www.GordonTLong.

com

Issue : Beta-October Volume : 2011-Pilots

GLOBAL MARKETS:
THE TOP IS ALREADY IN
$FTSE $SPX $COMPQ
21%
May 2011

EWC
31%
Mar 2011

$RTSI $N100
30%
Mar 2011

20%

May 2011

25%

jan 2011

43%

Apr 2011

EWJ $CNXN
25%
Nov 2010

$HSI
35%
Nov 2010

20%

Feb 2011

EWZ
37%
April 2011

$FZA
28%
May 2011

S&P/ASX200
25%
Apr 2010

NYSE OVERBOUGHT / OVERSOLD OEX OPEN INTEREST (PUT/CALL) MCCLELLAN OSCILLATOR NATIONAL ASSOCIATION OF ACTIVE INVESTMENT MANAGERS MARKEET MOVES:CURRENT & FUTURE MARKET ANALYTICS

VOLATILITY: VIX RISK SUMMARY Margin Levels Silver Gold US Dollar Index

MISREPRESENTATIONS IN ECONOMIC THEORY MEDIA MATRIX & GENERAL REALITY

BROKEN WINDOW FALLACY : WHAT DO YOU KNOW?

Welcome

Economic & Technical Analysis for the Active Trader

WELCOME TO OUR 6TH ISSUE

As always we bring you our regular sections outlining what you need to know about our current markets. This months Featured Articles should give you something to think about and our Mentor leads by example. Our Cover Story highlights world markets to show that the worm has turned on a global scale. NYSE overbought/oversold, margin levels and open put/call interest are just a few of the focuses from the All Seeing Eye. The Need to Know TA highlights our current and future moves through three different perspectives and also gives us further Market Analytics on our current position. Our Risk assessment highlights volatility and shows us a RISK Analytics Summary of 11 different risk factors. We continue to try and update the look and quality of the publication. If there is something you would like to see, something that would help your trading, please let us know. Good Trading

TRIGGER$ Media Publications For all inquiries, comments and contact please feel free to email us at: triggers@GordonTLong.com Main contributor : Gordon T. Long Market Research & Analytics Publisher & Editor : GoldenPhi Analytical Summaries: GoldenPhi See page 28 for a complete list of our contributors.

Contents

4 14 20 28

GLOBAL MARKETS:
THE TOP IS ALREADY IN
COVER STORY

Economic & Technical Analysis for the Active Trader

8 17 26

THE ALL SEEING EYE

NYSE OVERBOUGHT / OVERSOLD MARGIN LEVELS OEX OPEN INTEREST (PUT/CALL) MCCLELLAN OSCILLATOR NATIONAL ASSOCIATION OF ACTIVE INVESTMENT MANAGERS

ON MARKET & ECONOMIC INDICATORS

MARKET MOVES: CURRENT & FUTURE MARKET ANALYTICS

TECHNICAL ANALYSIS

NEED TO KNOW

THE VAULT
SILVER GOLD U.S. DOLLAR INDEX

CURRENCIES & METALS

ASSESSMENT

RISK

TRADERS MENTOR
TECHNICAL ANALYSIS & TRADING STRATEGY
TRIGGER$ CHART READING

VOLATILITY: VIX RISK SUMMARY

OPEN FORUMS

LETTERS TO THE EDITOR READERS COMMENTS DISCUSSIONS

1. WELCOME TO THE 6TH ISSUE 2. CONTENTS 3. TECHNI-FUNDAMENTALISM 7. METHODOLOGY 25. DISCLAIMER 29. MAIN CONTRIBUTOR / SOURCE / GTL

13 22

Featured Articles

WHAT DO YOU KNOW?

MISREPRESENTATIONS IN ECONOMIC THEORY MEDIA MATRIX & GENERAL REALITY

BROKEN WINDOW FALLACY :

Techni Fundamentalism

Economic & Technical Analysis for the Active Trader

TechniFundamentalism
TRIGGER$ publications combine both Technical Analysis and Fundamental Analysis together offering unique (and often correct) perspectives on the Global Markets. The backbone of this research is done by Gordon T. Long, Market Research & Analytics which is subscribed to by Professional Managers, Private Funds, Traders and Analysts worldwide. Every month Market Research & Analytics publishes three reports totalling more then 380 pages of detailed Technical Analysis and in depth Fundamentals. If you dont find our publication detailed enough, we recommend you consider theirs in addition to this one. For the rest of us, TRIGGER$ offers a distilled version of the 380 pages in a readable format for use in your daily due diligence. Read and understand what the professionals are reading without having to be a Professional Analyst or Technician. Successfully navigating todays markets requires information from a broad variety of sources. Triggers examines it all. From Macro Geo Political to daily events yearly cycles to break out points on a minute chart: we look at and analyze as much of the information as possible, pulling out the relevant and giving you what you need to know to make the right decisions on a daily basis. An initial or beginning publication occurs every month, both in a printable pdf as well as online. From there, the online version is updated daily with current events, charts, news and any relevant information pertaining to trading. The completed version of the publication isnt actually done until the last day of updates which occurs right up until the publication of the next issue. As well as the Traditional Methods commonly used, Market Research & Analytics has developed proprietary analytics for both Technical and Fundamental Analysis and has designed a methodology to combine the two whereby the synthesis delivers a truly unique and forward thinking analysis that gives cutting edge insight. TechniFundamentalism

