Market Update and Insights

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Market Update and Insights

by Guest Columnist, Max Larsen, Future Finances, Inc.

This week we welcome Max Larsen, President of Future Finances Inc. to the blog as a guest columnist for a review of the week’s economic news. Max is a professional money manager, with $200 million under management and a long time user of Hawkeye.

1. Weekly Wrap
2. Technically Speaking
3. Business Optimism Goes Stratospheric
4. Inflation is Creeping In
5. Johnny Depp – A Lesson on What Not to Do

Weekly Wrap

The past week was rife with earnings, economic data and commentary from two major central banks, but the market shrugged off the busy event calendar remaining in its range bound ways.

The big news of the week was a decent jobs report with employers adding 227,000 jobs last month according to the Labor Department. This was the biggest gain since September although wage increases were rather modest. This from The Wall Street Journal (weekly summary from Briefing.com):

The backdrop of a steady but unspectacular labor market is likely to keep the Fed cautious about raising interest rates and could prevent the central bank from colliding with President Donald Trump as he aims for faster economic growth.

Indices Weekly Figures

We shouldn’t forget about earnings season. Our very own Brad Huffman chimed in:

In addition to a slew of economic reports, earnings season continued to unfold. These were generally supportive of the current trend. The most significant weakness has come from large multinational companies indicating concerns about overseas activity. Despite those concerns, both earnings and sales growth are poised to expand for the quarter.

Please remember that historically speaking February is one of the weakest return months of the year with the worst part coming towards the end. It may not happen this year. There is a lot of money flowing into stocks right now.

Technically Speaking

I have two charts to share today. The first is from Arthur Hill of StockCharts. He points out that it has now been 79 days since we’ve seen greater than a 1% decline in the S&P 500. Talk about “range bound”…

Just look at the bottom indicator called the ROC or rate-of-change. This is nothing more than how much the S&P 500 changed on a percentage basis on a daily basis. I high-lited the 79 days in blue. It denotes a strong market to me.

S&P 500 Chart

The second chart is one you’re very familiar with. This is the 8-months chart of the S&P 500 (daily prices). Notice how we came into the “Support” zone last week and bounced out on Friday.

S&P 500 Chart

I still contend that we are due for a pullback. It may not happen, but I could envision a minor correction to the “Critical Support” area (red high-lite) which would only be less than a 5% retracement and still well within the upward trend line and above the 200 day moving average. We’ll see…

Business Optimism Goes Stratospheric

We have gotten numerous emails and phone calls on people’s concern for the stock market’s lofty state. Once again here’s Brad Huffman on a nice reply that I had to share:

Thanks for the note. The market is responding to views that tax and regulatory changes from the new administration will help improve economic conditions. We do believe in the short term we will see a slight pullback (maybe 5%), but that would be normal and draw in new investors. The technical and fundamental pictures are pretty healthy right now, but volatility will remain present as it did last year.

We have several positions in the portfolio that help us hedge any market swings so unless we see significant deterioration in the charts, we are comfortable with the moderate risk exposure we have in the portfolio.

Brad is correct. Just take a look at the most recent NFIB Small Business Index.

NFIB Small Business Index Chart

Like its title says – it measures the business optimism on a quarterly basis. This stratospheric 38-point jump in the number of business owners who expect better business conditions is staggering.

Whether you like the President or not – and I know there are many who don’t – it is what it is and we have to live with it. That said, there is little doubt the WSJ’s headline hits it on the head: “Trump Pace Has Heads Spinning.” Many businesses are very encouraged that someone is finally attacking the mind-numbing regulations and restrictions.

Inflation is Creeping In

Consumer Price Index YTD ChartWe’re starting to see the possible resurrection of a little inflation. The Eurozone just reported a 1.8% rise in consumer prices while we’re hitting 2.1% in the U.S. The Wall Street Journal chimed in:

After years of fighting against deflation, the U.S., the eurozone and Japan show glimmerings of life in consumer prices and wages, evidence that an era of exceptionally low inflation is receding from the global economic landscape.

Several factors are behind the move, including a rebound in energy prices, falling unemployment which is reducing slack in some labor markets, and central banks’ low-interest-rate policies that spur lending and economic growth.

To be sure, any economic shocks could reverse this trend. Still, this is important since certain asset classes – like commodities and gold – tend to thrive in this environment. However, those sectors which are bond proxies – like telecom services and utilities – tend to do badly when inflation and interest rates rise. Be forewarned…

Johnny Depp – A Lesson on What Not to Do
Johnny Depp

Johnny Depp is having money problems and is suing his business managers for mishandling his finances. It turns out that it may not be all their fault and are countersuing since the Pirate of the Caribbean star was spending more than $2 million a MONTH to maintain his lifestyle. In spite of repeated warnings he is now having serious money problems. This from CNBC.com:

The lawsuit said Depp paid more than $75 million to buy and maintain 14 homes, including a French chateau and a chain of islands in the Bahamas.

Depp also spent heavily to buy a 150-foot yacht, fly on private jets and cultivate collections of fine art and Hollywood memorabilia requiring 12 storage facilities to maintain, the lawsuit said.

$2 million per month and $75 million in non-income producing assets? What could possibly go wrong? He’s obviously a very talented actor yet it boggles the mind that he could be so inept with his finances – whether he had an advisor or not… You can read the entire article HERE.

That’s more than enough for this week my friends. Congratulations to the New England Patriots. Wow, what a game. Multiple records broken – including the biggest comeback in Super Bowl history. It just goes to show you – never give up. Have a fantastic week!


To learn more about volume and volume spread analysis, and to see more examples and live trade setups be sure to join me in the next free LIVE Hawkeye Demonstration Room held every Wednesday. Open to all. Click this link for more information or to join us in class.

Learn to trade the Hawkeye way.

Good trading,

Randy Lindsey
Hawkeye Traders, LLC

Market Meltdown – Hawkeye Knows

So many market pundits are saying a meltdown is here etc.

Well, Hawkeye Volume does not lie.

Emini Daily Chart

Daily Emini Chart

Look at the Hawkeye Volume circled at the bottom of the chart. It’s white for the last four days showing no demand, i.e. the sellers or buyers are not in control.

Then look at the price where the magenta arrow is. See how the price came up and touched the Hawkeye dot and then backed off – classic price action. Until the daily price breaks the last Widebar (magenta), price will go sideways, but with no advancing volume prices will remain in this range. Price needs high volume to commence a down trend.

Emini Weekly Chart

Weekly Emini Chart

Last week red volume but not high volume. As on the daily markets require high volume to reverse.

And following 6 ways a market moves the Hawkeye Trend dot has gone flat, so we are in congestion waiting for the next isolated or phantom low to show congestion parameters.

Emini Monthly Chart

Monthly Emini Chart

Interesting. Look where the dotted line and the magenta arrow are – a doji. If this month does NOT take out the high of doji a Hawkeye Pivot will form which could push the market down for 3,5,7 timeframes.

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

This will be my last blog post. I am retiring from the day to day work of Hawkeye and I have sold the business to my old partner Randy Lindsey. It has been wonderful to have been a small part of seeing so many of the ‘Hawkeye family’ not only go on to be such successful traders but also become close friends, and I am sure I will still attend the live seminars when invited.

When Hawkeye started back in the late 80s, I certainly never have thought there would be nearly 4,000 traders now using my volume algorithm. Please learn volume; 6 ways a market moves; find the right timeframe for you – as slow as possible; do a lot of work on your mental approach; money management/risk reward; and stop searching for the next indicator.

Farewell my friends and Good Fortune,

Nigel Hawkes
Hawkeye Traders

[The magenta arrows are for illustration only and do not form part of the software]

How to Make Money from a KISS

If you trade the Emini the Hawkeye KISS gives you a big heads up and saves you a minus trade.

Based on all the stock on the NYSE, Nasdaq and Amex the KISS represents if more stocks are being bought or sold, i.e. if the red line is rising it shows that more stocks are being sold across all markets and vice-versa for the green line.

Hawkeye KISS

KISS

In this example above you can see the 3-minute KISS just starting to show a sideways movement indicating there is a pause, or a possible reversal, in price. The KISS is not showing any buying as it would require the green line to rise with conviction.

Let’s now look at the price.

Blue Tick Speed Emini

ES Blue

Where I have placed the cyan arrow the program indicated a Volume Roadkill long entry, which was not elected.

Why? Well lets look at the yellow and red tick speeds.

Red and Yellow Tick Speeds Eminii

ES Yellow & Red

As you can see the Heatmaps (the indicator on the bottom of the charts) are red, and the trend on the price the dots show trend run down.

Hawkeye Perspective
By combining all three tick charts and seeing what the underlying stocks are doing across the exchanges there was FAR too much risk in a long entry off the blue timeframe.

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good Fortune,

Nigel Hawkes
Hawkeye Traders

[The magenta and cyan arrows are for illustration only and do not form part of the software]

Market Update. Not Too Late For Gold?

SPY
Yesterday buyers stepped in as the second half of the trading day developed.
SPY Charts 02-15-16
This can be interpreted in two ways.

First, as profit-taking ahead of the long weekend, which is normal.

Second, that the market tried twice to break lower and failed.  As far as technical analysis goes, 80% of breakouts fail at the first attempt.

So next week will confirm if this is indeed the start of a bounce.

Gold
For those who follow my Newsletter, you know that prior to Christmas, I went bullish on Gold and chose NEM Newmont Mining as my preferred stock to trade this move.

Lets look at the charts.

Gold Charts 02-15-16

A low-risk entry at the end of 2015 when the 133-minute chart clicked into the upside. I was stopped out on February 25, but will reenter if last week’s high is taken out by a close.

Hawkeye Perspective
After such a strong move lower, the odds of some sideways trading action is very high.

Markets don’t just fall off the chart; they run, then consolidate, then run again.

I believe we are in the beginning of a consolidation period.

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good Fortune,

Nigel Hawkes
Hawkeye Traders

Full Analysis on the S&P

With so much in the news regarding financial meltdown, let’s take a good Hawkeye look at the eMini.

Monthly S&P Chart
Daily S&P

Firstly look at the Hawkeye Volume – three months of no demand and one month of selling volume, giving you the heads up that the dominant uptrend was going to retrace.

Now, look where I have placed the dotted lines on the price. The higher one shows a double top with the two Hawkeye Pivot dots in yellow, the lower dotted line shows where price came to and found support right at the Hawkeye stops (indicated by the green crosses).

6 Ways a Market Moves shows congestion, and if prices rise next month a Hawkeye Pivot low will be printed. However, if the low of this monthly bar closes under the Hawkeye stops, a down trend will be established.

Weekly S&P Chart
Weekly S&P

A congestion break-out to the downside found support where I have started the blue line on price. Now look at Hawkeye Volume – although a major price move was not accompanied by ultra high volume, just high volume, and at the end of the week, Friday Hawkeye Volume shows buying volume. And if next week is up, a Hawkeye Pivot low will be established

Daily S&P Chart
Monthly S&P

Now it gets interesting. Remember what I teach at Hawkeye seminars – “The Tanker Effect”; when the markets are fast and volatile price shoots through the previous support. Look at the lowest price bar. Three days back it straddled both previous lows (shown by the blue lines on the chart), and rallied on buying volume, followed by two days of neutral volume indicating support as shown by the price action.

And now the final piece. 6 Ways a Market Moves. Look at the Trend dot crunching right up, still down so still a trend run. But if Monday is up the dot will go flat indicating congestion entrance.

