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Technical Investment Methods - Analyzing market trends with technical methods.
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Posted by brucekenison1@yahoo.com on August 31, 2008, 4:43 am
I made my first commodity trade in 1968 while still a college
student working towards a Master's Degree in Business Finance and
Investments. I was fascinated by the leverage you could get on your
investment capital by putting up a relatively small margin fee in
order to control a much larger quantity of some commodity. This left
open the potential for substantial gains. And, by using stop loss
points you would have supposedly limited risk. Since I was a cash-
strapped student with a relatively small amount to invest, this really
appealed to me.
So, one memorable Tuesday afternoon, I skipped gym class and hiked
downtown to open my first commodity trading account. I was nervous as
a cat. But, I knew it was something I just had to do. The broker was
understanding and after about an hour of filling out forms and waiting
for an OK from headquarters, I plunked my money down and began what I
imagined would be an illustrative career as a professional commodity
trader. I just couldn't wait to get started.
Early the next morning, I was chomping at the bit and decided to
start off by trading corn futures. Then over the next two weeks, the
worst thing that could happen to a beginning trader happened to me. I
had three big winning trades in a row. I was convinced I was the King
Kong of trading. Frankly, I couldn't figure out why everyone told me
trading was so hard to be successful at. Then, as you've probably
guessed the fourth trade murdered me. I lost everything I had already
made plus $200 more than I even had in my account! So much for the
supposedly limited risk. You can guess where the book fund for that
quarter went. My trading career appeared over about as fast as air
rushing out of a balloon.
I went away from that experience licking my wounds, but absolutely
convinced there was an underlying and identifiable pattern or rhythm
in the markets. I could sense it. I knew it was there. But, I had
no idea what it was. I wrestled with questions of how such a thing
could exist. Or more to the point, since I saw evidence of it's
actual existence, how could I prove it existed? Even though initially
I even questioned my own perceptions, I just knew in my bones it was
there. I was determined to do whatever it took to identify it, pick
it apart and ultimately find out exactly what made it tick.
It was then I realized that if you could discover any sort of regular
or consistent pattern in market movements, you would have the
key to successful trading. Why? Because you then could trade in
sync with the timing patterns controlling market movement. This was
certainly a goal worth devoting a lifetime of research to. And, as it
turns out, I have.
I started my search by going to the source which was the markets
themselves! I studied charts from every market I could get my hands
on. I knew that if there was a pattern that repeated itself in the
markets, I could find it. That is, I could find it if I was given
enough time, effort and stacks of charts to look at.
After night after night of painstaking study, a bit of inspiration
arrived from somewhere. I surmised that by simply using daily
futures charts where each vertical bar represents a single trading
day, I could possibly detect tradable patterns as reversal points
occurred in normal ongoing markets. Specifically, I was looking for
reversals that tended to happen on the same number counts over and
over again when counting bars on a price chart forward in time from
any recognizable high or low point in the past.
It was about this time that a fellow trader related to me that W.
D. Gann, the world famous market timer, was purported to have said "if
you want to know how to time the markets, read the Bible three
times."
I had generally studied the writings of Gann and was frankly never
able to get much out of his cryptic and obscure ramblings other than
to note his focus on time as opposed to price pattern analysis.
Nevertheless, this got me to thinking. Was it in fact possible for
specific number counts to spotlight points in time where reversal
energy would be demonstrably exposed in the future? My research
indicated that was indeed the case with the number counts I had
already identified in my relentless search through endless chart
examples. But now, this new wrinkle presented itself. Was it possible
as some sort of confirming device that these same numbers are also
numbers prominently mentioned in the sacred texts?
Since it was my custom to regularly read in the Bible, I decided to
keep a notebook handy to jot down specific numbers mentioned in the
Bible as I came across them. I had no real expectations one way or
the other, but I was looking forward to comparing the numbers my
private research was turning up with the numbers prominently mentioned
in the Bible.
So what did I find? Actually, it was a head scratching puzzle.
What I noticed right away after collecting months of references was
that there were an amazing number of near misses. That is, numbers
from the Bible were in most cases off by just one number count from
the numbers I had already identified through research.
This wasn't the only thing that bothered me. I'd been in a quandary
for years over a quotation from Jesus found in Luke 24:46 which said
"Thus it is written, and thus it behooved Christ to suffer, and to
rise from the dead the third day."
With my persistent mindset, I just couldn't see how Sunday was the
third day. It seemed to me that if Christ was crucified on Friday,
then Monday should be the third day. It had been a long running and
seemingly irreconcilable question in my mind.
Then out of the blue it struck me. To make the biblical order work,
you would have to count Friday as day number one! Why this had
been so hard for me to see was I suppose understandable. Counting
that way was just not how we were taught to count since grade school.
Nevertheless, this was a critical breakthrough. I had now learned how
God counts.