Cover Story
Economic & Technical Analysis for the Active Trader

COVER STORY:

You have heard of the troubles from Iceland and Greece. You know that the U.S. markets aren't exactly at their peak either. What you may not be aware of however, is just how wide spread the troubles go. Markets all around the globe have been 'rolling over' now for the past few years. Not all of them are headed the way of Iceland or Greece (well, not right yet anyhow) but the sheer number of world markets that are down significantly from their last major highs should not go without consideration. That so many are all down together suggests that (a) the real issues are not isolated to the countries themselves, and, (b) a market top has been put in.

Debt seems to be the common denominator across the board. For those of you who have read John Perkins Economic Hitmen, you know that this isn't just 'happenstance' or a result of poor planning. It is recommended that you do a little of your own research on the perspective that the accumulation of global debt has been purposefully created and that it does benefit a select few. It has a purpose. Along these lines, we would also recommend our Cover Story from last issue: Shifting RISK to the Innocent. What we would like to show here however, is the global effect it has been creating. If it was only the odd market that had turned down, we wouldn't really think too much of it. You would
(cont.pg.5)

Cover Story

CANADIAN MARKET : DOWN 30% expect that, in random markets, at any EWC (Canada Shares) given time, 50% of the markets would be up and 50% of the markets would be down. What does it suggest then, if all the major markets worldwide are all down from their highs? Not just a few points either, anywhere from 20% to 40% from the last major highs can be found. The graphics from our cover page show twelve major markets, their last major high and how far they have come off them. Shown are: the U.S. markets, London, $SPX China in general, Japan and Australia all down 2025% Canada, Brazil, France, Russia, South Africa and Hong Kong markets all down 3040%. If we consider that the main issue is debt, and that this is the cause of the global melt down currently taking place until we see any real signs of this issue being solved, there is no reason for the markets to reverse. Printing more money, further "Quantitative Easing" and more bailouts are just the opposite direction we need to be $FTSE going in. These things will not improve the situation, rather they will compound it further. Given that this is a fairly obvious observation, you may want to ponder then why these measures are still being used as 'solutions'. Expecting the markets to change and get better without fixing the underlying issue (debt) is unrealistic and a product of our main stream media. For a final reference, look at the last chart included on the next page. It may be familiar to you if you have been following us here at Trigger$. It is showing us the real value of the markets. Although specific to the S&P, all markets will roughly demonstrate the same thing: that the high was actually put in in 2000, and our current demise in the markets started back in the late 90's not just in the last couple of years. (cont.pg.6)
EWC
31%
Mar 2011

Economic & Technical Analysis for the Active Trader

U.S. MARKETS : DOWN 20%

CHART

$SPX
21%
May 2011

LONDON UK: DOWN 25%

CHART

$FTSE
25%
jan 2011

EWZ (Brazil Shares)

BRAZIL : DOWN 37%

CHART

EWZ
37%
April 2011

CHART

CoverStory

$N100

EUROPE / FRANCE : DOWN 30%

Economic & Technical Analysis for the Active Trader

$RTSI

RUSSIA : DOWN 43%

$N100
30%
Mar 2011

$RTSI
43%
Apr 2011

$FZA

SOUTH AFRICA : DOWN 28%

CHART

5 $CNXN

CHINA : DOWN 25%

CHART

$FZA
28%
May 2011

$CNXN
25%
Nov 2010

HONG KONG: DOWN 35%

CHART

JAPAN: DOWN 20%

CHART

$HSI
35%
Nov 2010

EWJ
20%
Feb 2011

CHART

7 2000

CHART

10

The Real (InflationAdjusted) perspective of the S&P to the right (blue line) gives a good idea of what is occurring on a Global Scale. The top for the S&P is clearly shown as coming to fruition in 2000. Charts showing the top of markets as being in 2007 and again just recently, are incorrectly representing the current situation. Hopefully, seeing this along with the other markets world wide gives you a better appreciation of the situation we are all in.
GoldenPhi END

2007

2012 ?