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good Fortune,

Nigel Hawkes
Hawkeye Traders

[The cyan arrows and red lines are for illustration only and do not form part of the software]

Are We In Crash Mode? – HAWKEYE Has The Answer

Firstly I do hope you opened the email announcing the International Trading Profits Summit in beautiful, warm Palm Beach, USA in March. I really have assembled a wonderful team of traders to give you the tools and knowledge to make 2016 a fabulous year. Extended to three full days and kept at the same price of $750. So please come along.

Secondly, I wish you a very Happy and Prosperous New Year!

So, lets jump right in and take a look at what the new year is bringing in. All financial letter writers will be talking about the first week of trading, and in particular the stock markets, which have all had nearly a 10% down move from the 2015 highs.

With the markets rallying in the morning session only to be sold off in the afternoon, this the typical thumbprint of a market in crisis, with the bias to the downside. But let’s look at Hawkeye and the charts.

ES Monthly Chart
ES Monthly Chart

You can see where I have placed the yellow dotted line there had been four attempts to break that price, but now we are in congestion. With the Trend dots flat and white, and support off the Hawkeye Zones at 1785, and volume showing no demand and bias to the downside.

ES Weekly Chart
ES Weekly 01-11-16

This makes it all far more visible. Price rejected off the Hawkeye Zones and testing the Hawkeye Zone at 1887. Interestingly, Friday’s volume was normal and close to the bottom of the range which leads me to think that it was an amateur down bar. If the professionals were selling there would have been far more volume.

ES Daily Chart
ES Daily 01-11-16

This really does tell the story – the downtrend on Thursday gave high volume followed by average volume on Friday. Again suggesting amateur selling not professional.

Hawkeye Perspective
This week will tell all. There was good jobs news last week in the USA and the market should have rallied. So let’s see if it finds support off the daily and weekly Zones and rallies.

We certainly don’t want to be long until Hawkeye gives it to us on the daily and weekly. Major support is at hand. But with China in free fall, anything is possible

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good Fortune,

Nigel Hawkes
Hawkeye Traders

[The red arrows and lines are for illustration only and do not form part of the software]

Get Ready for a Potentially Great Trade

The dollar index is breaking out of an 8-month trading range. This is happening on some of the strongest economic numbers since 2009. The Fed was requiring stronger economic data – and that arrived on Friday.

The sentiment is that there will be a rate raise at the next Fed meeting. If this is the case the dollar rally is just starting and Hawkeye will show the way.

Dollar Index Monthly Chart

Dollar Monthly Chart
We are now approaching the high that was established 8 months ago and a Hawkeye Zone at 104.13, but we require more volume to provide the market energy to breach this overhead resistance.

Dollar Index Weekly Chart

Dollar Weekly Chart
Price is now in a Hawkeye Zone, with the top side being 101.45. However, attendant volume is not rising, which it needs to do to be able to break out to the upside.

Dollar Index Daily Chart

Dollar Daily Chart
Now this really tells us the story. Good increasing daily volume on a Hawkeye Wide Bar on Friday, price should retrace back into the Wide Bar in the early part of the week, then find some volume that will push it up to the Hawkeye Zone area

Hawkeye Perspective
If 101.45 is breached we should be on our way to a substantial Dollar rally.

Overhead resistance has to be taken out, so no maverick trades please. But have this on the radar as a potentially extremely profitable trade is being set up.

And remember, if the dollar goes up look to a short bond trade.

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good Fortune,

Nigel Hawkes
Hawkeye Traders

[The magenta arrows are for illustration only and do not form part of the software]

Why Most E-mini Traders Can’t Compete With Hawkeye Traders

The e-mini stock index futures contracts are probably the most popular of the dozens of e-mini products. These contracts are appealing because of their affordability, leverage, liquidity, profit potential and round-the-clock trading.

So, in this week’s article, let’s take a look at the e-mini from the perspective of the Hawkeye Volume based trade methodology. First off, please notice the two yellow dotted lines I’ve placed on the chart.

Emini Daily Chart

The bottom dotted lines show you where the isolated lows and phantoms have occurred at the bottom of this price range that the E-Mini is in.

And at the top, you can see on that dotted line, I have placed three arrows down, which all indicate where phantom or isolated highs have occurred.

If we look at arrow number four on the bottom, you can see that on Thursday and Friday, we had two bars of no demand volume. In other words, there were no buyers or sellers in command of those bars.

However, Friday’s bar is an interesting bar, which will give the clue to what this week is going to be. You can see that we have 50% of an isolated high in place. Now, when I say 50% of an isolated high, which is a Hawkeye Pivot, it requires a new bar to complete. So, if on Monday, the bar has a lower high and a lower bottom than on Friday, there will be a yellow dot placed above that bar showing a Pivot.

And, that will be in harmony with the yellow dot (the Hawkeye Pivot low before), because it will be 5 bars up, Pivot, then down.

And as we say, we are always expecting 3-5-7 bar reactions of Pivot highs and lows.

But, let’s have a closer look at the bar on Friday. You can see that it opened above Thursday’s close. And that is where the amateurs jumped in and said this is going to go up. Then, the professionals came in and started to sell it. And, as there was no demand there was no through buying. Then, the price came back down from its open of the high and closed under the close of Thursday.

So, this coming week, we are going to see probably one of two things; either a test up at the 2122 level, which will be the fourth attempt to get through that resistance area.

And, if any of you are Gann followers, you will know that normally on the fourth attempt, resistance and support breaks.

So, we could see a break up and a new trend run up for the S&P as we go into the summer holidays. Or alternatively, if an isolated high is put in on Monday, so we have a lower high and a lower low than on Friday, you will see that we will come down and test the 2062 area.

And, if that breaks, we are going to be in a trend run down. So, a very interesting week setting itself up on the S&P.

Watch it closely, because if it does break up to the upside, we are probably going into a very strong uptrend, which is contrary to what most people think of what happens during the summer holidays.

And again, if it breaks that dotted line low, we will be meandering down into the critical months of September and October, which as we know through history, are cyclical down months of the market.

So, look at market structure, look at Hawkeye, look at the volumes, and I think there is going to be a very interesting trade setup this coming week.

Now, all of this (and much more) is demonstrated in our Wednesday room by my colleague Randy Lindsey.

So, I cannot encourage you enough to come along to the Wednesday room.

Click Here To Reserve Your Seat

Good fortune,

Nigel

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The magenta and cyan arrows are included for illustration only and do not form part of the software]

The Next 5 Minutes Could Change Your Trading Results Forever

There is no end to the debates among active traders about the pros and cons of swing trading vs. scalping. And the debate has been going on for years. However, in my opinion, two of the greatest failings of most traders are:

  • They trade on too short of a time frame
  • They fail to hold their trades for the maximum profits.

So, in this week’s article, I will highlight how to resolve these two problems by swing trading with Hawkeye indicators.

Below, I’ve included six charts in different time frames and markets. They span everything from stocks to bonds and commodities to Forex. Frankly, I could have included dozens of charts, because these principles of swing trading apply in any market. And by using Hawkeye indicators, finding extremely profitable entries and exits is easy.

The key thing to remember is to wait for the best entries, when all three time frames are in agreement. To illustrate, on each chart, I’ve marked the point where all time frames are in agreement and we are presented with a safe and easy entry as marked by the red and cyan arrows.

In every case, you can see that by waiting until all three timeframes are in agreement, you can enter a long and profitable trend. Then, by holding the trade until your profit target is hit, or you are stopped out, you can make significant profits without all the flurry of trying to get in and out with scalp trading.

Please take a few minutes to carefully study the charts below.

Stock – (Google)

Stocks - Google

Forex – (AUDNZD)

Forex - AUDNZD

Crude

Crude Oil

US Bonds

US Bonds

Stocks – (BHP)

Stocks - BHP

Forex – (AUDUSD)

Forex - AUDUSD

Now, all of this (and much more) is demonstrated in our Wednesday room by my colleague Randy Lindsey.

So, I cannot encourage you enough to come along to the Wednesday room.

Click Here To Reserve Your Seat

Good fortune,

Nigel

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red and cyan arrows are included for illustration only and do not form part of the software]

Sick Of Head-Fakes and Other Losing Trades? Here’s The Solution

One of the biggest frustrations for traders is entering a trade, only to see it immediately reverse against them. That’s why I developed the Hawkeye Heatmap indicator. Its purpose is to give an objective indication of the strength of a trend. By entering trades in the direction of a strong trend, Hawkeye traders can significantly boost their profits and reduce their losses.

In this week’s article, I’ll show several examples of how the Heatmap works and how easily it reveals the strength of the underlying trend.

Let’s begin our discussion with this first chart of the E-mini (from July 3, 2015).

Emini Chart

The Heatmap (on the bottom) takes the three variable inputs from the Hawkeye Trend — conservative, normal and aggressive, and shows you visually when all three trends have locked into place. This gives you a clear view of the overall market sentiment and quantifies risk.
Heatmap works in all timeframes and displays four color variations:

  • RED – The markets are in a strong downtrend and bearish
  • GREEN – The markets are in a strong up trend
  • DARK RED OR DARK GREEN – one or two of the trend speeds have locked out of the trend, and the market may be pausing into a congestion area or reversing.

In the example above (where I have the number 1), it shows that the trend is in congestion, as you can see by the white dots.

But, if you look at the Heatmap underneath, it’s in dark red, which is telling us that the bias is to the downside, however, all three trends are not in sync. So, if you want a safer entry, you would wait until point number 2, where the Heatmap goes bright red, and then down it goes.

Similarly, let’s consider the long entry as marked by numbers 3 and 4.

You can see that the trend has gone from bright red to dark red, showing us that the trend is weakening. One or two of the trends have clicked out (hence that’s why it goes to the darker red at point three).

And then, at point 4, the Heatmap goes bright green, and up it goes.

At the number 5, you can see the trend goes flat, the Heatmap goes dark color (telling us that the trend momentum is stalled), and the bias is still to the long side.

Then, at number 6, Heatmap goes bright read and prices immediately drop.

Now, the next example is the weekly chart of Apple, the most widely held stock in America.

Apple Weekly Chart

And again, you can see at point 1, we have two dots of white, and then, the Heatmap goes dark red, followed by bright red. And bang! Down it goes. At the number 2, the Heatmap goes from bright red to dark red, showing that the trend strength is dissipating. And then, it goes bright green and bang! Up it goes. The same for point 3, where you see the Heatmap goes dark red, showing us that we are in a trend pause. We have entered congestion, and at point 3, Bang! The Heatmap goes green, and up it goes.

At point 4, although white dots come in (showing us that the trend is going flat), the Heatmap gives you the confidence to stay in this trend and continue on up, because it is just saying everything is in place.

Lastly, let’s consider the daily chart of Crude.

Crude Daily Chart

You can see that at point 1, we have gone into a trend congestion, and our Heatmap has gone dark red. Then, at point 2, the Heatmap goes bright green, and off we go up to point 3.

At point 3, you can see that the Heatmap has gone dark green, showing us that the strength has gone out of this up move. Although the bias is still to the upside, there is no momentum in this. And the circle that I have drawn around three all the way across to four is something that took me many hours to perfect and find out the answer.

And, I haven’t seen any other software out there that would run for that length of time just showing congestion. Then, at point 4, the Heatmap goes bright red and Bang! In it comes, and the market starts selling off.

So in summary, the Hawkeye Heatmap solves one of the biggest frustrations for traders. That of entering a trade, only to see it immediately reverse against them. By simply entering trades in the direction of a strong trend, Hawkeye traders can significantly boost their profits and reduce their losses.

