The Fed is now damned if it does and damned if it doesnt. Interest rates have been artificially suppressed for such a long time that no matter what Bernanke does come June, interest rates will rise. If it enacts another iteration of Quantitative Easing, the Fed may find itself the only player in the bond market. The truth is that only a central banker could afford to own bonds that are yielding rates well below inflation, and growing even more so. What if there has been 3% inflation during the year? The $1 03 can buy $1 03 worth of widgets. Since the price of widgets has presumably risen 3% during the year, the investor will still get the same number of widgets she could have gotten a year earlier. The "real return" on the investment is 0%, derived from the 3% nominal return less 3% inflation. The real return is the nominal investment return less price inflation over the period. (The Consumer Price Index is used to measure inflation.) The chart below of "Real Interest Rates" (1 969-2005) shows that real rates went negative for the seven years 1 974-1 980, hitting a low of 3.3% in 1 975. During the period, the average real interest rate was -1 .7%. Negative real interest rates are rare in U.S. financial history. Investors in financial assets generally catch on to the fact that they are playing a losing game when real interest rates approach 0%, let alone go negative.
Historical View 1969 - 2005
Inflation and Interest Pressures
Real (After Inflation) Interest Rates
Chart 1 3
15
Rates cont.
Current View 2000 - 2011
Chart 1 4
As of 2008 it appears that we have a reversal, change in trend with Real Rates lifting. Last low in rates (201 0) is Higher than previous low (2008).
YOUR ADVERTISEMENT HERE

