18 Yr High? Who's Excited?!?!?


#1

In David’s last video he shared his thoughts on there being an 18 year high soon in the NDX, which wouldn’t bottom until around beg- to mid-2021.

He shared that his trigger for knowing if the top is in or not will be the 20 Week FLD.

What about you? What would be your trigger? Would you wait for a lower level trend to form from lower lows/lower highs (10 Wk, 20 Wk, 40 Wk)? Are you more prone to using VTLs?

Would you trade the index or some of it’s components? The top 10 components make up a little more than 50% of the index: https://indexes.nasdaqomx.com/docs/FS_NDX.pdf

This is a good time to be alive. Playing this right can turn people into millionaires or millionaires into multi-millionaires.

What are your thoughts?

Best,

LB


#2

Hi guys I see that there is going to be 2 sided action on equities ahead. Risking the same amounts, and to stick to the trade plan and counts, FLD trading strategy and humble targets. Buying puts and expecting the market to roll is a lottery trade in my short experience. The commonality in the markets is also a bit of an expert area, as is the fact that peaks are rounded, and the last of the retail money is still piling in I’ve read. Macroeconomics is also a key area that decides a peak, isnt it? I see the numbers and earnings are not a tell all signal of the rally being over, and alternatively, the trade wars are attempting to test and destabilize the market.

I will probably look at the shorter waves that David has looked at in the past for clues when to short. Projections not being met are a good start. Large downmoves that happened in January are not easy to catch. There was a liquidation and test of the market, which Im assuming most people were caught unaware, as it was just passed recently in a new equity high. It took 9 months to get back. Is there new money in the market,? Maybe.

Also, watching for traps is a great idea. When new equity highs are made and price sees rejection and rebalancing immediately. And, the longest time frame appears to be playing, as we seen in January, they are there in the market probably waiting to strike again. I would say, the longest time frame needs to break the 20 FLD after flirting with it for support for a few days. Or a balancing around that area, then a breakout lower could be a signal to short. Holding for a projection on that FLD would be a tantalizing opportunity to see higher percentage gains than normal, as you would see in Grafton’s material. Its not a bad strategy. But still trading the FLD trading strategy around the time a large peak forms is also going to produce more winners than losers, assuming your count is right and you dont jump too early for a short trade.

Have you ever thought about notnusing a chart at all? Its a wild idea, but watching the market tape is a great idea. For spotting the peak, watch for intraday lower lows as you suggested. Especially on the 2nd and 3rd days of a particularly large down move. Then the next week will see more sellers, where you would wait intraday for peaks to form on equities, or complete breakdowns of intraday cycles as well as watching for easy targets of resistance. Why wait for more evidence if you see it forming with huge price rejections at resistance and support being nonexistent? I think putting the trade on at intraday projections being unmet on the long side is an apt approach to reading the tape for a short. It maybtake several tries but you could also structure your position slowly over several days this way instead of piling in on weekly puts.

Perhaps the tape is going to be the first indication of a peak forming, but this requires watching the market everyday and remembering prices, watching value and focusing on projections of both long snd short targets.

Did I miss anything? Let me know.
Thanks
Derek


#3

I’ll just be trading as normal as a Hurstonian. Its nice to have an 18 year peak approaching as its been an epic bull run of course but the money is to be made, as always, in the shorter waves and the higher yield, IMHO.

What I will be interested in is how the media/politicians and general public rationalise and come to terms with a market that does not go up anymore. Now that will be something!

Dave


#4

Hi David yeah that sounds good man


#5

David,

What’s your favorite cycle length to trade on equities?

Best,

LB


#6

Levy,

80 day and its closest degree neighbours. Although I don’t trade individual equities. If I did want to do that I would look at the phasing of the averages and pick the issues with the highest volatility relative to the index. Probably.

Dave


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#10

I agree woth this chart’s implications.
Derek