Now, all of this (and much more) is demonstrated in our Wednesday room by my colleague Randy Lindsey.

So, I cannot encourage you enough to come along to the Wednesday room.

Click Here To Reserve Your Seat

Good fortune,

Nigel

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

 

ANNOUNCING: An Exciting New Breakthrough For Intraday Traders

One of the biggest challenges intraday traders face each day is determining what time frame to trade. That’s why I developed Hawkeye’s Gearbox and Gearchanger.

These world-class innovative tools show you, day-in and day-out, the absolute best way to trade the markets using tick charts.

So in this article, I will walk you through how these tools work to give you much greater insight into what’s really going on in the markets and how to trade them more profitably.

On the right hand side of the chart below, notice that there are four labels. First, there’s 5816 which represents the slowest tick speed trade you should currently consider using.

Next, there’s 2908 (marked in yellow), which is the medium time, followed by the blue, which is the fast time. And finally, the cyan is the ultra-fast time frame you should use for scalping.

Emini Gearbox

As an illustration, just as a cyclist has to change gears when they approach a hill, we as traders need to change gears as market conditions change. For example, look at the spikes on the above Gearbox chart. Notice how at one point, it goes up to over eight thousand ticks and then, drops right down to under 5000 ticks.

Obviously, as market conditions change like this, our approach needs to change, because we must trade in harmony with the speed of the market. And that’s what the Gearbox does. It shows us what tick speed to use. And the best part is that this works on all trading instruments including forex, stocks, and commodities.

Now, Gearbox is coupled with a second tool that I call the Gearchanger, which is displayed in the multi-color chart below.

Emini Gearchanger

When the GearChanger is blue, you should be trading in the fast tick speed. When it’s yellow, it tells you to trade the normal speed. And when it’s red, it’s telling you the market has slowed down, so you should trade at a slower speed.

Let’s continue with an example of using Gearbox on the EURUSD currency pair.

EURUSD Gearbox chart

See how the tick speed fluctuates a lot each day? And when we couple this with our EURUSD Gearchanger chart below, you can see how it tells you exactly what tick chart to trade in harmony with the market as it speeds up and slows down. As you learn more about these tools, you’ll come to realize how powerful these two tools can be in your trading.

EURUSD Gearchanger

Also, if you are a stock trader, these two tools can also help your trading. Here’s an example using them on Netflix (NFLX).

NFLX Stocks Gearbox Chart

Notice the amazing amount of volatility on the chart! If you were just trading a time chart, you would have no visibility into what was going on with all this time volatility. Using a 5 minute chart would be far too fast when this is at the top around 900 ticks. And, it would be far too slow when you are at the bottom about 89 ticks.

And next, here is the Gearchanger on NETFLIX which throughout the day would tell you which chart to look at and which chart to trade from:

NFLX Stocks Gearchanger

So, in conclusion you can see how powerful these two tools are. Every day and throughout each day, they reveal what is the best tick speed to trade with. If you haven’t been successful in intraday trading yet, this is the key that you have been looking for, especially when coupled with Hawkeye Volume.

Now, all of this (and much more) is demonstrated in our Wednesday room by my colleague Randy Lindsey.

So, I cannot encourage you enough to come along to the Wednesday room.

Click Here To Reserve Your Seat

Good fortune,

Nigel

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

 

What Do Apple And The ES Have In Common?

In today’s article, I’ll start with the chart of Apple, because it is so similar to what is happening on the E-mini chart. So first up, notice where I have put the yellow dotted line, where the first red down-arrow is, and how Hawkeye had a phantom isolated high at that point on the 27th of February at a price of 133.60.

Apple Weekly Chart

As you can see from that point, the market has just gone sideways, although the trend dot is slightly rising.

Now, the volume that is displayed on the chart doesn’t show a Hawkeye Volume Radar dot on it, because one wasn’t generated. Which means that although this appears to look like high volume, the fact is that it was just average volume.

And if we look at the range of the bar, it was an average price range bar, which means there was no selling coming into this at that time. It is just in its distribution mode. And if you look at the volume at the bottom, which I have circled, you can see that it is classic cyclical change of trend volume, where you would go red, green, no demand with the whites, etc. You can see that it’s trying to make up its mind in a distribution phase.

And unless it breaks out of the 133.60 range and closes at the end of the week right up above that mark with the rising trend dot, we’re still going to be in our weekly cyclical change of direction. We will still be in our trend pause mode and distribution. We will be in our congestion zone at the top of the market waiting for enough volume to come in to push the market up. But when I show you the ES, you’ll see that it is totally dependent on that chart.

Now, let’s move on to the ES chart.

ES Weekly Chart

As you can see, I have placed a cyan arrow pointing up. That occurred on February 27, and that isolated high, which is been indicated by the yellow dot on the Hawkeye has held all the way since 27 February.

And this week we visited that price, and it hit it and backed off again. As you can see, there are four red arrows, showing you that there have been four attempts to get through there, and all have failed. If you look at the volume, again you can see that is total topping volume going on. It’s not a trend volume, because trend volume would all be green. But you can see that there’s red, green, white no demand, red, green, green, green.

So in the last four weeks, you’ve had green buying volume coming into the ES, but the price hasn’t moved. It really hasn’t gone up, and it achieved a breakout of that high on February 27, and continued a trend run. So this week is a very important week, because it really has to do something.

So, any of the Gann traders who read this, you know that WD Gann said; on the fourth or fifth attempt prices normally go through support and resistance. Well, it backed off on this fourth attempt to get through this resistance.

And this coming week, we’re going to see whether that was a back off, or whether it is going to go back up through the isolated high yellow line that I’ve drawn off the pivot high that occurred on February 27th. So, in fact, if you look at the two charts also, between the ES and the Apple, you can see that time-wise they are both struggling around those price areas, and that were achieved on February 27th.

So, it’s going to be an interesting week coming up, and let’s watch it carefully. It’s going to be absolutely fascinating to see how this plays itself out. At the moment, the market is in total congestion on both markets, and we are waiting to see breakouts occur to the upside this coming week.

Good fortune,

Nigel

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red and cyan arrows are for illustration only and do not form part of the software]

How To Boost Your Profits With The “Money Bounce” and “Key Reversal” Signals

In our weekly training rooms, I teach about Hawkeye Volume to help our traders understand the concepts behind volume trading. Today, I will show you how supply and demand zone theory, coupled with volume theory, can yield fantastic results to your bottom line.

Today’s trading gave us several great examples of what we call the “Money Bounce” and a “Key Reversal” signal.

A Money Bounce is defined as follows: Whenever you have a new supply/demand zone formed, the Hawkeye Zones will color it cyan. The first time price returns to this cyan colored zone, as shown by the first green arrow in Figure 1 below. That is the point where you have the highest probability of a reversal occurring.

TF Trade 04/28/2015 Money BounceFigure 1. TF Trade 04/28/2015 showing Money Bounce.

Once price exits the cyan colored zone (the first bounce), Hawkeye Zones will automatically change the color to blue, signifying that price has hit that zone one time. That way, it is very easy to look at any zone and determine by its color how many times price has visited that zone in the past.

Trading the Money Bounce is straight forward – high probability and low risk. We teach entries using multiple timeframes and our 3-step entry method (come to class to learn this valuable method). But on the 250 tick chart shown in Figure 1, the second green arrow points to the entry point of the short based on the Money Bounce. That is the point where our Trend, Volume, and Momentum (Heatmap) all agree and give us a great entry point short. The target for the trade is given by our shorter and longer timeframe Hawkeye Zones, which were 1248.0 and 1238.0 respectively.

Figure 2. TF trade 04/28/2015 Reversal point and targets.Figure 2. TF trade 04/28/2015. Red arrow shows reversal point, and green arrows show targets.

OK, so you can now see how we profit from a Money Bounce. These types of trades occur more often than you think, and we teach these methods in our weekly training room to all our Hawkeye members.

Now, let’s look at the follow-on Key Reversal using Hawkeye Zones and Hawkeye Volume to identify another high probability, low risk entry point.

Figure 3. TF Trade 04/28/15 Exhaustion and Key ReversalFigure 3. TF trade 04/28/2015 showing short target and volume reversal signal inside demand zone, with partial Hawkeye Pivot low forming, indicating exhaustion and key reversal.

Referring to Figure 3 above, notice that after the price hit the 1238 blue demand zone, the price bar closed higher than the open, and Hawkeye Volume painted it green, signifying that buyers have now entered the market and the short move has entered exhaustion. The following price bar is also showing that we have half of a Hawkeye Pivot forming, telling us to expect three to five price bars of reversal price action.

Figure 4. TF trade 04/28/15 Key ReversalFigure 4. TF trade 04/28/2015 showing Key Reversal, Hawkeye Pivot, and target point at 1252.

As expected, we now see from Figure 4 that the pivot did indeed form, and we have three reversal price bars on the chart. The green arrow points to the target based on our Hawkeye Zones (the target is the next zone of opposite type, which in this case is the supply zone at 1252.0).

Again, trading the reversal is shown in Figure 5, where the long was entered when the Hawkeye Trend, Volume, and Heatmap all agreed on our 250 tick chart, with targets at 1252.0 and 1253.3 respectively.

Figure 5. TF trade 04/28/2015 long entry point and target.Figure 5. TF trade 04/28/2015 showing long entry point and target.

As shown in Figure 5, the summary trades yielded 11.2 TF points to the short side, and 11.9 TF points to the long side, which equates to $2,310 per contract traded. Not too bad for one hour of work!

In summary, learning how to trade using Volume coupled with supply and demand theory can significantly add to your bottom line. If you are a Hawkeye Member, you get all this training for free. If you are are not already a member, CLICK HERE to get our Volume Starter Package, and start coming to our special Thursday training for members only.

Otherwise, we demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good trading,

Randy

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red and green arrows are for illustration only and do not form part of the software]

Never Hijack Your Trading By Second-Guessing The Hawkeye Indicators

Let’s begin this week’s newsletter by looking at the weekly chart of the ES. As you may remember a week ago, I said that we were in a topping formation on the S&P.

ES Weekly 042115

And we can certainly see this in this weekly chart. Notice where I’ve placed those red arrows at the top of the chart and how they are all bearing down on where the Hawkeye top pivot is. (That’s the yellow line extended to the right, and underneath the red arrows).

Now that pivot was put into place on February 27, and since that time, we have been visiting that price area five times. Also, notice how the trend dots have gone flat, indicating congestion.

So, we have our congestion parameters set up there between the top and bottom pivot line extensions. Also, notice where I’ve circled the volume at the bottom. You can easily see how that is indicating total distribution volume, where it is alternating between red, green, and white.

Of course, when you are in trend runs, you get nothing but green and white volume and an occasional red testing volume to test whether the market is solid. But this time, the market isn’t solid, and it’s going sideways. So, it has to breakout of that pivot high extension (the yellow line to the right), to show that we are in the trend.

At the moment, we are in congestion, and you can play this quite easily on your daily charts by knowing where those two levels are, and selling it when it approaches the top line, and buying it when it approaches the bottom line. But, that is a skillful and more advanced trading skill then trading a trend run. But, knowing where you are in the market, certainly helps your intraday trading too.

Now, let’s look at our second chart, which is the GBPJPY.

GBPJPY daily 042115

Last week, I indicated there was a potential trade to the downside coming, and that was indicated where the second blue arrow was pointing up. And if you remember, I said that if it breaks underneath that bar (the yellow pivot line), with no part of it touching it, then we have a breakout to the downside.