Contact TRIGGER$ triggers@GordonTLong.com
16
Need To Know Technical Analysis
S&P 500
Daily
Watching support and resistance of the potential Head and Shoulders. Currently testing support. Note we have 2 fairly clear 3 wave counts. If support for the Head and Shoulders does not hold, would expect another 3 wave down... which could potentially turn in to a 5 wave count. Currently looks like we have wave 1 in.
3 Reverse Head & Shoulders? 2 1
1 3
This same general pattern can found across many markets. SPY, OEX, NASDAQ and DOW are all displaying the same.
SPY OEX
Chart 1 5
Chart 1 6
NASDAQ DOW
Chart 1 7
Chart 1 8
Chart 1 9
17
S&P 500 Daily Two weeks since our previous analysis : Blue Dash line is the same as previous marking H&S potential - DOW still shows this as a possibility. Support on the 89ma found. Watching to see if it pops back up over H&S support - black dotted line shows parallel channel to solid black below. Can see 5 small waves from last high - complete or all inside a larger wave? (marking 1 ) - see previous mark-up for 3 wave patterns and thoughts.
Update
Chart 20
SPY
OEX
Chart 21
NASDAQ DOW
Chart 22
Chart 23
Chart 24
18
Rounded Top
The chart below you should recognise as chart 1 from the beginning of this issue. We have left in the channels as well as the pitchfork and fib retracements. Added to this you can see the top left hand side of a Ellipse containing the price action. We are watching this as the most likely current scenario. Allowing still for more up potential as we 'crest' the top of the ellipse pattern, we can expect the same types of movements as we roll the trend over and start to head down. While there will be sharp sell-offs (as in the summer of 201 0) we can expect the other side of the pattern to loosely mimmic that of its rise. Unlike the sell-off we see beside it from the end of 2007 to the beginning of 2009, we should have a more rolling and slower decent (over all) to fulfill the other side of the ellipse pattern. Even understanding how the markets are most likely to unfold, this can be a difficult pattern to trade effectively. Each sell off will have you convinced the Bear has started and each rise will have you looking for a strong continued move up. Trade with care.
Current Pattern :
Weekly
Ellipse - Rounded Top
Chart 25
19
The following is a reprinted interview with W .D. Gann from "Ticker and Investment Digest", Vol 5, Num 2, Dec. 1909, pg 54.
Part 1 : Introduction to a New Methodology
Understanding Gann
An Operator Whose Science and Ability Place Him in the Front Rank His Remarkable Predictions and Trading Records
Sometime ago the attention of this magazine was attracted by certain long pull Stock Market predictions which were being made by William D. Gann. In a large number of cases Mr. Gann gave us, in advance, the exact points at which certain stocks and commodities would sell, together with prices close to the then prevailing figures which would not be touched. For instance, when the New York Central was 1 31 he predicted that it would sell at 1 45 before 1 29. So repeatedly did his figures prove to be accurate, and so different did his work appear from that of any expert whose methods we had examined, that we set about to investigate Mr. Gann and his way of figuring out these predictions, as well as the particular use which he was making of them in the market. The results of this investigation are remarkable in many ways. It appears to be a fact Mr. W.D. Gann has developed an entirely new idea as to the principles governing stock market movements. He bases his operations upon certain natural laws which, though existing since the world began, have only in recent years been subjected to the will of man and added to the list of so-called modern discoveries. We have asked Mr. Gann for an outline of his work, and have secured some remarkable evidence as to the results obtained therefrom. We submit this in full recognition of the fact that in Wall Street a man with a new idea, an idea which violates the traditions and encourages a scientific view of the Proposition, is not usually welcomed by the majority, for the reason that he stimulates thought and research. These activities the said majority abhors. W. D. Ganns description of his experience and methods is given herewith. It should be read with recognition of the established fact that Mr. Ganns predictions have proved correct in a large majority of instances. For the past ten years I have devoted my entire time and attention to the speculative markets. Like many others, I lost thousands of dollars and experienced the usual ups and downs incidental to the novice who enters the market without preparatory knowledge of the subject.
By Richard D. Wyckoff, Ticker and Investment Digest
20
Understanding Gann
I soon began to realize that all successful men, whether Lawyers, Doctors or Scientists, devoted years of time to the study and investigation of their particular pursuit or profession before attempting to make any money out of it. Being in the Brokerage business myself and handling large accounts, I had opportunities seldom afforded the ordinary man for studying the cause of success and failure in the speculations of others. I found that over ninety percent of the traders who go into the market without knowledge or study usually lose in the end. I soon began to note the periodical recurrence of the rise and fall in stocks and commodities. This led me to conclude that natural law was the basis of market movements. I then decided to devote ten years of my life to the study of natural law as applicable to the speculative markets and to devote my best energies toward making speculation a profitable profession. After exhaustive researches and investigations of the known sciences, I discovered that the law of vibration enabled me to accurately determine the exact points at which stocks or commodities should rise and fall within a given time. The working out of this law determines the cause and predicts the effect long before the street is aware of either. Most speculators can testify to the fact that it is looking at the effect and ignoring the cause that has produced their losses. It is impossible here to give an adequate idea of the law of vibrations as I apply it to the markets. However, the layman may be able to grasp some of the principles when I state that the law of vibration is the fundamental law upon which wireless telegraphy, wireless telephone and phonographs are based. Without the existence of this law the above inventions would have been impossible.
(continued)
In order to test the efficiency of my idea I have not only put in years of labour in the regular way, but I spent nine months working night and day in the Astor Library in New York and in the British Museum of London, going over the records of stock transactions as far back as 1 820. I have incidentally examined the manipulations of Jay Gould, Daniel Drew, Commodore Vanderbilt & all other important manipulators from that time to the present day. I have examined every quotation of Union Pacific prior to & from the time of E. H. Harriman, Mr. Harrimans was the most masterly. The figures show that, whether unconsciously or not, Mr. Harriman worked strictly in accordance with natural law. In going over the history of markets and the great mass of related statistics, it soon becomes apparent that certain laws govern the changes and variations in the value of stocks, and that there exists a periodic or cyclic law which is at the back of all these movements. Observation has shown that there are regular periods of intense activity on the Exchange followed by periods of inactivity. Mr. Henry Hall in his recent book devoted much space to Cycles of Prosperity and Depression, which he found recurring at regular intervals of time. The law which I have applied will not only give these long cycles or swings, but the daily and even hourly movements of stocks. By knowing the exact vibration of each individual stock I am able to determine at what point each will receive support and at what point the greatest resistance is to be met. Those in close touch with the market have noticed the phenomena of ebb and flow, or rise and fall, in the value of stocks. At certain times a stock will become intensely active, large transactions being made in it; at other times this same stock will become practically stationary or inactive with a very small volume of sales. I have found that the law of vibration governs and controls these conditions. I have also found that
21
Understanding Gann
certain phases of this law govern the rise in a stock and an entirely different rule operates on the decline. While Union Pacific and other railroad stocks which made their high prices in August were declining, United States Steel Common was steadily advancing. The law of vibration was at work, sending a particular stock on the upward trend whilst others were trending downward. I have found that in the stock itself exists its harmonic or inharmonious relationship to the driving power or force behind it. The secret of all its activity is therefore apparent. By my method I can determine the vibration of each stock and also, by taking certain time values into consideration, I can, in the majority of cases, tell exactly what the stock will do under given conditions. The power to determine the trend of the market is due to my knowledge of the characteristics of each individual stock and a certain grouping of different stocks under their proper rates of vibration. Stocks are like electrons, atoms and molecules, which hold persistently to their own individuality in response to the fundamental law of vibration. Science teaches that an original impulse of any kind finally resolves itself into a periodic or rhythmical motion; also, just as the pendulum returns again in its swing, just as the moon returns in its orbit, just as the advancing year over brings the rose of spring, so do the properties of the elements periodically recur as the weight of the atoms rises. From my extensive investigations, studies and applied tests, I find that not only do the various stocks vibrate, but that the driving forces controlling the stocks are also in a state of vibration. These vibratory forces can only be known by the movements they generate on the stocks and their values in the market. Since all
(continued)
great swings or movements of the market are cyclic, they act in accordance with periodic law. Science has laid down the principle that the properties of an element are a periodic function of its atomic weight. A famous scientist has stated that we are brought to the conviction that diversity in phenomenal nature in its different kingdoms is most intimately associated with numerical relationship. The numbers are not intermixed accidentally but are subject to regular periodicity. The changes and developments are seen to be in many cases as somewhat odd. Thus, I affirm every class of phenomena, whether in nature or on the stock market, must be subject to the universal law of causation and harmony. Every effect must have an adequate cause. If we wish to avert failure in speculation we must deal with causes. Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things. Faraday said, There is nothing in the universe but mathematical points of force. Vibration is fundamental: nothing is exempt from this law. It is universal, therefore applicable to every class of phenomena on the globe. Through the law of vibration every stock in the market moves in its own distinctive sphere of activities, as to intensity, volume and direction; all the essential qualities of its evolution are characterized in its own rate of vibration. Stocks, like atoms, are really centres of energy; therefore, they are controlled mathematically. Stocks create their own field of action and power: power to attract and repel, which principle explains why certain stocks at times lead the market and turn dead at other times. Thus, to speculate scientifically it is absolutely necessary to follow natural law. (cont.)
22
Understanding Gann
(continued)
After years of patient study I have proven to my entire satisfaction, as well as demonstrated to others, that vibration explains every possible phase and condition of the market. In order to substantiate Mr. W. D. Ganns claims as to what he has been able to do under his method, we called upon Mr. William E. Gilley, an Inspector of Imports, 1 6 Beaver Street, New York. Mr. Gilley is well known in the downtown district. He himself has studied stock market movements for twenty-five years, during which time he has examined every piece of market literature that has been issued & procurable in Wall Street. It was he who encouraged Mr. Gann to study the scientific and mathematical possibilities of the subject. When asked what had been the most impressive of Mr. Ganns work and predictions, he replied as follows : It is very difficult for me to remember all the predictions and operations of W. D. Gann which may be classed as phenomenal, but the following are a few. In 1 908 when the Union Pacific was 1 681 /8, he told me it would not touch 1 69 before it had a good break. We sold it short all the way down to 1 52-5/8, covering on the weak spots and putting it out again on the rallies, securing twenty-three points profit out of an eighteen-point market wave. He came to me when United States Steel was selling around 50, and said, This steel will run up to 58 but it will not sell at 59. From there it should break 1 6 points. We sold it short around 58 with a stop at 59. The highest it went was 58. From there it declined to 41 -1 7 points. At another time, wheat was selling at about 89. Gann predicted that the May option would sell at $1 .35. We bought it and made large profits on the way up. It actually touched $1 .35. When Union Pacific was 1 72, he said it would go to 1 84-7/8 but not an eighth higher until it had a good break. It went to 1 84-7/8 and came back from
there eight or nine times. We sold it short repeatedly, with a stop at 1 85, and were never caught. It eventually came back to 1 7. Mr. Ganns calculations are based on natural law. I have followed Gann and his work closely for years. I know that he has a firm grasp of the basic principles which govern stock market movements, and I do not believe any other man can duplicate the idea or his method at the present time. Early this year, he figured that the top of the advance would fall on a certain day in August and calculated the prices at which the Dow Jones Averages would then stand. The market culminated on the exact day and within fourtenths of one percent of the figures predicted. You and W D Gann must have cleaned up considerable money on all these operations, was suggested. Yes, we have made a great deal of money. Gann has taken half-million dollars out of the market in the past few years. I once saw him take $1 30, and in less than one month run it up to over $1 2,000. Gann can compound money faster than any man I have ever met. One of the most astonishing calculations made by Mr. Gann was during last summer [1 909] when he predicted that September Wheat would sell at $1 .20. This meant that it must touch that figure before the end of the month of September. At twelve oclock, Chicago time, on September 30th (the last day) the option was selling below $1 .08, and it looked as though his prediction would not be fulfilled. Mr. Gann said, If it does not touch $1 .20 by the close of the market it will prove that there is something wrong with my whole method of calculation. I do not care what the price is now, it must go there. It is common history that September Wheat surprised the whole country by selling at $1 .20 and no higher in the very last hour of trading, closing at that figure. (cont)
23
Understanding Gann
So much for what W D Gann has said and done as evidenced by himself & others. Now as to what demonstrations have taken place before our representative : During the month of October, 1 909, in twenty-five market days, W D Gann made, in the presence of our representative, two hundred and eighty-six transactions in various stocks, on both the long and short side of the market. Two hundred and sixty-four of these transactions resulted in profits ; twenty-two in losses. The capital with which he operated was doubled ten times, so that at the end of the month he had one thousand percent of his original margin. In our presence Mr. William D. Gann sold Steel common short at 94-7/8, saying that it would not go to 95. It did not. On a drive which occurred during the week ending October 29, Mr. Gann bought U.S. Steel common stock at 86-1 /4, saying that it would not go to 86. The lowest it sold was 86-1 /3. We have seen Gann give in one day sixteen successive orders in the same stock, eight of which turned out to be at either the top or the bottom eighth of that particular swing. The above we can positively verify. Such performances as these, coupled with the foregoing, are probably unparalleled in the history of the Street. James R. Koene has said, The man who is right six times out of ten will make a fortune. Gann is a trader who, without any attempt to make a showing, for he did not know the results were to be published, established a record of over ninetytwo percent profitable trades. Mr. W. D. Gann has refused to disclose his
(continued)
method at any price, but to those scientifically inclined he has unquestionably added to the stock of Wall Street knowledge and pointed out infinite possibilities. We have requested Mr. Gann to figure out for the readers of the Ticker a few of the most striking indications which appear in his calculations. In presenting these we wish it understood that no man, in or out of Wall Street, is infallible. William D Ganns figures at present indicate that the trend of the stock market should, barring the usual rallies, be toward the lower prices until March or April 1 91 0. He calculates that May Wheat, which is now selling at $1 .02, should not sell below 99, and should sell at $1 .45 next spring. On Cotton, which is now at about 1 5 level, he estimates that after a good reaction from these prices the commodity should reach 1 8 in the spring of 1 91 0. He looks for a corner in the March or May option. Whether these figures prove correct or not will in no way detract from the record which W. D. Gann has already established. William Delbert Gann was born in Lufkin, Texas, and is thirty-one years of age. He is a gifted mathematician, has an extraordinary memory for figures, and is an expert Tape Reader. Take away his science and he would beat the market on his intuitive tape reading alone. Endowed as he is with such qualities, we have no hesitation in predicting that, within a comparatively few years, William D. Gann will receive recognition as one of Wall Streets leading operators. Note: Since the above forecast was made, Cotton has suffered the expected decline, the extreme break having been 1 20 points. The lowest on May wheat thus far has been $1 .01 5/8. It is now selling at $1 .06 1 /4. END
24
Currencies & Metals
The Vault
GOLD
The chart below gives us an interesting look at the % change in gold price per currency. While numerous factors can be attributed to the fluctuations in the price of gold, we believe a large contributing factor is the value of the dollar itself. As the dollar declines, the value of gold, in that currency will rise. As noted from Mineweb.com : "The dollar price of gold is not a good indicator of where it really stands. The U.S. investor in particular generally looks at the gold price in U.S. dollars, but in reality should be looking at the price in Euros as the recent apparent price appreciation has been mostly due to dollar decline."
Chart 26
25
A look at both Gold and the Dollar : we can see them in opposite trends. A break in the trend for either and we could also expect to see a change of trend in the S&P.
Chart 27
Chart 28
S&P 1yr
Chart 29
26
Volatility Index VIX / VXO Risk Warnings