DOWN 40% From 2000

CHART

11

7
Methodology
Economic & Technical Analysis for the Active Trader

TRIGGER$, in collaberation with "Gordon T. Long Market Research & Analytics", have thier own unique approach to TechniFundamental Analysis. The material found in TRIGGER$ is the conclusions of a multiperspective methodology boiled down to its final essence. This methodology includes the following analytical approach: Time Frame short term Duration less than 90 days Approach Technical Analysis Key Tools Elliott Wave Principal, WD Gann, JD Hurst, Bradley Model, Proprietary Mandelbrot Fractal Gen. GlobalMacro Analysis Tipping Ponts Pivots Financial Metrics

intermediate longer term

12 months 18 months +

Risk Analysis Fundamental Analysis

The GlobalMacro Analysis which is so prevalent in our articles and on our Tipping Points site, plays the critical role of bridging our highly analytic Technical Analysis with our detailed Fundamental Analysis. We have found that in the short term the markets are driven by emotion and sentiment. In the longer term, they are driven by financial fundamentals. As Warren Buffett is often quoted as saying: In the short term the market is a slot machine but in the long term it is a weighing machine. We have found that the transition shows a lagging correlation between changes in the Global Macro, followed by Corporate Earnings, then followed by the sell side analyst community estimates. If you are looking for more detail than is provided in TRIGGER$, consider looking at our primary inspiration: "Gordon T. Long Research & Analytics". We do our best to summarize this information and deliver it in an easy to read format. This by its very nature doesn't allow us to include all the very detailed analysis that takes place in order to deliver us its conclusions. All information and conclusions delivered in TRIGGER$ articles are a product of the methodology outlined above.

8
Economic & Technical Analysis for the Active Trader

THE ALL SEEING EYE

On Market & Economic Indicators

NYSE OVERBOUGHT / OVERSOLD OEX OPEN INTEREST (PUT/CALL) MCCLELLAN OSCILLATOR NATIONAL ASSOCIATION OF ACTIVE INVESTMENT MANAGERS

MARGIN LEVELS

NYSE OVERBOUGHT / OVERSOLD

CHART

12

Markets can and often fall the greatest during periods considered as being oversold. The selloff from overbought levels was not unexpected. A bounce from the current oversold levels, likewise should not be unexpected. Look for divergence to occur between falling prices and a higher oversold low. This should indicate a short to intermediate, tradable low is in.

9
Economic & Technical Analysis for the Active Trader

OEX OPEN INTEREST (PUTS/CALLS)

CHART

13

The topping pattern similarities to 2007 was a good warning signal to the recent price decline. There is likely more downside to the pattern, however it will likely find support at the bottom of the rising lower trend channel line (shown above).

10
Economic & Technical Analysis for the Active Trader

MCCLELLAN OSCILLATOR

CHART

14

The McClellan Oscillator has dropped significantly and is now looking for support. Markets can fall further looking for support, however the 21 Day suggests it is near at hand since it seldom reaches this low a level.

11
Economic & Technical Analysis for the Active Trader

MARGIN LEVELS

CHART

15

Margin Debt fell off early 2000 which was a precursor to a major market retrenchment into the fall of 2001. Margin Debt fell off in early fall 2007 which was a precursor to a major market retrenchment into March 2009. We are presently experiencing Margin Debt falling off significantly. This is highly unusual and a strong precursor of "risk off' beginning to creep into the market.

12
Economic & Technical Analysis for the Active Trader

NATIONAL ASSOCIATION OF ACTIVE INVESTMENT MANAGERS (NAAIM)

CHART

16

The National Association of Active Investment Managers (NAAIM) shows that on average they are extremely bearish at 4.18%, having plummeted from last quarter's average of 66.99%. The red line shows the close of the S&P 500 Total Return Index on the survey date. The bars depict a twoweek moving average of the NAAIM managers' responses.

THE NAAIM NUMBER 4.18

Last Quarter Average 66.99%

13

Feature Article
Economic & Technical Analysis for the Active Trader

MISREPRESENTATIONS IN ECONOMIC THEORY

What is hidden in the parable is the 'opportunity costs' of fixing the window. The money the baker spends with the glazier could just as easily have been spent with the tailor or shoemaker. In our first instance of the parable with the broken window, the baker spends his money fixing the window and is no further along. In our second consideration, the window is not broken and the money is spent on another good or service. In both cases we have money being spent in to the economy however in our second example, the baker is further along in his standard of living the window was never broken and he also now has a new pair of shoes. Another real consideration to the parable that may be hidden and Bastiat makes a point of mentioning is: what if the Glazier is in fact hiring thugs to break the window(s) in the first place, increasing the need for his own business? While this may seem to be a very simplistic scenario, the points remain true even as we scale the complexity and size up to our present day global situation. Consider what may be hidden as you listen to the main stream media tell you how it all needs to be fixed. Rarely do they show you all sides of the dice.
GoldenPhi END (Source : Wikipedia)