I also said that those who are aggressive traders could trade that pivot extension break, if there was a close underneath it. But, as you know, being aggressive means you are taking on more risk. And sure enough, it never happened, because after the second arrow, you can see the price went up to the pivot extension, indicated where I placed the first blue arrow. You can see that that yellow pivot line extension, it went up and visited it again, and the close was greater than the open, so it would have totally invalidated any entry.

The next day, it went up and actually straddled the price line again. So, you can see that now, volume is coming in to the upside, and it will be pushing it up to probably test the Hawkeye stops, where the red cross is above the price.

So, pivots and their pivot line extensions are very important and should be considered as elastic bands and not as rods of steel.

So, if you are doing swing trading or position trading, always wait for a break where no part of the bar touches the pivot that was last formed. Also, remember the other Hawkeye rule that we use, and I’ll give an example of an uptrend here. The close has to be greater than the open and in the top 40% of the range.

So, in summary, to really understand the power of the Hawkeye pivots and their extensions, you can see in these two examples we have been talking about in our recent newsletters have absolutely played out, and have kept you safe in the market. Ultimately, they have shown you where the market is and how to trade it accordingly.

Good fortune,

Nigel

We teach this and many other methods in our live training room held every Wednesday. Click this link for more information or to join us in class.

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red lines and red and blue arrows are for illustration only and do not form part of the software]

Hunters Wait For the Perfect Shot And So Should You

Let’s begin with a short update on the ES, that I discussed last week. We are still in daily and weekly congestion. Although the market is rallying up, it will struggle to get above the Hawkeye stops on the daily chart. The critical point we have to look for is a breakout of the weekly pivot high that was established on February 27. If that weekly pivot high is taken out, then all bets are off, and we are off to the upside. But at the moment, we are having distribution volume profiles at the top of this market.

Now, I would like to look at the GBPJPY cross. Let’s begin with the Fatman indicator.
fatman daily

On the daily chart above, you can see I’ve placed a red arrow where the brown line (GBP) is starting to bend down.

And, if we look at the weekly chart (below), you can see that the brown line (where I have placed the arrow) is still in steep decline.
fatman weekly

This shows us that when we get setups occurring on the timeframes of daily, weekly, and monthly, we have a low risk entry.

I’d also like to say that the fundamentals on the British pound are very bearish. We have an election coming in about four weeks in the UK, and it looks like a hung Parliament. In other words, no party will have a majority, so there will be a lot of compromise. The markets don’t like it when there is no solid government in power. So, I recommend that you really start paying attention to all the pound crosses.

On the GPBJPY daily chart, see where I have placed a red arrow, just below the last pivot low extension?
gbpjpy daily

On Friday, the market closed underneath that pivot line extension. Now, because this is a daily chart, and I want to swing trade it, I want to wait until there is no part of a bar that is straddling that pivot line extension (the yellow line that goes through the price that occurred on Friday). So, we will have to wait until Tuesday for a 100% setup on this market.

If you are an aggressive trader, you may already have a short in place on the daily. However, when we come to the weekly chart, you’ll see that the danger signs occur, and you have to be cautious. Now, if you look at the second arrow on the daily chart (on the gray little dot), which shows us an aggressive entry now to the downside. So, everything is in place on the daily. However, we need to have at least one more day (Monday) to get a real confirmation and a low risk entry.

If you look at the monthly chart (which I’m not going to display), you’ll see that the trend dots are starting to roll over. Again, showing us this up move on the GPBJPY is over, and we should expect a decline.

Now, let’s look at the GPB weekly chart, and you can see I’ve placed a red arrow.
gbpjpy weekly

This is the danger area. Can you see that it’s coming right down and touched the Hawkeye stop (the cross)? And if you look on the cross line, you can see that it has come down to that support area seven times. So, as soon as it breaks that support (which might come this week), you have a sure fire, low risk entry to trade the GPBJPY to the downside. But, you must be cautious and wait, like a hunter waits for the perfect shot. So, you must wait for the perfect set up. I do believe we will get a perfect setup this week. So, stay alert and good fortune.

Nigel Hawkes

We teach this and many other methods in our live training room held every Wednesday. Click this link for more information or to join us in class.

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red lines and red and blue arrows are for illustration only and do not form part of the software]

Great Volume Price Analysis

In this week’s article, I would like to continue my analysis of the ES, because we are seeing a very important volume and price profile being played out for us. It looks like this market is biased towards the down side. And I should point out, the principles of my analysis here can be applied to any market. So, let’s begin with the monthly chart:

es monthly

If we look at the monthly chart, notice the area that I have circled in red, where we can see distribution volume. This shows that this market is topping. If we look where I have placed the red arrow, that is also a phantom isolated high, which was tested for the month of March. So, March tested the February phantom high and came down. And, we also have the price dot going flat indicating that market momentum is coming out of this market.

es weekly

If we now look at the weekly chart, you can see that the circle on the bottom around the volume is also indicating distribution volume. Now, where I have placed the three arrows, you can see that it’s come up and tested two times the area that generated the isolated high (the yellow dot on the left). And now, on the last arrow, you can see we have closed underneath the trend dot for a second week, and the trend dot has gone flat.

es daily

And finally, let’s look at the daily. On the daily you can see a lot more. And again, you can see the circle at the bottom, it indicates pure distribution volume. All of this indicates that this market is in a distribution mode, and you can see that I have placed two cyan arrows under the price indicating the resistance area or the support area that this market has to crack through to the downside, which is 2033.

If the market closes under 2033, then it will certainly be starting a downtrend. And you can see that where I have placed the arrow on the top that is on another pivot high up there. But, I put a dotted line there, which shows you all the way across there have been pivot highs to the left, and if there was more chart data, again and again, showing that was a major point of resistance that it just could not get through. And that level is the 2107 area. The trend dots are neutral, and you can see they are declining. And if you look at the bottom at the heat map, it has now gone to a dark red, indicating that the trend bias remains to the downside.

So, in summary, by putting these three charts together, we are coming to a very critical turning point in this market. I know I have been saying this for the last several weeks. But, the more I look at it and analyze it, this market looks very weak and will need a lot of volume to come into it to take it back up to test the overhead resistance.

Great Trading!

Nigel Hawkes

We teach this and many other methods in our live training room held every Wednesday. Click this link for more information or to join us in class.

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red lines and red and blue arrows are for illustration only and do not form part of the software]

How I Swing Trade The ES Using Hawkeye

In this week’s newsletter, I’d like to do a recap on what we did last week on the ES. In particular, this week’s article is about swing trading the ES.

If we look at the weekly chart, as you remember, I highlighted last week that the pivot high at 2110.25, was absolutely fundamental to any continuation of an uptrend on the S&P.

ES Weekly Chart

Well, you can see that it was hit during the week. It wasn’t penetrated, and the market declined off it. And, if you look at where I’ve circled the volume off the bottom of the chart, you can see that we have typical no demand volume and a recycling of volume at the top of the uptrend.

And, that is indicated by the declining green volume going into the move, followed by white no demand, red selling, green, a bit of buying, and then, at the end of this week, no demand. So, we can see that continuous chop going on in volume, so you know that you are at a potential turning point or a trend pause.

Now, I want to show you the eighty minute chart, and I want to highlight swing trading on the ES. Notice the symbol I have up here, it’s the @ES.D., which is just the day’s contract. Although the S&P is open on Globex 24 hours, I like to see just what is happening on the American session. And, I like to see the gaps that come in, because gaps get filled. So, I like to see the ES.D contract on all of my swing trading that I do.

ES 80 Minute Chart

Now, if we look at where I have placed the red arrow, you can see that the decline that came off the weekly resistance that I have just shown you in the above chart, you can see that we have had the downtrend. The downtrend has come in, and now we have entered into a congestion area, and we have a congestion high zone of where the arrow is for the price to break out. And if we also look at the volume underneath, you can see again that we have rotation volume, choppy volume at the bottom of the downtrend, no demand coming in. So, this coming week again, is an important week to see what the resumption of the S&P will be.

If we move over and have a look at the 40 minute, that is also confirming that we are in our congestion zone, and you can see I have placed a red arrow where that congestion high is.

ES 40 Minute Chart

But this time, look, we have green volume. So, the bias is showing us that on the 40 minute, buying was coming in, but it wasn’t sufficient to push the market up. Now, this could be accumulation volume. So, although we are in congestion off the volume, the bias is to an uptrend coming in next week. And if we look at the main market time I trade, which is the 20 minutes, you can see, we do have our congestion, running along the bottom.

ES 20 Minute Chart

Now, it’s something I’m very pleased about the Hawkeye Trend. It shows you the congestion with the white dots, just going sideways all the way through that area. And you can see on the last arrow on the right, again you can see the congestion zones being setup off the Hawkeye pivot and the pivot extensions.

You should all have these pivot extensions in the package, if you want to see white line off to the right, just go in and format the indicator and type true, and you will see the pivot extension. If you look at the volume, the volume is not quite so good on the 20 minute.

But, you can see that it is declining volume, low volume, and then, a test on higher volume right one bar before the end, and then, green volume coming in. Remember that it is a market rule that markets do not continue downtrend on low volume. This again is showing me that there is accumulation volume coming in.

But, with the profile of the market going sideways, it’s hard to call at the moment. We will see at the beginning of the week whether it will take out the high of the pivot or the low of the pivot. But in the meantime, the trend is certainly in congestion with the bias to the downside on our trend indicators. However, the volume is showing us pure congestion and pure accumulation and no demand going on down here. So, a very interesting week coming up. Now, the first arrow on the 20 minute chart, right at the top, I placed above the two and the one . . .

Again, if you put the Hawkeye ADDs on, which shows you exactly when to add to your position you can see how much you would’ve leveraged out of this downtrend. So, go along and understand the volumes are showing you. We’re up into seeing a very interesting week. Certainly, the newsletter last week highlighted to you the resistance point on the weekly chart that it would struggle there. Which it did do.

And we did have the downtrend on the intraday chart and the daily charts. And we are now at a critical point coming up this week. Now this coming week is also Easter week, and it will be a very quiet trading week later on. Probably from midday Wednesday, it will be very light volume. So, be very careful and don’t get tricked into any substantial positions over the Easter.

Don’t forget, if you haven’t picked up a copy of the Hawkeye Volume Starter Package yet, please CLICK HERE, and get started using Volume to start increasing your profits today!

Great Trading!

Nigel Hawkes

We teach this and many other methods in our live training room held every Wednesday. Click this link for more information or to join us in class.

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red lines and arrows are for illustration only and do not form part of the software]

Hawkeye’s View of the Dollar, the S&P Emini, and Apple

Let us begin by doing a review of the dollar, because it is in an amazing uptrend.

Dollar Index

There are a variety of fundamental reasons for this. One is that the Fed is expected to tinker with interest rates soon, and many are predicting that it will be in June. Another, because of the conflicts around the world, particularly because of ISIS, money is flowing into safe havens. This is all having a huge effect on the stock market. A lot of exporters are being hit and are losing some of their bottom line because of this high dollar. So, the exporters are feeling the pinch. And, as the dollar continues on this huge trend, expect more.

And now, if we have a look at the ES, there is a critical point, and that is 2110.25.

S&P Emini

This area has a Hawkeye High Pivot. And the weekly has to close above 2110.25 on this Friday to show that is in an uptrend. Otherwise, we are entering congestion on the ES, and we are also in congestion on the daily. We have to take out this area – 2110.25 – with no part of the weekly bar straddling it this coming Friday.