The next step was obvious. I would use this newly learned counting
method on the charts I was studying and see how the number counts
compared with what I was doing before. I picked up one of my trusty
old charts and started counting days forward from a prominent top
reversal point on the chart using the top day as count number one.
Immediately, it jumped off the page at me. By adjusting the number
count by just one day to reflect the new counting method, the
correlation between Bible numbers and specific number counts I had
already collected was now almost perfectly in sync.
I say almost perfectly because what showed up was a pattern ofso
called hits where actual reversal days occurring on the chart would
tend to hit (1) on the day just before, (2) right on or (3) the day
just after the counting number day.
This was heady stuff. Clearly, by using the 40 different and proven
counting numbers so painstakingly identified through research and
confirmed in most cases by biblical references, I could now exactly
pinpoint into the future perfectly defined and extremely powerful 3
day reversal zones. Or, put another way, I could spotlight
identifiable timing windows. And, all this on any chart for any
market at any time.
It's important to note that the strongest reversal energy always
resides in the center day of the 3 day zone or window. I don't know
why, but the image of Christ crucified between 2 malefactors came to
mind as I worked with this material. And, as it turns out, the idea
of a 3 unit zone or window with the most powerful reversal energy
focused on the center unit became over time an even more powerful
research concept as we shall soon see.
And, here's another curiosity. Apparently, there's no way to
determine or foretell whether anticipated reversals will be up or
down reversals until you get there. As the market starts to actually
trade up or down into the zone or window, then and only then does the
market tip it's hand to us.
And, here's the really great part. What I discovered over 40 years
ago is that this happens exactly at the critical moment to do
something from a market timing standpoint. That is, just before the
market reverses and while concurrently pointing us in the direction
the market has just revealed it's going to go. And, only those that
know the language of the markets understand what the markets are
saying when they speak.
Amazingly, the markets literally hand us top secret timing
information at the critical moment for us to use it for positioning
trades in the right direction. This is precisely the right time to
be totally in sync with the flow of market movement.
Now, here's how it works. If a market is initially trading down
into a 3 day reversal zone, then we should expect a reversal of some
consequence to occur to the upside during the period of that reversal
zone. The anticipated reversal up is then confirmed and a buy signal
is generated on any subsequent day that sees a rally above a previous
day's high. It couldn't be more simple.
And conversely, if a market initially trades up into a 3 day reversal
zone, we should expect a reversal to the downside. The anticipated
reversal is then confirmed and a sell signal is generated by any
subsequent drop below a previous day's low.
Another major plus is that this strategy automatically generates
close-in stops and or stop/reverse points just on the other side of
these recently anticipated and confirmed reversals. This cuts our
risk to the bone while at the same time maximizing profit potential.
It was at this point that it suddenly occurred to me that what was
really happening here in this march of black bars across price charts
was the ongoing record in time of an unbelievable projection process.
This counting progression appears to be tracking some hitherto unknown
energy ripples that radiate forward in time from high and low reversal
points in the past.
My research proved this process is indeed ongoing. It's constantly
radiating energy off reversal points in the past which consequently
projects three day timing windows or reversal zones into the future.
This amazing reversal energy generates future reversal points in
reliable interval patterns falling precisely on certain specific
number
counts which I had now painstakingly identified.
But, how could this be? All I could imagine was some kind of
mysterious wave energy must be radiating like a beacon off top or
bottom reversal points in the past. These waves are continually
moving out into the future in varying degrees of intensity, set in
irregular yet constant intervals and with enough structured energy to
dramatically affect directional turns in any market in exactly the
same manner and timing count sequence. And all this, at precisely and
objectively projected points in time in the future.
Sit back for a moment and think about this. The magnitude of this
discovery or literal revelation is mind boggling in it's implication
and absolutely astounding in it's import! It's almost as if the
curtain has been ripped back and we're now privileged to look
lingeringly at the fabric of space and time. We are now witness to
the framework God employs to organize time and event progressions.
Shockingly, it would appear that nothing happens by chance.
Instinctively, I realized this method of market timing could not be
called fundamental or technical analysis. It is rather an entirely
new and unique method of market timing analysis which I dubbed
temporal analysis since it is based on time instead of price. Indeed,
I could now see that one of the greatest hallmarks of the newly named
Kenison Counting Numbers is the total lack of subjectivity in
producing such valuable timing projections.
No guesswork is ever involved. The Kenison Counting Numbers
sequence is easy to use and understand. It even appeals to those who
have never traded before and need someone to show them the ropes. You
don't need a calculator, computer program or any kind of specialized
foreknowledge. The signals projected are very precise and completely
objective. It's all right there on the chart. Remember, this is
purely eyeball to chart analysis. The counting numbers pinpoint
exactly where the next reversal energy in the market will be exposed.
And correspondingly, you then know exactly where the next projected
reversal should be expected. It's that simple. And, where do you get
the charts you need? They're free on the internet.
