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TECHNICAL ANALYSIS IN EVENT DRIVEN MARKETS

TECHNICAL ANALYSIS IN EVENT DRIVEN MARKETS. Jeff Greenblatt Futures Panel NY Traders Expo. FUNDAMENTALS VS. TECHNICALS. Fear and Greed Supply and Demand Everything you need to know already represented on the price chart

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TECHNICAL ANALYSIS IN EVENT DRIVEN MARKETS

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  1. TECHNICAL ANALYSIS IN EVENT DRIVEN MARKETS • Jeff Greenblatt • Futures Panel • NY Traders Expo

  2. FUNDAMENTALSVS. TECHNICALS • Fear and Greed • Supply and Demand • Everything you need to know already represented on the price chart • Technical analysis is underlying structure that represents human emotions

  3. Fundamental Picture • Earnings reports aids in identifying promising sectors and/or leading stocks in those sectors • Economic data always lags great trading setups by weeks or months (gov’t announced recession a year after the fact) • Neither offers timing precision for good trades (Income statements or economic data)

  4. News Events Drives Markets • Common misconception • Reason: technicals not well understood • Media has to identify some reason to explain market action • Example: High Jan unemployment number drops markets then Feb number market rallies or when major company announces layoffs

  5. TECHNICALS ALWAYS DRIVES MARKETS • Price, time and volume drive markets • When price and time cluster, news events manifest • Can never predict news event but always rely on pattern on the chart • Limited only by your understanding of the chart • If you understand technical picture you don’t need to turn on television

  6. TECHNICAL METHODOLOGY • Pattern recognition • Fibonacci, Lucas and geometric time cycles • Elliott wave, Fibonacci retracement and expansions • Support/resistance and angles • More advanced methods make patterns easier to recognize

  7. HUGE BANKING OPPORTUNITY • 2.618 Extension leads to 10 week rally

  8. DOW 233 TD/BEAR=LEHMAN • Lehman declares bankruptcy

  9. SETUP PRIOR TO LEHMAN • Polarity trading setup right after Labor Day

  10. TARP 233 TD/NASDAQ TOP • House votes on TARP

  11. FINAL TARP VOTE OCT 3 • Intraday excellent Elliott setup

  12. IS IT COINCIDENCE? • Bear market started on separate tops for Dow and NASDAQ • Lehman event 233td to Dow top • Tarp vote 233td to NASDAQ top • Each key event in market collapse • Both tied to important underlying cycles

  13. SENATE REJECTS DETROIT • Overall Elliott ABC where C=1.618*A

  14. SENATE INTRADAY CLOSE UP • Emini NQ turns on 261- 5 minute window

  15. DOLLAR TOP 2008 • Top on 1.27 expansion/163 hour cycle

  16. DOLLAR TOP/MARKET BOTTOM • Dollar/market inverse relationship • Very precise turn 2 days before market • With all news events, Geithner rumor creates end of crash? • If that were really the case, how can they turn on him so soon?

  17. SUMMARY • Patterns on charts underlying structure financial markets • Events manifest at ‘right time’ • Always use sound technical methods to trade • Many can be traded without knowledge of event • Not all ‘ostensible events’ tradable but are tied to underlying structure:Lehman

  18. CURRENT SITUATION

  19. LONG TERM DOLLAR

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