And that will indicate that an uptrend is on its way.

Now, let’s look at Apple. I’ve given you two charts on Apple, both the daily and weekly. And, you can see that where I have circled the Hawkeye volume, we have a typical congestion entrance set up.

Apple Weekly

That is because the volume is not showing continuously green volume. It is showing buying, selling, buying, selling, showing chop. And, where my first red arrow on the weekly is, you can see that I have a phantom high there. And on my second arrow, although I have green volume, the close is in the mid part of the bar. But look at my trend dot, because it is starting to flatten out, showing that the momentum to the upside is stalling, and distribution could be taking place.

Apple Daily Chart

Now, if we go over to the daily, you can see quite clearly that we are already in congestion on Apple, and you can see that I again have circled the volume which goes all the way back to the beginning of March showing typical oversold volume coming into the market. And the market going into its distribution phase. Now, it will probably break out to the downside until fair value is hit, and it will continue in this overall monthly trend to the upside. But, this is a very critical point for us and Apple this week again. We want to see it put in a long trend in the daily to give us any confidence that this is going to the upside. So, all in all, it looks very interesting

Don’t forget, if you haven’t picked up a copy of the Hawkeye Volume Starter Package yet, please CLICK HERE, and get started using Volume to start increasing your profits today!

Great Trading!

Nigel Hawkes

We teach this and many other methods in our live training room held every Wednesday. Click this link for more information or to join us in class.

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red lines and arrows are for illustration only and do not form part of the software]

Don’t Be Sucker-Punched When Trading The YM – Wait For Confirmation!

[NOTE] This article about the YM chart was written by Nigel back on March 7th and published after March 7th.

If we look at the monthly chart on the Dow (YM), you can see I have placed a cyan arrow at a key point on the chart. Please note the Hawkeye trend dots, and how they are all rising with equal space in between them, which indicates the market is still in an uptrend.

YM Monthly Chart

However, if you look at the Hawkeye stops (the little green crosses on the chart underneath the trend), you can see that they’ve gone flat. This indicates the market is in congestion with no momentum, and we will need more volume to show to continue this trend to the upside.

Now, let’s look at the weekly chart, and notice how I placed a red arrow on the bar that occurred at the end of last week, the week that ended March 6. You can see that although that is a down bar, the volume indicator (second from the bottom), is telling us there is no selling volume going into that move. And in fact, the most important part of that bar is it is still straddling the Hawkeye pivot extension line (which is the yellow line that comes off the yellow pivot dot).

YM Weekly Chart

So, this trend is still intact, with the price dropping down to the Hawkeye trend dot, where it finds support.

Finally, if we look at the daily chart, you can see we have two arrows. As indicated by the top arrow, the price has come down and broken through the pivot, but you can still see how part of the magenta wide bar is still straddling the pivot.

YM Daily Chart

So, I don’t consider that a full breakout yet. And, you can also see that it went right down, and the Hawkeye stops held it, so the market is still in congestion. However, if you look at the volume below, you can see that we have a yellow dot on the volume, indicating that it is high-volume.

This coming week is key to determining what new trades to take. But, let us remember an important rule about wide magenta bars. About 80 to 85% of the time, the next bars close within the range of the magenta bar. So, on Monday, if we see a close within the magenta bar, we know that we have gone into congestion, and thus, we will need to wait four bars. So, we will have to wait until Thursday to see if there is a down bar, which will then kick in the volume to the downside.

So, be patient this coming week. The price movement will reveal itself Thursday or Friday.

Lastly, if you haven’t picked up a copy of the Hawkeye Volume Starter Package yet, please CLICK HERE, and get started using Volume to start increasing your profits today!

Great Trading!

Nigel Hawkes

We teach this and many other methods in our live training room held every Wednesday. Click this link for more information or to join us in class.

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red and cyan arrows are for illustration only and do not form part of the software]

What Is Hawkeye Volume Analysis Telling Us About the S&P500?

[UPDATE] This article about the S&P500 chart was written back on February 28th. On Friday, March 6th, the event Nigel’s interpretation of volume pointed to came true, with a 29 point, 1.4% drop in the S&P.

Let’s begin the week’s article by examining the monthly chart on the S&P 500 for February 2015. As you can see, I’ve placed a red arrow on the January sales volume. On the next bar to the right, you can see we’ve had very low volume in the month of February.

Although the price bar is relatively wide, it’s not a wide bar, because it’s not twice average standard deviation over 20 bars. But, it is a decent sized bar, which means it was a market maker’s markup, rather than sales volume going in to it. So, it’s what I call a frothy top. Since we should have had more volume going into that range of bar, it indicates to me that the professionals are standing to one side.

Also, if you look at the trend dot (that’s the green dot on the price), you can see that the trend is starting to close up, indicating that the momentum has gone out of the upside move. This can mean pausing, or it can be the first sign of congestion and distribution at the top of the range

Monthly CME

Now, let’s look at the weekly chart. You can see here that a very interesting pattern is occurring. If you look at the price bar, you’ve got average volume going through (they are the green bars on the bottom). But, you’ve got a pretty narrow ranging bar at the top, closing underneath the open and in the bottom 40% range of that bar.

Now, if this coming week is a down week, it will also generate a Hawkeye pivot (as indicated by the yellow dots on the chart). This normally results in a three, five, or seven timeframe reversal. So, we have the first potential setup for a reversal on average volume and a tight ranging bar. That means for every avid buyer, there was a seller going into this move, and we need to do what I call forensic analysis on the daily to see exactly what’s going to happen.

CME Weekly Chart

So now, if we look at the daily chart, we can see that I have placed two arrows on it. The first arrow comes in after the Hawkeye pivot has been formed (that has generated the yellow line at the top of the charts). Now, that is indicating an area of resistance. The following bar, which I’ve placed another arrow on, also closed underneath that yellow resistance area, and you can see that the volume was average. However, if you look at the trend dot on this faster timeframe, the daily, you can see that it’s flattening out, showing us that momentum has totally dried up to the upside.

CME Daily Chart

So, my conclusion for these charts is that we are in a critical turning point this week on the S&P. The volume will lead the way and will show us exactly, but the chart patterns on the monthly and weekly charts are showing no demand, while on the daily, we’re seeing rollover. So, let’s see if that is confirmed in a down move or if this is just congestion entrance. There’s no point in guessing this. Let’s just wait and see what unfolds in the market.

Lastly, if you haven’t picked up a copy of the Hawkeye Volume Starter Package yet, please CLICK HERE, and get started using Volume to start increasing your profits today!

Great Trading!

Nigel Hawkes

We teach this and many other methods in our live training room held every Wednesday. Click this link for more information or to join us in class.

Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!

[The red arrows are for illustration only and do not form part of the software]

The Emini’s Recent Drop? Here’s What Hawkeye Foresees!

Recently, there was a big downward move in the Emini.

So, in today’s article, I want to examine that move using my Hawkeye Volume trading methods.

First, let’s have a look at the monthly chart.

ES monthly chat

If you look at the red arrow, you can see that it is 50% of a Hawkeye isolated high.

If this month’s bar does not make a higher high than July, we will see a yellow Hawkeye Pivot dot appear.

That means we should expect a minimum of three (and possibly up to five) months of bars back down against this uptrend.

Also, you can see that we don’t have much volume, indicating there isn’t much buying going on.

Next, let’s have a look at the weekly chart, which is showing us something quite interesting.

EMini Weekly (1)

If we have a look at the arrow at the bottom of the chart on the Hawkeye Volume, you see it shows us that last week, there was red selling that went on into the market.

Now, the two red arrows at the top of the market show a double top, along with the two yellow Hawkeye Pivot dots.

If you draw a line across the high of the first Pivot, you will see there was resistance that also stopped right on the second Pivot dot.

So, it’s clear that the market is rolling over.

This is also confirmed in that we have red Volume, and the weekly Trend dot has gone flat.

Lastly, let’s go have a look at the daily, because this really does tell us the full picture.

EMini Daily (1)

Here, on the daily chart, notice the red arrow on the bottom, which is showing us the volume.

Four days before the sell-off (the magenta wide bar), Hawkeye Volume was telling us that the professionals were getting short in this market.

Also, notice our two arrows at the top, which are showing us the yellow Hawkeye Pivot dots.

You can see that the second red arrow down is lower than the first. This is also indicating that this market is in decline and will be sold off.

Then, we have a yellow dot, which is the Hawkeye Pivot right at the bottom, and so we’re expecting a three bar reversal off of this.

However, as I write this to you, (which is on August 5th) you can see that the market is coming down.

And, if it continues coming down during the day, another yellow dot will be placed on yesterday’s bar, or it will become a phantom.

Either way we look at it, this market is showing extreme weakness at the moment, and certainly, you should not be buying any stocks at the moment. You should be tightening your stop losses, because this could be a major move coming into the summer period.

So, be aware of what is happening. Keep your eyes peeled, and make sure you follow the Hawkeye trading rules.

Good Trading!

Nigel Hawkes

[The red arrows are for illustration only and do not form part of the software]

Emini traders get a Kiss!

It is always so hard to know each day the market price action, and that is where Hawkeye gives you the result.

Chart 1 – Hawkeye Kiss

kiss

The Hawkeye Kiss is set to 3 minutes and is a graphical representation of ALL advancing/declining issues on the New York Stock Exchange, Russell and NASDAQ. The green and red lines are just an inverse of each other, so when the green line is rising you know the bias of the market is that there are more stocks being bought than sold. When they are tight together around the centre line (like in this example and indicated by the red and cyan arrows) you know that the market lacks direction. Hence, small trend runs are to be expected.

Chart 2 – Hawkeye Gear Box

gear box

This is the Hawkeye Gearbox and shows you day in, day out, the correct tick speeds to which to set your charts so that you are in harmony with the daily market. These are the numbers with different colors on the vertical right axis. Gearbox is the world’s only tick speed optimizer and uses a complex algorithm to calculate the optimal tick speed of the market for the day ahead. Tick data is most accurate as it represents each change in price irrespective of time. As a result tick charts represent the purest form of data and are the true heartbeat of the market, and YES the Hawkeye Volume algorithm  interprets tick volume as well as time volume. If we see the market range is tight, we have a choice of speeds to trade from. That is the beauty of the GearBox.

[The red and cyan arrows are for illustration only and are not part of the software]

Hawkeye Perspective
So, when the Hawkeye Kiss is in a tight range, we are only expecting short trend runs, so we look at the cyan tick speed and just scalp 1-2 full points (ES).

How to Make More Out of the Market

The Hawkeye Adds is a fabulous cash machine. It tells you visually when and where to add additional contracts, once you are in a trending market.

Chart 1 – S&P Emini (3144 Ticks) Fast Chart

emini adds

There was a powerful downtrend on Tuesday 5/20/14. You can see it on both the fast chart above and the slow chart below. How? Just take a look at the trend dots pushing down. Hawkeye Adds tells us to add contracts to our position (shown by the yellow numbers above). 1 is our first entry, then Adds tells us to add 3 more contracts as the trend continues. Finally it tells us to add a further 2 contracts. BUT remember our intraday rule: only add to your position once.

Chart 2 – S&P Emini (6288 Ticks) Slow Chart

emini slow

[Please note the red arrows are for illustration only and are not part of the software]

Hawkeye Perspective
Knowing when you are in a strong trend resulted in taking 19.5 big points from the Emini instead of 7.50 points using just one contract.

