Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
patrick@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
The chart below is the 5 minute bar chart for the Dow Jones Average symbol INDU for January 22, 2008. This is our third chart showing the Moon lines in this market. We have shown three previous day’s charts with the Moon lines to show that the Moon planet lines create support and resistance price levels that work consistently. On the chart below the letters A, B, C, D, E and F identify pivots that formed on one of the Moon lines.
January 22, 2008
Part 3: Dow Chart and Moon Lines
Part 2: Dow Chart and Moon Lines
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
patrick@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
The chart below is another 5 minute chart for January 18, 2008. On this chart we have again added the Moon planet lines. You can see on this chart that the Moon planet lines have again provided good support and resistance price levels. The letters A, B, C, D, E, F, G mark turning points made against a moon line.
January 16, 2008
5 Minute Dow Chart and Moon Lines
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
patrick@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
The chart below shows a 5 minute bar chart for the Dow Jones Industrial Average. On this chart I have added the MarketWarror Planet Lines indicator. This indicator is drawing the lines for the Moon. The day on this chart is January 16, 2008. The planet lines work very well in the stock indexes when the markets are moving sideways which they did today. On this chart I have placed a letter at each point where the DJIA made a swing top or bottom. The Moon Lines provided good support and resistance target price levels for most of the swing pivots through the day.
January 10, 2008
Why I Don’t Trade in The After Hours Markets
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
patrick@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved
Many times I have written that I will not trade in the after hours markets which trade after 15:00 (3:00pm) local time. In the after hours markets the trading volume us very low, in fact many times the trading volume is too low for the automated electronic trading system to match trades at a price that is near the previous trade. This can cause a trade to be filled far away from the previous trade and can cause a large quick loss. The chart below is for Apple Computer symbol AAPL. This is a high volume stock during normal trading hours. On the chart below arrow B points to the volume in the after hours trading session. Notice the volume has dropped very low. Arrow A points to a box that circles prices that are far below the previous trade. At first glance this looks like a series of bad ticks but they are not. These large bars identified by the letter A are caused by someone trading in the after hours market that most likely used a market-order and the automated trading system could only match their trade at a price far below the previous trade. The traders that got caught in this situation were probably watching the market trade around 177.5 and then placed a market-order and to their shock the order was filled around 172. This is not uncommon in low volume after hours trading and there is nothing a trader and do to get their broker to reverse that trade because the trade is far and legitimate according to the electronic trading system rules. This is why I do not trade in the after hours markets and I do not recommend it.
January 9, 2008
Trading YM on Jan 09 Using Aspects and Stop and Reverse
Below shows one chart for the $5 per point Dow mini symbol YM H8. I added the MarketWarrior aspects that included the moon to this chart and found 2 that occurred during the trading day. These aspects were, moon semisquare Venus labeled A, and moon quincunx Mars labeled B. I also added the MarketWarrior stop and reverse indicator set to trigger on the “close” not the “high low”. This market today moved choppy-downward until the last two hours of trading. The two aspects labeled A and B both correlated with small bottoms on this chart. I have drawn arrows from the aspects to the corresponding small bottom. The stop and reverse indicator made a small gain from C to D, then a small loss from D to E and then a small gain from E to F. At point F the stop and reverse indicator signaled a long trade that ran until the end of the trading day. I do not hold trades after the main large New York market stops trading at 15:00 (3:00pm) local time so I ended all positions around the letter G. For January 9, 2008 this made 4 trades with 1 loss and 3 gains.
January 1, 2008
Major Events That Will Effect The Economy in 2008
Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
patrick@MikulaForecasting.com
Copyright © 2008 by Patrick Mikula All Rights Reserved.