The Weekly VIX chart shows a wedge with the slopes of the sudden change in volatility getting steeper but shorter in duration. If they were to be getting shorter but not as steep we could see this as good news with the system becoming more stable as it decayed. Instead we have 'shock' reactions. This is a bad omen for stability - regardless if an up or down market follows.
First and foremost one must take in to consideration everything that has been presented so far. The picture that is being painted is not one of a 'roaring bull market' or anything Assessment close to it. Taking what passes as 'news & information' in the main stream media, we would think that things, while not perfect, are heading in the right direction. We here at TRIGGER$ are unbiased towards any market movements - up or down we just want to know what is what. If anything we would like to be able to report all 'rainbows and butterflies' all the time, and we would, IF that was what was occurring. However from what we have given you here, it is not that difficult to see things are setting up for a major over-all market 'failure', 'contraction', 'correction', 'reversal', or whatever you wish to label it. Our perspective here is it that it will in fact be a continuation of a 'bear market' that started in 2000. We have shown why this is. The information gleaned from our publication needs to be taken in to account as a whole when attempting to identify 'RISK' and what is most likely to happen next. Our analysis describes a most likely scenario of a 'rolling top'. This process is a Topping Process and it is an indication of a market reversal. As the name 'rolling top' describes we are not expecting a sharp drop-off. There will be several sell-offs and retracements as the top is put in. This can make for tricky trading even if you are aware of what is going on. Each sell off will seem like it is the 'big one' and the 'top' is in, and each retracement will look like it is setting up for a Bull run. The pattern will be rounded with the outcome having us looking at lower lows than that of the last 2 major sell offs. This overall market direction and all its factors and implications need to be considered in your daily trading.
RISK
Chart 30
27
The daily VIX shows the banding of the 50, 1 00 and 1 00 day VIX moving averages. Tightening bands are an indication of a pending break in pattern, whether up or down. The daily VXO shows that we have Divergence between the VXO and the S&P500 Index. This is negative but more telling is the pronounced wedge. Again, this doesn't tell us what direction the market is going to head but rather there is RISK that a strong move will occur.
Chart 31
Chart 32
28
The following are parts of a transcript from the Glenn Beck Show originally aired March 25th, 2011. A Google of Glenn Beck & Edward Griffin will give you several options to watch the original broadcast. As the original show is 40mins long, we can not include all of it in its entirety. We have selected some of the more pertinent discussion for your information and recommend you view the whole broadcast.
The Fed Exposed
During the financial crisis, most Americans have heard a lot about the Federal Reserve, but most Americans don't know anything about it -- how it works, what it is, who even runs it or how it's run. They know that it buys our debt. It sets up interest rate. It has a lot to do with the economic well-being of our nation. G. Edward Griffin, he is author of this book."The Creature from Jekyll Island." It is a fascinating book on the Fed. The author is one of our guests tonight. We're going to start at the beginning. We're going to talk a little bit about what they're doing now, but I want you to know, we're just going to start at the beginning and, really, we're going to give the history of the Fed as told by the Fed -- the happy tale on their own Web site. Are you ready for this? It's great. Here we are. Here it is. Watch this. Quote -- on their Web site -- "After Alexander Hamilton spearheaded a movement advocating the creation of a central bank, the first bank of the United States was established in 1 971 ." You see how great this is? The Fed was started by a Founding Father. No. No. No, it wasn't. No. The first bank isn't the fed. So, what does it have to do with anything? Well, nothing. But they just wanted to throw a Founding Father's name in there.
The bank's charter ran for 20 years and because it took about 20 years before Americans realized, hey, that Bank of America thing, that's not working out. They've got way too much power and influence, just like all the other Founders said, a proposal to renew it failed.
Now, back to happy story from the Fed's Web site. Quote, "The situation deteriorated to such an extent in 1 860, a bill to charter a second bank of the United States was introduced in Congress."
Second bank was very much like the first, except bigger -- about 3.5 times bigger. It's always that way, isn't it? Anyway, the charter lasted 20 years before people went, what are we doing? Americans realized it wielded too much power and influence and proposal to renew it also failed.
Then according to the Fed Web site, they got rid of the nasty charter thing and will of the people. Quote, "In 1 907, a severe financial panic jolted Wall Street and forced several banks into failure. Many Americans thought their banking structure was sadly out of date and needed major reform."
(cont.)
29
The Fed Exposed