Don’t get sucked into this market. YET.

The overall market looks to be at a decision point lately. This can make for some large swings and potential false breakouts. Wait for clear signals from Hawkeye before making your move.

Chart 1 - S&P 500 Emini (ES) Daily

S&P emini daily(1)

The index future (ES) is still in distribution volume mode with up price moves on declining volume. The price will now test the Hawkeye stops (the red crosses below the price), but will need a large volume day to confirm. Don't get suckered into any break on light volume.

Chart 2 - S&P 500 Emini (ES) Weekly

emini weekly(1)

The dotted line drawn off the last Hawkeye pivot is also at the same level as the stops on the daily chart. So, a lot to get through, especially as the weekly chart has selling volume (indicated by the red arrow).

Note: the red arrows are placed for illustration only, and are not part of the software.

Hawkeye Perspective

Be very careful. The price will be tested as markets have to find their support and resistance levels. But if there is high volume with this test, wait first to pull back i.e. buying volume (green) followed by some selling volume (red) to say the markets have returned to uptrend.

The ‘Its easy to trade’ gang are out in force..a must see event, and one to watch

This week Mike Smith reports direct from the Hawkeye Options desk.

Here we go again – out from the woodwork they come…
Its earnings season and so out pop the latest plethora of NEW; INNOVATIVE; EASY; PROVEN etc. etc. headlines about a strategy that has been around as long as options have been in existence.

They say straddles and strangles are the way to trade a high volatility market (by definition it isn’t a volatile market by the way – just look at where the VIX is – there is a difference between choppy and volatile – a later discussion perhaps).

They will promise that this new (lol!) innovative strategy, where you buy a call and a put, an each way bet if you like…as THE ONLY way to make money in this market

(AND of course Barracuda at 191% end of day last session in less than 7 months is evidence that this is nonsense).

They will fail to mention that options prices go up pre-earnings – a little thing called implied volatility – (which is in simple terms, a forward looking measure based on how likely something could move from its current position – in an individual option position there is NO time when this is at a temporary high just before an earnings report). So you can pay over the odds for a call and pay over the odds for a put, and the underlying has got to make a massive movement for you just to break even.

Perhaps we will run a session on this, as there are ways to overcome such issues, but we have other fish to fry right now…just be aware.

A happier note…
Onto the happy stuff. As we are in week 1 of earnings season, I have put a blog post up at HawkeyeOptions.com that may be interesting. This explores the reasons why the pessimism pre-earnings (as seen in the recent market pullback) may lead to a continuation of the bull market we are still in (see the weekly trend in the SPY). You can read more here.

And after earnings..?
So, we are in a new quarter and as usual I am going to run a FREE open session, which looks into the crystal ball (which has been on the button the last 6 quarters these have been running).

Where you will hear

  • Our predictions for US and global equity markets this quarter.
  • Which strategies may work and which to avoid (as they are likely to rip away huge chunks of your capital).
  • The 5 things you MUST monitor this quarter to ensure you are at the front of the pack when things are likely to change.
  • Our predicted date for the next market correction and the catalyst that may drive it.
  • Where next for precious metals (and this may surprise you)?
  • And we will be revealing 4 stocks that are most likely to outperform the market between now and the end of June.

Although with an equities/options/ETF bias, whatever you trade this is ESSENTIAL information. You can register here.

This is simply a service we offer to all those who have expressed an interest in what we do and is a NO SELL zone session.

Feel free to share this link with others as it IS an open session.

And finally..

Watch YAHOO…yesterday’s earnings attracted some massive buying interest in after hours trading.

As always…trade safe and learn with passion.

Mike Smith

Know Pivots. Nail the Market.

The power of Hawkeye pivots and phantom pivots are shown here on the Emini.

Chart - Emini Daily

emini 040914

The cyan arrow is where I sent out a danger call on the Emini as there is no demand volume (white volume bar). This also came in with the market as per "6 Ways a Market Moves" going into congestion. So what do we do?

Correct! We look for the last Hawkeye pivot or phantom pivot high. This occurred on the first red down arrow, from where we draw the yellow dotted line. Now lets move forward. Look at the volume profile - its choppy, which is consistent with a market in distribution after an uptrend.

Understanding congestion exit is so important, as we teach in our seminars. Support and resistant lines are not rods of steel but elastic bands. See the second red down arrow, there is a close above the dotted line but the bar and subsequent bars all straddle the dotted line. So no breakout.

Note: the red and cyan arrows are placed for illustration only, and are not part of the software.

Hawkeye Perspective

When trading longer time frames always make sure that no part of the bar is straddling the support or resistance line. As I write, a pivot low could be forming on the daily, confirming more sideways congestion.

Intraday Traders – this is a world first!

Traders, I must try and enthuse you to use Hawkeye's GearBox and GearChanger - it's a pivotal moment in your trading career that will change how you perceive charts for ever.

Hawkeye GearBox and GearChange work on ALL markets but in this example let's use the S&P E-mini. Each day Hawkeye GearBox gives us a number of optimum tick speeds to trade for that day. As seen at the bottom of Chart 3, Hawkeye GearChanger is yellow all day telling us that the market is trading at normal speed. So in this example for normal speeds GearBox is telling us to trade the 3752 tick and 7504 tick charts. These are the charts I have set up in Charts 1 and 2 below.

Charts 1 & 2 - S&P E-mini

emini gear

 The red arrows in the charts above indicate where both time frames are in harmony, showing a low risk short entry producing a plus 9 full point move. The cyan up arrows show long entry holding to end of day producing a 3 plus full point move.

Chart 3 - Hawkeye KISS

kiss emini

This chart shows the Hawkeye KISS set to 3 minutes. The red arrow shows that the market momentum of advance/declining stock issues is slowing and the market enters congestion. The cyan arrow shows that stocks are advancing. Look at the rising green line in KISS. This prepares us for the entry on Charts 1 and 2.

Note: the red and cyan arrows are placed for illustration only, and are not part of the software.

Hawkeye Perspective

Understanding the power to the Hawkeye GearBox and GearChanger seriously will change your trading for ever. To see Hawkeye working every day of the week join Sean, an ex-Pit Trader, who runs the Hawkeye E-mini room live Monday through Friday. Click here to learn more.

The US Dollar at critical turning point.

Last week Hawkeye showed no-demand volume, the first sign of distribution in an uptrend. Since then the market price profile has confirmed this setup with a trend pause and no-demand volume. This is a classic set up working through. Today let's looks at how low volume can prefigure an accumulation phase.

Daily Dollar Index (DX) Chart

us dollar

The US Dollar Index has been in downtrend for some weeks but we are at a pivotal point on the daily chart. Look at where the great short came in on 14 February (indicated by the red arrow) and is showing 80+ pips. However, look at the low volume under the cyan arrow. Remember this is the first sign in your forensic analysis that the market should be commencing its accumulation phase prior to uptrend. So, if you are short pull your stops in.

Note: the red and cyan arrows are placed for illustration only, and are not part of the software.

Hawkeye Perspective

If the close by the end of week is under the dotted line on increasing volume all bets are off and the downtrend will continue.

Be Very, Very Careful!

Last week, we showed how Hawkeye GearBox identified the optimal tick speed to use on Emini futures. Today, let's look at how Hawkeye signals that danger is in the air.

Chart 1 - Weekly Emini

This weekly Emini chart illustrates just how Hawkeye called the market beautifully off the weekly volume Roadkill indicator with the large cyan dot (indicated by the cyan arrow). There is a weekly trend run from November 1 2013 with an entry price of 1431 closing today +441 full points on just one contract or +1764 points by using the profit accelerator (Hawkeye) that would multiply profits by a factor of 4!

emini weekly

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chart 2 - Daily Emini

With the weekly in uptrend you could only take long trades on the daily chart. If you were aggressive you could take shorts but with a profit target only disregarding trend runs. BUT WHERE ARE WE NOW? DANGER, YES DANGER. Hawkeye went long on February 14 2014 (indicated by the cyan arrow) and even with yesterday's sell off due to Ukraine the market has gapped up into new highs on declining volume. The unique Hawkeye volume algorithm has shown (as I write on  March 3 2014) it's a no demand bar, so we have a gap up into new highs on no demand. DANGER - tighten up stops and see if distributing volume now comes in.

emini daily

Note: the red and cyan arrows are placed for illustration only, and are not part of the software.

Hawkeye Perspective

Wait and tighten up stops and see if distributing volume now comes in. The party may be over.

How to pick the right tick speed to optimize your chance of emini profit.

Last week, we showed how Hawkeye Volume identifies volume accumulation prior to the explosive breakouts in sugar and coffee. Today, let's look at how Hawkeye GearBox and gives you the correct tick speed to trade with every day. We will show you how using the Emini futures market as an example.

From Chart 1 below, we see the values that the Hawkeye GearBox calculates everyday, showing you the correct tick speed to trade the Emini. There are 4 speeds calculated, and 3 optimal speeds we use to trade in harmony with the markets, as per the Hawkeye Methodology. (see red arrows)

gear box and gear changer

Chart 1 - GearBox and GearChanger on the ES emini.

At the bottom of Chart 1 is the Hawkeye GearChanger. The GearChanger shows you the correct market speed at any point during the day. It shows you which tick speed based on color, is your leading chart to trade from (red arrow). So, when the GearChanger changes color, say to blue, you know to trade off the appropriate Blue tick speed indicated by the GearBox value for Blue.

From the ES 1540 tick Chart 2 below, the Hawkeye GearChanger shows that the optimal speed to trade is the blue (fast) timeframe. The first red arrow shows where Hawkeye identified a short setup condition. The cyan arrow shows where Hawkeye identified a long setup. As you can see, price went up 5 ATR Levels (averate true range - shown by the Hawkeye Levels ATR indicator), and put in a Pivot High (yellow dot).

emini tick

Chart 2 - ES Emini Futures Contract

Note: the red and cyan arrows are placed for illustration only, and are not part of the software.

Hawkeye Perspective

The Hawkeye GearBox and GearChanger give you the daily tick speeds optimized for the current market activity. This is a HUGE advantage! This indicator works on all instruments: Forex, stocks, commodoties, ETFs, and index futures. Trade in harmony with the markets with the Hawkeye GearBox and GearChanger.

Hawkeye Shows One Great Stock.

The markets are correcting and the Dow is in daily and weekly downtrends. The ES is also in a daily downtrend but the weekly charts show congestion. Weak stocks are tumbling. This is the time for stocks that are strong, as they will probably get stronger when the market returns to an uptrend.

Lets look at Facebook as an example.

Chart 1 - Daily

This daily NASDAQ chart shows a new volume buy entry with accumulating volume (indicated by the red arrow).

facebook daily

Chart 2 - Weekly

This weekly NASDAQ chart shows a wide magenta bar indicating twice average true range (indicated by the red arrow). Normally the price will consolidate here and then push up through the high of the wide bar.

facebook weekly

Note: the red arrows are placed for illustration only, and are not part of the software.

Hawkeye Perspective

When prices close higher than the wide bar on the weekly this will indicate strength and an entry to the long side. Warning: if the indices are still falling wait until they turn.  You are trading risk so you need to wait for a low risk entry. NASDAQ rising and Facebook rising – a potentially great trade!

Hawkeye Volume Told You 10 Days Before the Market Sold Off

The Dow (YM) is a classic example of selling distribution volume.

Chart 1 Daily

This shows 10 days of selling volume occurring at the top of the uptrend (indicated by the red arrows), with the Hawkeye trend going white indicating no momentum.