And, here's another thing. Kenison Counting Numbers will never
become obsolete. They will continue to work with absolute objectivity
for all the years of you or your grandson's trading careers. You will
be able to pinpoint exactly within one day of specific future number
counts where market reversals of varying degrees of magnitude should
appear.
How do we know this? Simply because years of exhaustive historical
research has proven that whether you're looking at charts
from forty years ago, last year or last week, the analysis would have
worked exactly the same and with exactly the same phenomenal results.
And remember, these are the very same timing count numbers
confirmed historically and through study of the scriptures to have
proven and very definite reversal energy associated with them.
Believe me, after learning the Kenison Counting Numbers market timing
method, you will never look at a price chart the same again.
I was also extremely gratified to learn through decades of ongoing
research that Kenison Counting Numbers work equally well in projecting
future reversal points in any market anywhere in the world,
irregardless of whether it's a futures, options, stock, forex or cash
market.
So, exactly how do Kenison Counting Numbers work?
This totally unique and extremely powerful method's ability to
project important market highs and lows in the future is uncanny.
How does it do it? After decades of personal research, I have
identified the irregular number sequence the market itself observes.
Just count the bars on a price chart forward from any market high or
low point in the past and the Kenison Counting Numbers will tell you
exactly on which numbers in the sequence you should expect powerful
reversal energy to be exposed in the future. And, all this is
accomplished with a very high degree of reliability! This allows
traders to anticipate, confirm and then act on potentially profitable
trading turns that the uninformed don't even see coming or have the
slightest idea can be detected in advance.
With this new life long knowledge, you can spend just moments with a
price chart and know with total confidence what your course of action
should be and with absolute clarity what the potential risks
are.There's no need to check with anyone first. You're the expert.
Why? Because when you understand this market timing method you'll
know with quiet confidence what the market itself is telling you about
current trends and potentially explosive turning points and exactly
when to expect them! Your broker will start asking you for advice.
Believe me, I know.
When you see how by simply counting forward in time you can
project important reversal points in the future, you'll be hooked.
I've been hooked now for over 40 years and I'm still fascinated on a
daily basis as I watch these turns occur like clockwork in timing
windows projected weeks and even months before.
Traders can quickly become expert in using all 40 of the
unbelievably powerful Kenison Counting Numbers.
One of the most impressive Kenison Counting Numbers is represented by
Zone 14, especially when using simple triangulation techniques in
combination with other counting numbers to project extremely powerful
conjunction and convergence reversal zones. These special amplified
reversals lead to extremely dynamic high-velocity directional market
moves. Other traders marvel at windfall profits that seem to come
out of nowhere. Kenison Counting Numbers is the tool that alerts you
beforehand allowing you the opportunity to profit from these
explosive market moves.
Traders are amazed to discover the natural and irregular rhythm
identified in the markets. It's a rhythm that is constant and traces
out exactly the same pattern for all markets worldwide. It's shocking
to see how invariably reversals occur on the same number counts in the
Kenison Counting Numbers sequence over and over again.
And now another amazing fact concerning the Kenison Counting
Numbers method. It works exactly the same no matter what time frame
chart you're looking at. As we already know if you apply the
counting numbers to a daily chart, you will project daily reversals
into the future. But surprisingly, If you also apply it to a weekly
chart, you will project weekly reversal points into the future. In
fact, the same Kenison Counting Numbers sequence works equally well
when applied to monthly, weekly, daily or intra-day charts.
At this point another phenomenal discovery was made. I discovered you
could determine the most likely actual future reversal day, week or
month within each projected reversal zone by using the Kenison
Counting Numbers to count backward in time from each of the three
days, weeks or months within each reversal zone. How does this work?
Quite simply, when you count backwards in the fashion mentioned above,
you will notice that significant high and low points in the past fall
exactly on specific number counts in the Kenison Counting Number
sequence. But
this happens only if you are counting backwards from the most likely
actual future day, week or month where the market will in fact
reverse. As I witnessed this mirror image or echo effect in action, I
realized this is truly a miracle.
This is absolutely astounding when you realize by counting forward
or backwards in time that reversal energy is exposed on the same
number counts in the Kenison Counting Numbers sequence irregardless of
whether you're counting months, weeks, days or 15 minute intervals on
an intra-day price chart.
Witness this market timing powerhouse in action in real markets in
real time and you'll be totally amazed at the magnitude of this
discovery.
Copyright (c) 2008 Bruce Kenison. All rights reserved.
--------------
Bruce Kenison is the founder of several market timing advisory
services employing the Kenison Counting Numbers precision market
timing method and is the Editor of Bruce Kenison's Market Timing
Signals ezine and newsletter available FREE to investors and hedgers.
He is also president of a publishing and seminar company that recently
published the 5th Edition of Bruce Kenison's Market Timing Home Study
Course. For a FREE subscription to the ezine or newsletter and
information on products and services, send a blank e-mail with
"Subscribe" in the subject line to: brucekenison1@yahoo.com
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