The first draft of the Federal Reserve Act was called the Aldrich bill because of the guy who wrote it was named Aldrich and it failed. President Taft refused to support it. And then it underwent some surgery and reemission as the Glass-Owen bill and, of course, got a signature from progressive Woodrow Wilson in 1 91 3. Well, that's the Fed's story. It was introduced in 1 907. And in 1 91 3, it finally came to be. Isn't everything great in sunshine and lollipop world?
(continued)
saw little orphan Annie, Daddy Warbucks was named after Warburg. These are the men that represented onefourth of the entire wealth of the world. You think we've got a problem with wealth now? Those guys -- one quarter of all the money in the world. The Morgans, the Rockefellers, Warburgs, and Rothschild all in one room.
The Federal Reserve Act wasn't drafted in Congress. It was drafted on a private island off the coast of Georgia in 1 91 0. Here is the island, Jekyll Island. And it was drafted under great secrecy.
Jekyll Island was retreat for billionaires like William Rockefeller and J.P. Morgan. And in 1 91 0, Senator Nelson Aldrich, the Republican whip in the Senate and the chair of the National Monetary Commission, sent his private railroad car to the New Jersey railroad station where he and five other men were instructed to come one at a time and everybody pretend they just didn't know each other. Aldrich who was the guy -- remember, he, wrote the original bill -- he was a business associate of J.P. Morgan -- oh, and the father-in-law to John D. Rockefeller, Jr. So, there is no special interest happening there. There was also Abraham Piatt Andrew, assistant secretary of the treasury, and Frank Vanderlip representing William Rockefeller. Henry Davidson and Benjamin Strong with J.P. Morgan. And Paul Warburg --he is a partner -- he was a partner at Kuhn, Loeb & Company. He was representing the Rothschild banking family. Oh, he's going to talk about the Rothschild now. He actually is an interesting character. If you ever
These guys were all competitors. According to G. Edward Griffin, who we will talk to in a minute, they all came together to form a banking cartel so they didn't have to compete against each other. He says it was like an oil cartel or a sugar cartel, but this cartel actually went in partnership with the government. I mean, how great is that, huh? It's kind of like the drug cartels in Mexico. Wait, I didn't say that out loud, did I?
So, for more than a week, these men sat around there. And they sat around this big table and they hammered out all the details of what became the Federal Reserve System with five objectives. How many of these do you agree with?
One -- to stop the growing competition from the nation's newer banks. That doesn't sound good. Two -- to obtain franchise to create money out of nothing for the purpose of lending. That one doesn't sound good either. Three -- to get control of the reserves of all of the banks so the reckless ones wouldn't exposed to currency drains or bank runs. Oh, that's the charity part. Oh, gee, Beave, thank you so much.
(cont.)
30
The Fed Exposed