Major Events That Will Effect The Economy in 2008
The biggest trend that will effect the U.S. economy in 2008 is the emergence of new foreign financial exchanges (Bourse) that will begin to syphon business from the U.S. exchanges and reduce the demand for U.S. dollars. This will not be recognized by most analysts as the cause of the economic changes in 2008 but it will play a major role in the price direction and price level of both financial instruments and commodity prices. For the past 50 years New York and London have been the unrivalled economic centers of the word but that is now changing. In 2007 there was a lot of talk about the Iranian Oil Bourse for trading in oil and natural gas in Euros. The preliminary trading on this exchange has been delayed several time but is currently scheduled to start trading natural gas in Euros some time in the first quarter of 2008. Crude oil will be traded on the Iranian exchange in the future but there is no schedule for the start of oil trading. Iran sells about 5% of the international oil supply. The Russians have talked of starting an oil exchange and possibly issuing a version of the Russian Ruble that would be redeemable for oil. The current schedule for the Russian St. Petersburg stock exchange to start oil trading is February 1, 2008. Trading will start for select large oil buyers and then will expand to all purchasers of Russian oil by June 2008. The Russians sell about 15% of the international oil and this trading will be done in Russian Rubles. The Dubia Gold and Commodities Exchange now trades Gold, Silver, Steel and currency future contracts and will start trading contracts for plastic in January 2008. The trading methods in Dubia are different from the U.S. due to financial requirements of the Islamic Sharia and the exchange is still small by U.S. standards with Gold futures at about 2500 open interest and 75,000 volume per month. In China the Shanghai Futures Exchange will start trading Gold futures in January 2008. This exchange is not open to foreign investors but it still plays a role in setting world prices.
What will the results of this mega-trend be?
1) The demand for U.S. dollars will continue to fall in 2008 causing a declining U.S. Dollar. The U.S. Dollar Index is currently around 77 and I expect this index to oscillate downward through 2008.
2) There will be a surplus of Dollars looking to buy something. This will cause foreign companies and countries to buy into U.S. companies, U.S. infrastructure such as power plants, toll roads, ports, and any other real asset or commodity they can buy in the U.S.
3) For the retail consumer the dollar decline will cause higher prices. The price of food will increase through 2008. As the dollar declines large American food companies will start to sell there food internationally to maximize their profits. This will add to the domestic prices as supply moves outside the U.S. The price of gasoline will reach an average price per gallon of $4.50. The average for premium gasoline will reach around $5.50 per gallon.
4) The price of any commodity that functions as a place to park money to escape the declining dollar will increase. The two most common are gold and silver. Both these commodities will continue their bull markets 2008.
5) There are two ways to look at interest rates that need to be looked at separately. One is the interest rate paid by the U.S. Government on U.S. Treasury debt. The second way to look at interest rates is the private sector interest rate on debt and the inflation rate on products. The U.S Government will do everything it can to hold down interest rates that it pays in U.S. Treasury debt. I expect the US Government to use every tool it has to sell its debt at the lowest possible interest rate. The private sector interest rate paid on debt by corporation and individuals will rise through most of 2008 and the price paid for goods will also rise. The US government does not include food and energy in the inflation numbers such as the CPI so I don’t know how much of this increase will be reflected in government statistics.
6) One item that foreign money will not buy in 2008 is financial products based on bundled home mortgages. Part of the mortgage backed security problem that is occurring now is that a huge amount of the bundled home mortgage products were sold internationally. Without foreign money it will be harder to get a home mortgage in 2008 than it was in 2007. The real estate market will continue to see a large number of foreclosures because people will not be able to refinance without foreign money.
Where should we look for opportunities in 2008?
2008 is a political year with a presidential election but there is no incumbent running for reelection which is unusual. The history of presidential election years is that the economy stabilizes and there is no major event. I believe 2008 will reflect this historical pattern. We will see bull markets continue in metals and food but we will not see any major breakout markets. The markets will stabilize and oscillate upward or downward. They will not have fast volatile breakouts. I expect the inflation rate to continue much as it did in 2007. Inflation will continue but it will not become hyperinflation. Gold should reach $1000, and Silver should reach $25 per ounce. Grains will be defined more by large swing than by a bull market. Look for large swings in the grains. The same will be true for interest rate future prices look for large swings rather than a bear market. Good markets to trade in 2008 will be day trading the gold, silver and stock index futures. Trading the seasonal patterns in the grains will work well in 2008 and look for swing trading to work best on the daily chart in interest rate futures and currency futures.
