I am a 37-year veteran of the markets. I started on the floor of the Chicago Mercantile Exchange (CME) in January 1979. I lived and worked for 12 years in London, England trading on the floor of the London International Financial Futures Exchange (LIFFE). I was a pit-trader specializing in German Bunds, British Gilts and US Treasury Bonds. I traded the indices from outside the pit. In all honesty, there are not many futures markets I have not traded.
In 2001 I was standing on the floor of the CME when the planes hit the Twin Towers. The market reaction for weeks and months after 9/11 was identical to the Crash of 1987. Stocks went down and treasuries went up. I traded the Crash of 1987. I watched this movie before.
Traders on the floor of the CME started picking my brain every day about market direction. By 2002, I was selling my brain on a consultancy basis writing about the futures markets. I mainly write about AND TRADE the indices, treasuries, currencies and gold. When I make a swing trade, I report it to my client base via the website at Simpler Futures.
I have been known to have a point on the grain markets too. Actually, I am looking for a big move higher in the grains this year based on a proprietary trading system I was made privy to in 2005.
If you have been following my blog posts in May, you have seen me call the May bottom in the stock market based on the way the NASDAQ (NDX) traded. This is old-fashion, tape-reading, technical analysis. "I love when the NDX leads."
Over the past 5-6 years I have seen the NDX trade in this manner before…that being the NDX lagging behind the other indexes to the upside and leading the indexes to the downside.
And every time it does lag behind, in a matter of weeks this market is playing catch-up to the other indexes; leading all of Wall Street higher…just the way I like it. Look at NDX in May ahead 3.93%. And they all said, “Sell in May and Go Away.” Don’t go too far is what I say.
NDX is the only index trading lower in 2016.
One look at the futures chart posted below (NQM) tells me, NDX and NQM will soon be trading higher in 2016. You do not SHORT vertical type moves like we are seeing here…especially when everyone is either short ("Sell in May and Go Away") or bearish. The chart is self-explanatory.
Thanks to the internet the world got just a bit more connected. The NASDAQ has been the market leader to the upside in the 90’s and to the downside when the tech bubble burst. The NDX bottomed in November 2008. The other indexes bottomed in March 2009. The NDX waved a warning flag to the bears in May 2016 and I have been all over it.
I will continue to make my market calls using old-fashion, tape-reading, technical analysis. I will continue to believe in the NASDAQ. I love when the NDX leads…just the way it has been for the past twenty-plus years. "If it’s not broken, DON’T FIX IT."
As the 1979 commercial stated, “At Simpler Trading, we do good old-fashion hard work/research. We make money the old-fashion way. We earn it."
Smith Barney Commercial 1979
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