Then to shift the losses from the bank owners to the taxpayers. It just gets better and better for you and me, doesn't it? No. Again, the answer is no. And then, finally -- to convince Congress the purpose was to protect the public.
Well, they started the Federal Reserve with no money, just a checkbook. The government could go to the Fed and obtain instant money without having to consult the taxpayer. What a country!
(continued)
Money is created out of nothing and then given to the government. It's loaned by the banks to you and me and then we pay interest on it and it goes to them -interest on nothing. Again, the Fed is nothing more than a cartel like OPEC, except it's a money cartel. And this cartel brought the federal government in to a partnership, where you and I have to answer to it.
And it's only to enforce the rules of the cartel, you know, to bring those into agreement with the federal laws to protect you. It operates under the protection of the federal government and the government has virtually given a monopoly to create the nation's money supply. There are no elected officials. There's virtually no accountability to anyone. The Fed is privately owned but by whom? Good question no one knows. We can't open their books and we don't know who owns them. Really? Now, here's an interesting spin from the Federal Reserve board Web site. "Although they're set up like private corporations and member banks hold their stock, the Federal Reserve banks owe their resistance to act of
Congress and have a mandate to serve the public." Therefore, they're not really private companies, but rather owned by the citizens of the United States. Well, that's fantastic. Let's all go to the bank and make a withdrawal. Or how about we lower interest rates at the bank we own. Yes. The next question and the answer on the site is -- are Federal Bank employees considered government employees? Answer? No. Employees of the Federal Reserve Bank are not government employees. They're paid as part of their expenses. They're employee and reserve bank. Also, it's like charity. That's interesting. So, it's not really private. It's not really public. It's just this mysterious, magic money dispenser that buys all of our own debt, sets our interest rate, sets our economic policy, loans billions of dollars to other countries, helps us borrow billions of dollars from other countries and then prints money out of free -- just out of thin air and there's no drive- thru window, but everything else sounds magical, doesn't it? Yes. I have news for you -- there is a lot of people when you start talking about the Federal Reserve, they start going into -and then, the Bilderbergs, along with Colonel Sanders, got together and they start going down crazy roads. There's no reason to do it. It's crazy enough. Let's talk about just the facts, shall we? Let me introduce you to a couple of guests because I think we have -- I think we have some interesting times ahead. And I have a feeling the audience is waiting. G. Edward Griffin is the author of the "Creature from Jekyll Island." And Mike Calabria is the director of financial regulation at the Cato Institute.
(cont)
31
The Fed Exposed

