by Rasool Cunningham
Chief Trading Editor
Philadelphia, PA (DYDD)
After going up for six years in the face of constant ZeroHedge articles, and every bear in the woods rooting against it, this stock market seems invincible. I get that, but we know stock markets aren’t invincible, don’t we? We know what happens when people start thinking stocks are invincible… don’t we? Maybe this time is different? Maybe all these metrics saying stocks are overvalued are wrong. Maybe Fed Chairperson Janet Yellen is wrong. Maybe I am wrong. There’s a lot of information out there. A lot of “metrics” and “data points.” The thought is some of this stuff works sometimes because: “even a broke clock is right twice a day. With all these broken clocks they’re bound to be right once in a while.” Well, what’s not a broken clock are the traditional metrics used for stock valuation. Looking at some, one could conclude that stocks are overvalued. Take Warren Buffett’s favorite stock market valuation tool: The Market cap to GDP ratio. Dshort wrote about this on May 1st. It says stocks are overvalued. Another great stock guy, Peter Lynch says this about stock valuation:
Long term bonds currently yield 2.93%. The $SPX dividend is now yielding 1.93. I didn’t need to do the math to see that this indicator says stocks are overvalued. But I did the math anyway, and it said long term bond yields exceeded the $SPX yield by 33%. More than five times Mr. Lynch’s caution threshold. But that’s ok, It points to tremendous opportunities.
In the coming days, months, years I’ll be trying to capitalize on these tremendous opportunities. First and foremost, with my own trading of currency markets. But since no market trades in a bubble, and all other markets effect, and are effected by the currency markets; I analyze stock futures, leading stocks, bonds, gold, oil, and nearly anything with a price. I’m doing the work anyway, I mine as well try to capitalize on this work any way possible. I think I’ve found a way. This isn’t new for me. I’ve failed in past attempts to capitalize on my analysis. I think I failed because I wasn’t offering enough value. Maybe I was too one-sided, or just not enough dimensions.
I’m a price guy. So nearly all my analysis is price based. We know price, time, and volume form the stock technical analysis bedrock. For a truly comprehensive approach you need a solid understanding of all three. I’m proficient in volume analysis (although if I come across a good volume heavy analyst I’ll try to recruit her to add to what we’re doing here.) But I’m lacking in the time department. I understand the basic concept, but I don’t know how to apply the best available tools for time analysis, which I think are Elliot Wave theory and Gann theory. I have a new friend who is a time analyst who is talented in the application of these tools. I think we make a good team. So, along that “capitalizing on opportunity” theme:
Starting today she and I are offering a monthly subscription service here on DYDD. June 2015 is free.
It will consist of her full understanding of Elliot Wave and Gann theory. She will build an archive of lessons from her understanding. I will expound on the lessons, as well as apply my price, volume and fundamental analysis to her time analysis. She has a lot to offer. I think I have a lot to offer also. So we’re combining forces. It will be a simple password protected post.
Every month the password will change. Which means you’ll have to tell your browser to remember each monthly password. For that inconvenience you’ll get Pauline’s posts, lessons, and all I have. Including info like what you see above with the Buffett and Lynch valuation insights, plus a lot more. Fx trades, levels, and risk reward profiles all given in an easy to understand manner and format. Also:
- A full archive of my understanding of Fibonacci retracement theory.
- A full archive of my understanding of price theory and index theory.
- A full archive of my understanding of Soros’s Reflexivity/ Fallibility theory.
I’ve been studying the markets very hard for more than eight years now. I’ve touched on a lot of things along the way. Hours and hours of pouring over books digging diamonds out of the history of everything from politics, to markets, to technical analysis. Up until now I’ve been giving away my thoughts on current events in the markets, but holding back the most precious info; using it to trade. I’m not a big enough trader to take full advantage of this precious info/ skill. If I were I wouldn’t be offering anything. This is going to be a lot of work for Pauline and I. She’s been trying to recruit people to help her with the writing. She asked people who have bought her book and have been in contact with her. People who know the system and can do the writing easier. One said no, another never got back to her. It’s a lot of work. But I enjoy sharing and helping people. I also understand Pauline when she says she’s done too much work to just give it away. I’ve done enough work to say the same. So we will charge something. But the first month is free. June 2015 is free and will be free forever. Instead of the first month being free for any new sub, June 2015 will be the only free month.
Pauline has been asked to present a webinar for the IFTA (International Federation of Technical Analysts)
She’s so busy preparing for that she couldn’t get started on the archive in a meaningful way. So this month will start off with me and my Lessons. I will begin posting tonight. June 2015’s password is: vision9538
That will be the password for any password protected post you see on this site with a June 2015 date on it. Pricing details will be forth coming. First, I want to see and show how much value one month has in it. My first post will be about drawing Fibinacci retracements and using short term trend lines to trade fibs. I have a great example in the price action of the USD/JPY pair. My twitter DM’s are open for any comments or questions regarding anything from my or Pauline’s future posts. If you’re not on twitter, sign-up, because I will not be checking the comments on posts here. Twitter has more functionality. I think that makes it more inducive to building a community. That’s what we’re trying to do here: Build a community of profitable traders by offering actionable info and educational info. So if you don’t know anything about trading you can come here and hack the learning curve. If you’re a long time trader that needs a new system or a refresher you can come here and get your fix. We’re trying to build a place where you can get info and perspectives that you can’t find anywhere else delivered in a simple, straightforward way. Time will tell if we succeed or fail. The journey should be interesting to say the least! We hope you will join us!
Thanks in advance!