 

dow daily

Chart 2 Weekly

This shows three weeks of neutral volume (indicated by the red arrow) with a Hawkeye pivot (red arrows) to the left so we expect a 3,5,7 bar reversal.

dow  weekly

Note: the red arrows are placed for illustration only, and are not part of the software

Hawkeye Perspective

Until 15,640 is broken on close this is just a pull back in uptrend. If that price level is broken a new weekly downtrend will be in place.

 

 

How to Get Emini Trend Runs

Trade of the Week

In this week’s example I have turned the stops off and made the trend dots white. I am using the tick values generated by the Hawkeye GearBox, a unique tool that gives you the correct tick speeds to trade every day.

I can now see how the market is trading using Hawkeye’s “Six ways a Market Moves.” It is vital that you have this knowledge when you trade. No other educator gives this amazing edge!

Now YOU can get this Hawkeye edge at the next Hawkeye Seminar in Phoenix, AZ  in October.

In the chart below,

  1. At the red arrow you can see the trend dot is lower than the previous trend dot and the close of the bar is less than the open.
  2. At the white arrow, you can see a small magenta dot under the white arrow. This is generated by the Hawkeye Roadkill indicator showing an entrance to the downside.
  3. At the cyan arrow, you can see the trend dot is flat and the close is above the trend dot, and green buying volume has come in… exit for a potential 12.5 point move.

emini-060713

The Hawkeye Perspective 

In conclusion, avoid trading any market without knowing the “Six Ways the market Moves!”

It’s the key to being a great trader, and now you can get in on the action at the next Hawkeye Seminar in Phoenix in October.

Click here to express your interest in the seminar.

Hawkeye Live Training Room

Advance your trading skills and see how the Hawkeye indicators handle all the market conditions like the one shown above:

  • breakouts
  • chop
  • trends
  • consolidation

Live training every Thursday from 8:00 – 11:00 am EST.

8:00 am    FOREX

9:30 am     Futures

This new series of training webinars continues until the last Thursday in June 2013.

Click here to register for our Live Training Room now — it’s FREE.

Want even more valuable education? Browse archived Hawkeye Training Room Videos here.

Good trading!

Nigel Hawkes

Where will the dollar index go next?

Trade of the Week

Although the monthly and weekly are just showing trend entry to the upside, the daily chart below shows a trend congestion entrance. Why? Because the live trend dot has gone flat (red arrow) and the close was under the current bars open and the trend dot.

So what do we do look to the left of the chart for the last pivot or phantom high (yellow dot) and draw a dotted line representing the congestion high. We are now waiting within five bars for an isolated low or phantom low to give us the bottom of the congestion range.

dollar index chart trading

The Hawkeye Perspective

In conclusion, until this has taken place there is too much risk to trade the dollar index long, but when the congestion parameters are broken then a trade setup will occur either to the up or down side.

Trading any market without education on the six ways the market moves is like walking into a casino with a stack of dollars – you’re relying on luck rather than a methodology.

Learn the “Six Ways a Market Moves,” the key to being a great trader, at the next Hawkeye Seminar in Phoenix in September.

Click here to express your interest in the seminar.

 

Three smart ways to exit a trade.

Do you stay with your profitable trades as long as possible hoping for the trend to continue to make your profits even larger? Do you tense up when you have to exit a profitable trade?

Here are three exit strategies to help you exit your trades with ease:

  1. Stops (waiting till the Hawkeye stop is touched or crash barrier breached)
  2. Levels ATR (average true range)
  3. Grabba (for fixed profit targets)

Where to exit is more important than where to enter, but the majority of traders in my experience don’t pay enough attention to exits as they should. Hawkeye Traders has not only developed precise entry methods, but also unique and well defined exit strategies.

AAPL weekly Chart with ATR Levels
Chart 1: $AAPL weekly chart showing ATR Levels management rules.

Using the Hawkeye Levels ATR on weekly stocks are phenomenal. Here are the indicator settings used for Chart 1: set the look back period to 14 and the ATR profit and stop factor to 1.5. The rules are that once the bar has closed above (if long) or below (if short) any level, the exit is a close, NOT TOUCH, of the previous level, or a touch of 2 levels back. This covers sudden reversals, so as Chart 1 illustrates, there was no time following a close below any level where there was a corresponding close above the previous level or a touch of 2 levels back. But now at the point labeled “1”, we have price trying to close above level 5, after closing below level 6… if at the end of this week it does close above level 5, the exit would have taken 5 ATR out of the market.

$AAPL weekly chart 2
Chart 2: $AAPL weekly chart showing Levels ATR management rules.

In Chart 2, I show a “losing” trade… but it demonstrates 2 methods to exit.  The first exit method you can see at the point labeled “1”, where there is a close under the zero line (the entry point) after previously closing above level 1. The second exit method is the Hawkeye stop… you could have exited the trade when price closed below the “+” mark 2 bars back from point 1. But please note it was nearly a scratch trade… the Hawkeye methodology protected you at either exit point you could have selected.

Intraday $ES tick chart
Chart 3: Intraday $ES tick chart showing Hawkeye Levels ATR management.

For intraday $ES trading (Chart 3), I set my Levels ATR to a period of 14 and a profit/stop factor of 1.25. See how this enabled you to take 3 ATRs from this move, as it closed above level 4, then closed below level 3, as shown at the point labeled “1” Chart 3.

$ES intraday tick chart with Hawkeye Grabba
Chart 4: $ES intraday tick chart using the Hawkeye Grabba trade management rules.

Using the Hawkeye Grabba allows you to set the levels at fixed price points. For example, say you want levels at every 1 point on the $ES (Chart 4)… so the Grabba settings are 4 ticks ($ES moves in .25 so 4 = 1 full point), and I set the stop multiplier to 1.25 (exactly the same rules as Levels ATR). To exit, follow the same exit rules described for the Levels ATR, or exit at predetermined profit levels as your trading plan dictates. Like the Levels ATR, the Grabba graphically shows you profit targets and exit levels for your specific exit strategy.

While there is no perfect exit strategy, the Hawkeye Method enables you to exit in strength and reduce the risk that the trade will turn against you if you are in a winning position.

Catch the bigger part of the trend with the Hawkeye Levels ATR, or the Hawkeye Grabba!

Trade of the Week – Understanding Roadkill, a Low Risk Entry.

This week I want to review the basic setup I used for our trade of the week. Looking at the intraday ES market, we begin with the Hawkeye Gearbox – a unique indicator exclusive to Hawkeye Traders. Every trading day, the Gearbox calculates and gives us the exact tick speed to trade the market… so you are always trading in harmony with the market vibration. Shown in Chart 1 is a picture of the Gearbox. A great deal of technical analysis goes into every calculation… we do the heavy work for you, and display the results.

Hawkeye GearBox
Chart 1. The Hawkeye Gearbox is a unique indicator that gives us each day the tick speed to trade the market so you are always trading in harmony with the market vibration.

From the Gearbox, we see 4 primary speeds to use throughout the trading day… ultrafast (aqua), fast (blue), normal (yellow), and slow (orange for futures/equities and red for Forex).  For today’s charts, I will refer to the yellow speed (3588 ticks) and the orange/red speed (7176 ticks), and you should see that my charts are set to these tick speed settings.

roadkill entry
Chart 2. Conservative Roadkill entry.

The yellow time frame, which is the dominant time frame, shows a cyan dot below the red bar, indicting a Roadkill entry.  I am often asked why it did not come sooner in the trend, but we are wanting trades where the risk is low, and therefore the close of a bar to trigger roadkill has to be greater than the open, and in the top 50% of the range. This condition occurred at the cyan dot, confirming our conservative entry. Without having to understand the full breadth of technical analysis behind the trade setup, the Hawkeye uses an intuitive color system to easily identify entries. When everything lines up, the entry is confirmed.

 

pivot low
Chart 3. The slow time fame should never be ignored.

Always look at the orange/red time frame (the slowest) and never trade against it. It shows a pivot low (the yellow dot).  A pivot will “push” the market up 85% of the time as we are in an established uptrend. This indicates a pull back and reversal back into the dominant trend… which equals a low risk entry! Know your tools and trade with confidence.

Next week, I will highlight and demonstrate where to take profits.

Good trading,

Nigel

Forecast for the daily VIX

VIX daily chart using Hawkeye indicators
VIX daily chart

Alongside the USD index, the VIX is another of those powerful indices, which gives clear signals of the broad market sentiment which ebbs and flows on a daily basis. The VIX is often referred to as the fear index, as it displays the market mood and whether market players are in ‘risk on’, or ‘risk off’ territory. It is based on the balance of calls and puts in the options market, and therefore gives a powerful insight into whether traders and speculators are protecting their risky assets with puts, or buying calls anticipating a rise in the markets. As a result the VIX works inversely to equity markets, with the VIX falling as stock markets rise and the VIX rising as stock markets fall. All of this is governed by the old adage, when the VIX is low it’s time to go ( or sell ). So where are with in today’s market.

The daily VIX has been falling steadily since the peak of early June when the index hit a daily high of 28, before falling steadily, to close on Friday at 17.47 following the statement from Jackson Hole by Fed Chairman Ben Bernanke. Equity markets had been hoping for some clearer statement from Mr Bernanke, but the only hint given was that the FED was ready an willing to ‘pull the trigger’. Whilst the Hawkeye daily trend has turned bullish, the three day trend remains firmly bearish, and despite the recent buying volume of the last few days, it is interesting to note that Friday’s bar closed with white volume of ‘no demand’, possibly hinting that the recent move higher for the VIX could now be running out of steam. Any further move higher will need to breach the 21 price region where strong resistance awaits. To the downside, the platform of support is now in place in the 13 area on the chart, and should this be breached then we can expect to see further strong gains for equity markets towards the end of the year, but as always, once the VIX moves into single figures, then  this will signal the end of the bull run, and a possible sharp sell of in due course.

If you would like to see Hawkeye in action, simply click the link below to join one of our Free Live Training Rooms where we trade using the full suite of tools and indicators across all the markets.

Where next for the YM mini Dow

The YM mini dow index on the daily chart
YM Mini Dow – daily chart

Like many of the major equity markets around the world, the mini Dow index has now reached a critical level, with the daily September contract closing at 13,079 ahead of the 3 day weekend with markets closed on Monday for the US labor day.

Since March, the index has flirted with the 13,200 level on several occasions and each time, Hawkeye has delivered an isolated pivot high, giving a clear signal of future weakness at this level. These pivots have now created a strong level of price resistance in this area, and if the recent bullish momentum is to continue, then we will need to see a clear break and hold above this level. Friday’s price action suggests something different in the short term however, with the first red trend dot appearing on the daily YM chart, coupled with a transition in the Hawkeye Heatmap from dark green to bright red, a strong bearish signal.

This change in sentiment has also been accompanied by rising selling volume over the last few days, once again suggesting a bearish move lower, with the isolated pivot high of Monday adding more weight to this analysis. All of this has been reflected in the VIX which has been rising strongly over the last few days, and with the FED sitting firmly on the fence for the time being, we are in for some interesting times for equity markets and the YM in particular as traders and investors return to the markets with a vengeance following the long summer recess.

If you would like to see Hawkeye in action, simply click the link below to join one of our Free Live Training Rooms where we trade using the full suite of tools and indicators across all the markets.