BECK: Edward, did I get the story right? And what did I miss? GRIFFIN: You got the story very, very right. A lot of very interesting details, of course, we don't have time for in a program like this, but the essence of it, you got exactly right. BECK: OK. What did I miss that is important? GRIFFIN: Well, there are two things. First of all, you asked if there was anything that was left out. As I said, the important items were there but there's one thing that you might want to explain to the audience. And the reason for the secrecy that you mentioned, why were they concealing their identities? Why did they deny they went to this meeting? And the answer is because if the American people had known that this bill, which was supposed to protect the American people from the big bad bankers, was actually written by those same bankers, well then the scam would have been out in the open. And that's why they had to keep the whole thing secret so many years after the meeting took place. BECK: OK. Edward, if people had to know one story of the Federal Reserve that would turn their hair the color of mine, what would it be?
(continued)
BECK: When they said -- when they on Capitol Hill -- when Bernanke said, we will not monetize our debt. I got on the air that night and said, he's already lying, but -GRIFFIN: That's all they know how to do. BECK: Right. And they monetized the debt, but they're still claiming -- I don't know if they are now, but they were a few months back that they're -- they are still claiming. CALABRIA: They're still saying we're not going to monetize -BECK: But they are. But they get away with saying, we're not printing money, we're just digitizing it. BECK: Do you believe that we are headed for real tough times? CALABRIA: I think we -- I think we are headed for a real tough time and I think we could potentially -- you mentioned, you know, a bad version of Carter -- we have the potential to be back in the '70s sort of situation. Remember the word "stagflation" went away for a while, but we might be looking at a situation again where you're happy with high inflation and high unemployment. BECK: We'd be like, oh, wow, it's only as bad as Jimmy Carter years. That's fantastic. Edward, your opinion on can we get rid of the Fed? Is it possible? GRIFFIN: It's technically possible because the Federal Reserve was created by an act of Congress and it can be abolished by an act of Congress. But what must happen before Congress has the backbone to do that? There has to be a complete change in
(cont)
GRIFFIN: That would be what I call the Mandrake Mechanism. That's the process by which money is created out of nothing and put into the economy and withdrawn from the economy. If that doesn't cause your hair to turn white, I don't know what it is.
32
The Fed Exposed

