Hewison:Technicals Fundamentals & Stress Test Video
Adam Hewison’s back to work! This morning, he released a free 5-minute market update video in which he managed to discuss the recent rally from a technical analysis standpoint (trade triangles have continued to be bullish), fundamental analysis viewpoint (are things ‘really’ ok?), Obama’s “Honeymoon,” and finally his thoughts on the Bank Stress Tests – ambitious for such a brief video!
(Clicking the image opens the video page at Market Club)
Officially entitled “The Bank Stress Tests – Do You Believe Them?“, Hewison writes in the introduction to the video:
“Since my return from holiday, I have been scratching my head wondering why the market (in this case the S&P) has moved so high for little or no reason. The economy still appears to be very much on the defensive with unemployment rising and the business environment still on a slippery slope. I made this video before the stress test was announced and I suspect that all of the stress test leaks have already being discounted by the market.
My new video is a follow-up from my April 14th video that I made before I left for New Zealand. If you have a few minutes, please take the time to view it. I think you will find it interesting that my observations may conflict with current market trend. With the Obama honeymoon coming to an end, we are going to see how the markets move without government influence. There has never been a government that was able to dodge a major business cycle… and this one sure is a doozy.”
The Market Club “Trade Triangles” are a proprietary combination of technical indicators, but from what I can tell, they’re mostly based in a Trend Following Methodology (whose goal is to have you assess the larger timeframe trend and align yourself in that direction with signals – signals continue until a confirmed reversal is shown).
Certain indicators fare better in different market conditions, and in run-away trends like this, standard oscillators (as I use) tend to fare poorly, giving lengthy overbought readings and false divergences. The key is sticking to a consistent methodology and not jumping all around with every sort of technical indicator in my opinion – know the strengths and weaknesses of your indicators and when to take certain signals (as in divergences in a run-away trend) with a grain of salt.
Anyway, Hewison shares his thoughts on the current state of the market and gives a few tidbits for you to think about going forward.
Corey Rosenbloom, CMT
Follow Corey on Twitter: http://twitter.com/afraidtotrade