The USD index turns firmly bearish

dollar index daily chart using Hawkeye
USD index daily chart – September futures contract

Whatever the market you are trading, either as an investor or as a speculator, having a view on the US dollar is key to longer term trading success, which is where the USD index steps in. The US dollar is the currency of first reserve and underpins all the principle capital markets, and the dollar index gives us a clear view of dollar strength or weakness against a basket of major currencies. As a result the daily dollar index chart gives us powerful signals as to the future direction for all the major markets, since all are interrelated by the associated currency flows both from and to the US dollar.

Over the last few months, the USD index has traded in a relatively narrow range, testing the 85 price point to the upside and the 81 region to the downside on the September futures contract. Much of this sideways price action was as a result of the markets waiting for some clear signals from the Federal Reserve, and Ben Bernanke in particular on any future stimulus for the US economy, which is still struggling to recover, with stagnant growth and a mountain of debt, coupled with insufficient new jobs. Indeed, whilst the headline unemployment rate is quoted at around 9%, the true figure is far more shocking, and believed to be well into double figures. Conservative estimates put the figure nearer 20% rather than 10%. It is against this backdrop that the FED has been waiting to act, hinting at a further round of quantitative easing, or QE3 – printing money which are then converted to bonds.

Friday’s long awaited statement from Mr Bernanke failed to deliver any clear statements, but merely hinted at further stimulus, and that the Federal Reserve was ‘ready to pull the rigger’. This was sufficient to weaken the US dollar on the daily chart, with the USD index closing the session at 81.21, it’s lowest level for three months, as the index now tests this key support region which is now a critical price level.

Hawkeye has been giving us strong signals of this bearish sentiment as far back as the second week in August when an aggressive Roadkill signal appeared on the chart. Since then the daily trend has continued to remain red, with the three day trend now moving into white congestion and likely to follow suit shortly. With bearish volume in both timeframes and further confirming Roadkill signals, the outlook is bearish for the US dollar, and this is likely to be reflected in gains for all the major commodities, as well as strength in the related currency majors, bullish equity markets and outflows from bonds.

If the index breaks and holds below the 80.00 level on the daily chart, then we can expect to see the dollar index move to test the 78.50 lows of earlier this year in due course.

If you would like to see Hawkeye in action, simply click the link below to join one of our Free Live Training Rooms where we trade using the full suite of tools and indicators across all the markets.

This Week’s Market Forecast – Risk On Returns!

Last week was the worst Thanksgiving week on Wall Street since 1941. Traders and investors reeled from the problems in Europe, as well as the collapse of the US budget deficit talks. The S&P 500 fell almost 5% on the week, closing just below the key 1160 level. The Dow was also down almost 5% over the week, and the Nasdaq was down by 5.1%.

The selloff really took place following the disastrous German bond auction which saw demand for the 10 year Bund at its lowest since the euro was created. Investors rushed to safety but redefined safety to exclude Bunds, moving instead into US Treasuries, UK Gilts, and Nordic Bonds.

With investors shunning German Bunds, the euro duly collapsed, particularly against the US dollar as the EURUSD tested the 1.32 level before moving back higher. As one commentator has said, this now appears to be the “apocalypse” trade – if German bonds cannot attract investors, and are no longer considered a safe haven, surely it’s now all over for the euro?

As always, nothing is quite as it seems and this may be a hasty conclusion – at least for this week!! The German 10 year bond auction may have gone badly but short dated German debt, known as Bubills, have never been in such high demand even with yields turning negative. In other words, if investors are willing to PAY to lend to the German government, it is hardly a sign of deep fear about Germany or even the euro.

Germany is not under threat – yet – but traders and investors are increasingly trading the euro and Germany together. Since September, the value of the euro against the US dollar has moved almost inversely to German credit default swaps. For those of you who may not know, a credit default swap is a measure of how likely a country is to default on its debt. In other words, traders and investors now care far more about whether they will get their money back than how much they can earn. This also makes them super-sensitive to any hint of danger which leads to much greater market volatility.

The start to this week’s trading has seen the market determined to shake off last week’s doom and gloom by seizing on record Black Friday retail sales and reports that French officials are pushing for a deal on Eurozone fiscal union. This has helped to reverse some of last week’s heavy losses with the US markets having their best days so far in November, with the S&P moving almost 3% higher, while on Monday all the DOW 30 stocks ended higher too.

It remains to be seen whether this swing higher will be maintained, not least because the $VIX – although managed to close lower on Monday – which is positive for equities, is still above 30. If the $VIX does manage to breakdown and move back towards the mid-20s then we could see a rally moving forward into December.

What is also interesting is that according to the latest CFTC data, net euro shorts have also fallen to 85k from last week’s 100k plus. In other words, we could be seeing a short term bounce higher for markets and even the start of a “Santa Claus” rally.

However, with this week’s fundamental news focusing on employment with the non-farm payroll (NFP) release, due on Friday, traders and investors need to take care. The first big number traders (and investors) should watch is the ADP release on Wednesday, a precursor to the NFP. Over a few months this once reliable release, which is based on payroll figures, has become a little less accurate in forecasting the NFP data two days later. Previously, it had always given traders a “heads up” on the Friday data but recently has become increasingly inaccurate in these volatile markets.

Wednesday’s forecast is for a number at 131k, up slightly from last month’s 110k. This is followed by Canadian GDP which is forecast to come in flat at 0.3%.

Thursday’s big number comes from China with the PMI, which is forecast to show a decline from last month’s 50.4 down to 49.8. So expect to see this reflected overnight in the Asian trading session should this number come in wildly at the odds with the forecast.

Thursday sees the unemployment figures in the US, which are forecast to come in flat but we also have the ISM data – an equivalent of the Chinese PMI. Traders and investors watch the ISM as it is considered a leading indicator of the economy because it is based on a large survey of purchasing managers of major companies. Any number above 50 indicates an economy that is expanding and below 50 suggests an economy that is contracting – so this is a very important number.

The week ends, of course, with the general razzamatazz of the NFP – a release which will affect all markets. The forecast is for an increase from 80k last time to 119k this time. This release always causes markets to over-react and traders should wait for any volatility to die down before entering any trade.

Hawkeye users can, of course, trade these markets with confidence because Hawkeye has been designed:

  1. To give traders the edge needed to succeed, as it gets them onto the right side of the market time and time again.
  2. To help traders control their emotions by giving them the confidence to stay in.
  3. To help traders control their risk by giving them clear signals of when to stay in and when to get out, thereby protecting your equity.

All of these things are vital in difficult and turbulent markets such as these! But how is Hawkeye able to do this?

Because Hawkeye has been created to exploit the power of the only leading indicator that traders and investors need, which is VOLUME. This is the foundation stone of Hawkeye on which all the indicators are built. So regardless of whether you are a day trader, position trader, swing trader, scalper, or any other kind of trader, VOLUME should lie at the heart of your trading.

As an example of why volume is such a powerful indicator, Nigel was discussing the gold price in Friday’s trading room. As many of you know, gold has recently had a significant pullback with many questioning whether the recent bull run has now ended for the precious metal.

Indeed in last week’s trading room, the monthly chart was showing some significant resistance as the volume has started to change from green to white (or neutral). In addition, the Hawkeye Heatmap on the weekly chart is also turning dark red – all signals suggesting we can expect to see a further pullback for gold. The daily chart also confirms this view with the short term trend now also turning red, selling volume clearly evident over the last week and any break and hold below the $1600 per ounce level could see a further decline for the metal in due course.

If you would like to see Hawkeye in action and how we use these tools ourselves, then simply sign up for one of the FREE Live Training Rooms! Become the trader you deserve to be!

Nigel Hawkes’ training room covers the commodity markets, where he explains his latest trades and how to select low risk, high probability trades before moving onto the day trader’s favorite instrument – the e-mini. Here you will be able to see the genius that is Hawkeye as Nigel uses the Hawkeye GearBox and GearChanger, two unique indicators to Hawkeye, which ensure we trade at the right speed and in harmony with the market.

To register for our Free Live Training Room each Thursday, Register Here! Forex begins at 8:00am, and Futures/Equities begins at 9:30am, Eastern US time.

Patience – A Key for Success

Nigel Hawkes warns against missing correct timing on trades and how to use the Hawkeye ChartTools, GearBox and GearChanger, at their full potential.  Be sure to have the patience to wait for perfect setups.  Think like a hunter and you will be trading for success.

Click on the image below to view this week’s video update:

We demonstrate the same methods live in our Free Training Room. Come join the fun every week. To see the current schedule and register to attend, Register Here.

Making Profits in Swing Trading – See How VSA Does It!

Continuing the Hawkeye Traders Education Series


Nigel Hawkes is a market leader and expert in volume spread analysis. Over the past 20 plus years he has studied and applied volume analysis to every market in every timeframe. What he has found is that when using volume and price together with the desired timeframe he can successfully interpret market direction. He took his findings and created a group of ChartTools that provide consistency to his analysis within the framework of an easy to follow methodology.

The Hawkeye Traders Methodology is designed to get traders and investors on the right side of the market. The important word in that previous statement is methodology. At Hawkeye we do not simply provide indicators to traders. We provide education and teach traders how to interpret the market through volume and price and how to trade it. This training includes how to read the signals, where to enter, where to exit for both profit targets and stops and what timeframes to use based off your style of trading. It does not matter if you are a scalper, day-trader, swing-trader or investor. The Hawkeye Methodology can be used to interpret the markets of your choice. Over the next few weeks we are going to show you through charts and our analysis how this is done.

In Series 1,
we covered BP. In Series 2, we covered Jim Cramer’s Picks. In that analysis there were multiple stocks currently trading in congestion. In Series 3, we had analyzed several stocks in congestion and showed how to avoid trades when congestion is present. This week, we will show how Volume Spread Analysis (VSA) will give you the edge in Swing Trading.  Join Nigel Hawkes, the world’s leading authority on VSA, as he teaches students all about VSA at the Hawkeye Seminar (27-28 Sep 10) in sunny West Palm Beach, FL. You do not want to miss out on this opportunity to learn directly from Nigel about the power of Volume Spread Analysis.

SERIES 4: Swing Trading Indices.

Making Profits in Swing Trading Using Volume Spread Analysis.


Time is a crucial element to trading. The smoother we make price and volume the easier it is to trade it. If we look at current Nasdaq and Russell 2000 charts we can see that on June 23, 2010, we have increasing selling volume on a bar that closed near its mid range. Volume Spread Analysis tells us that on this bar sellers came in strong and we should be expecting decreasing price movement.

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When the June 24, 2010 bar opened Hawkeye gave us a short signal on the Russell 2000 and the Nasdaq. Here at Hawkeye Traders we like to wait for both indices to confirm market direction increasing the probabilities for trend continuation.

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Towards the end of the downward push level 3 was triggered in both markets on July 1, 2010. On this bar the Russell closed near the midrange of the bar on increasing green volume and the Nasdaq closed in the upper quadrant of the bar on increasing green volume. This tells us that buyers are present in the market and a pullback should be expected. During this market condition we want to see sellers come back in the market to increase probabilities of downward trend continuation. On July 2, 2010, red volume came back in the market confirming sellers reentry. The bar closed near its low in both markets on increasing selling volume. In terms of Volume Spread Analysis this is a bearish signal.

To learn more about the power of Volume Spread Analysis, attend one of our 2 or 3-day seminars as we explain in detail how to interpret volume in terms of price spread. Do not miss out on the opportunity to learn this powerful trading technique.

 

Good Trading Everyone,

Hawkeye Traders
Understanding Price and Volume: Now that’s trading!!!