GRIFFIN (cont): Washington because, by and large, the people that are in office today are very much beholden to this creature and are not going to do it. BECK: If you have people who, like you say, can -- can control through monetary policy, you'll never get those people out. You'll never make that change because they would control too much of the money. I mean, they could make the pain enormous. Am I wrong in that? GRIFFIN: Well -- that -- no, you're quite right. In fact, we have the precedent for that during the -- the fight between President Jackson and the Second Bank of the United States. The head of the Central Bank, which was that version of the Federal Reserve today, his name was Nicholas Biddle. And he fought back exactly that way. When Jackson tried to generate support for getting rid of the Second Bank, he (Nicholas Biddle) said, "I will pull the country down." He said, "The nation will fall, the people will fall, but the bank will not fall." That was his exact quote. And he practically succeeded in doing that. So you can be sure in a contest of this kind where we're challenging the Federal Reserve power, there's no question in my mind that they will pull out all the stops and try and ruin the economy and then blame it on the fact that we were challenging the Federal Reserve. BECK: Edward, do you -- do you have any point of context here on the printing of money? They're now talking seriously about printing money as a way out of this unsustainable debt.
(continued)
GRIFFIN: Well, that's always been their theory. They're just talking about it more openly now. And that's -- as I said a moment ago, that's their only trick. And so we can anticipate that's the trick they're going to play. But in terms of inflation, I am not quite as optimistic about the inflation rate or as impressed by this two percent or three percent figure. I believe that the government is not telling us the truth about the true inflation rate. BECK: You think? (LAUGHTER)
GRIFFIN: I don't think I'm alone in this, obviously. But what is the true rate? I believe, from what I can see, that it's up -- it's pushing up to about 20 percent right now. It may be not that high, but that certainly is the rate at which gold is expanding and, historically, that's always been a very accurate measure over a long period of time of true inflation.
CALABRIA: Well, you remember during the early 80s, the prime rate got over by 21 percent. And so, one should start with we're going to see higher interest rates either because of inflation and/or the Fed having to raise rates to fight inflation. BECK: ... how do you not stop the heart of the economy if you've got, let's just say, 25 percent interest rate? But nobody has an answer on that one. So how would you stop -- how would you CALABRIA: You throw the economy into a recession. That's what happened in the early 80s. We had a very deep -fortunately, it was a relatively short
(cont)
33
The Fed Exposed

CALABRIA (cont): recession, but it was a very deep and painful recession we had in the early 80s, and that was with the federal funds rate of just around 21 percent. (cont)
(continued)
BECK: It only works if you have a free market system and people who know -- who are willing to experience the pain and know how to go out and start business. END
Traders Mentor
TA & Trading Strategy Education
Advanced Channel Theory

