Outlook for Monday

I believe we are going to have a strong up day on Monday, possibly Tuesday as well. Lets take a look at the charts.

I am using two new indicators, the Money Flow Index (MFI) and the Commodity Flow Index (CFI). I find that they great back up indicators to the RSI (top indicator) that helps weed out false top or bottom signals. If all three are in agreement, its a much stronger signal. The MACD I was using was kind of a dummy trailing signal, giving me signals after the fact. Sort of like getting hit by a car in an intersection and then immediately having someone shout, "Look out!". When you are sorting through technical indicators with any program you are using, go through them all and apply them one by one to your charts to see how they did over the last few months against the actual price movement chart (such as what I use, like candlesticks, showing the open and close of the market for each day as it happened or if live, as it is happening) and see if the indicator in question is signaling change before the actual change movement of the stock. Now go back even further with your eye and see if this pattern is in fact the case. If so, then you have something valuable. If the indicator instead responds to the movement of the stock after the fact, then its not worth too much then, is it?

Here is a good article on what has been causing the market turmoil as of late: https://www.weforum.org/agenda/2016/02/12-factors-causing-the-current-market-turmoil

Another thing I am watching is the match for the next world market collapse. http://www.economist.com/news/leaders/21698240-it-question-when-not-if-real-trouble-will-hit-china-coming-debt-bust 

As those two items on china are still simmering, and the Fed is signalling that they wont raise interest rates, I feel that we are in a good position for a climb on Monday. I have made the call to purchase QQQ calls on Friday anticipating this. If you have not done this, I would wait and watch the open. If the premarkets are up 10 minutes before open, get on in at open. If they are down 10 minutes before open wait for the day to straighten up, it should go positive by 2 hours after open.

Thats all for now,

Tradinginsider