Channels are one of the easiest TA methods to use. Not only do they provide a good visual to trade by, they will also often 'hold true' and offer reliable information for trading decisions. The most common use of channels would be two parallel lines containing the price action. This is then sometimes divided up - with another parallel line marking the mid-way point between the two original Bounding Lines, as well as others dividing the original space up in to Fibonacci Levels. Chart 33 below demonstrates some of these common applications.
Weekly
original channel 50% level fibs 38.2% & 61 .8%
Chart 33
34

(continued)
Chart 34 to the right shows our original chart 33 - we removed the fib % and the 2nd set of channels to simplify our example. We have also extended our channels, including the middle 50% line. Note how they act as resistence and support when the price / time plots reach them. Here we can see our original channel in bold. We have added 1 channel below and 2 above, each eaqual to our original channel in width. Note how our new channels also act as resistence and support. We are able to place these ahead of the market thereby giving us some future reference.
Weekly
Chart 34
Weekly
Chart 35
Weekly
We have now added the 2nd set of channels from chart 33 - extended them and added additional channels using the same process as before. Note the 'grid' of support and resistence levels that is now created.
Chart 36
(cont)
35
Below we have continued the process. Midway or 50% lines have been added back in (blue). Pink horizontal channels have been added - you can see all the orginal channels in bold.
Weekly
(continued)
Note that as of Sept. 201 0 all the channels would be laid in giving you some guidance to the current date (and beyound). While the chart may look a bit 'messy' and a little fine tuning could be in order, zooming in to an hourly view (chart 38 below) we can clearly see how our channels set up months before contiue to hold true.
Hourly
Chart 37
Chart 38 : this is chart 37 weekly view zoomed in to an hourly view. Note channel lines continue to offer support and resistance.
Chart 38
END
36
Open Forums
Letters to the Editor Readers Comments Discussions
This is our first issue - technically we are still in 'BETA' - we are working out the bugs and development of the Publication. We hope to have an Official Launch of the first issue by fall. This will also include a Website that is updated daily with pertinent information and to include much more than can be offered in print alone. Our aim is to provide Real information that can be used in your trading and investment decisions. Our sources go well beyond the usual main stream and hopefully this can help to provide you with a unique perspective of the markets, our economy and the world at large. As this is the first issue being seen by the public, we are very much interested in your thoughts on what we are trying to do here. Please feel free to email us with any acclaims or criticisms you may have. Let us know what you would like to see - what would be valuable and useful to you? Our vision moving forward includes room for thoughts and ideas from our readers - please share. triggers@GordonTLong.com
A Note From TRIGGER$
We would like to acknowledge and thank the following sites for thier contributions. FreeStockCharts.com chart # 1 , 1 525, 33-38 Dshort.com chart # 2, 1 2 Data360.org chart # 3, 4, 5, 6, 7 Shadowstats.com chart # 8, 9 Calculatedriskblog.com chart # 1 0 HaysAdvisory.com chart # 11 , 32 Goldprice.org chart # 1 0 Kitco.com chart #27 Barchart.com chart # 28 StockCharts.com chart # 30, 31

TRIGGER$ (NOFX) May 2011

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

TRIGGER$ (NOFX) May 2011

Transféré par

Droits d'auteur :

Formats disponibles

Issue : BETA-MAY Volume : 2011 -Pilots

Economic & Technical Analysis for the Active Trader

The Fed Exposed

Economic & Technical Analysis for the Active Trader

Economic & Technical Analysis for the Active Trader

Hybernation Over? The All Seeing Eye

Traders Mentor Open Forums

Need To Know Technical Analysis

Currencies & Metals

Part 1 : Introduction to a New Methodology

The Fed Exposed

Economic & Technical Analysis for the Active Trader

intermediate longer term

Risk Analysis Fundamental Analysis

The All Seeing Eye

The Illusion of Money

DOW should be around 500

Inflation and Interest Pressures

Real (After Inflation) Interest Rates

Current View 2000 - 2011

YOUR ADVERTISEMENT HERE

Need To Know Technical Analysis

3 Reverse Head & Shoulders? 2 1

Ellipse - Rounded Top

Part 1 : Introduction to a New Methodology

By Richard D. Wyckoff, Ticker and Investment Digest

Currencies & Metals

Volatility Index VIX / VXO Risk Warnings

The Fed Exposed

The Fed Exposed

The Fed Exposed

The Fed Exposed

The Fed Exposed

The Fed Exposed

Advanced Channel Theory

original channel 50% level fibs 38.2% & 61 .8%

Advanced Channel Theory

Advanced Channel Theory

A Note From TRIGGER$

Vous aimerez peut-être aussi