BROKEN WINDOW FALLACY :

We present the "Broken Window Fallacy" as an opportunity for our readers to gain another perspective. A lot of lending and spending is currently going on: war, bailouts, raising of the debt ceiling. For whatever reason, more debt seems to be the answer to the debt problem. It appears that some believe we can 'spend' our way out of troubles. While there may be some merit to the theories discussing stimulation of the economy, the Broken Window Fallacy adds some food for thought on how it's done. Frdric Bastiat first introduced this theory in 1850. His point was to show why destruction, and the money spent to recover from it, is actually not a netbenefit to society. He includes war, special interest and government spending in his definition of 'destruction'. The parable: A boy breaks the window of a baker. Baker needs to repair the window, and so hires the Glazier. The common thought is that now the Glazier has business and the economy is stimulated. Bastiat declares that he has no argument for this and he agrees that it does stimulate trade. However he also qualifies it: if you come to the conclusion that it is a good idea to break windows, that it stimulates the economy and facilitates exchange, then you are only recognizing that which can be "seen" and not taking in to account that which is "hidden".

14
Economic & Technical Analysis for the Active Trader

TECHNICAL ANALYSIS
CURRENT & FUTURE

NEED TO KNOW

MARKET MOVES: CURRENT & FUTURE MARKET ANALYTICS

MARKET MOVES:

Last month we discussed our thoughts on being in a consolidation pattern, wave 4. As of the charts to the right, we are still in that pattern and are looking for a final wave up a 'C' wave to finish off the consolidation. The overall pattern of this consolidation has been of an expanded flat, where wave 'B' was larger than 'A' and 'C will be larger than 'B'. Wave 'C' up is underway and we are looking towards the 200ma as a potential target. If we take the same slope for wave 'C' as we had for wave 'A', we can see that more time is still required to finish off the final wave of our consolidation pattern. Note the Divergence that foreshadowed our current rise. Both indicators (RSI & MACD) are nearing their 'tops' and will be set to rollover for the final 5th wave down. Both still have just a little more to go. Our second chart to the right shows our current position inside the rounded top formation we have been discussing for some time now. Note that a few Elliott Wave counts can be had we are currently thinking that the end of the 5th wave still to come will be the
(CONT. PAGE 19)

A
EXPANDED FLAT

B
CHART

17

CHART

18

15
Economic & Technical Analysis for the Active Trader

(MARKET MOVES: CURRENT & FUTURE CONT.)

completion of a larger 1st wave. The move up from there, back to the inside of the rounded top, will be a wave 2. From there we head back down for a wave 3. The chart on the right shows us another perspective of the same rounded top formation. From this larger view you can see the Head & Shoulders pattern we have been in since before 2000. After finishing off the larger 12 waves, our 3rd + 5th waves down would expect to take us back to at least the Neckline of the pattern. This shows us dropping past 6000 END on the DOW.

LEFT SHOULDER

HEAD

RIGHT SHOULDER

NECKLINE
CHART

19

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16
Economic & Technical Analysis for the Active Trader

FURTHER PERSPECTIVE ON OUR LOCATION & WHAT'S TO COME

MARKET ANALYTICS

WE ARE HERE:

The market action since March 2009 is a bear market counter rally that has completed the classic ending 5 Wave 33333 diagonal pattern. The Bear Market, which started in 2000, will resume in full force once a broad 'rounded top' formation is completed with cascading weakness across multiple markets presently being clearly evident. The rounded top formation is not yet completed. We are now in the midst of a Global 'rolling top'. We are seeing broad based weakening analytics and cascading warning signals. This behavior is typically seen near major reversals. It is all part of a final topping formation and a long term right shoulder technical construction pattern. I expect the rounded top to be shown to have been centered on the markets June 17th Quadruple Witch. It will take a further 12 months to complete. Rounded Top patterns are extremely difficult to trade as trading reversals are significant and frequent with high volatility. This adds to the confusion about market direction. The market behavior should be viewed as the market forces being in the process of systemically changing balance. It is very typical of major reversals. They are protracted affairs.

CHART

20

17
Economic & Technical Analysis for the Active Trader

THE VAULT
Currencies & Metals

SILVER GOLD U.S. DOLLAR INDEX

SILVER
We have a classic Elliott Wave pattern in Silver. This suggests we are near Wave 4 lows and should soon begin a final wave 5 up towards new highs in Q1 2012.

CHART

21

18
Economic & Technical Analysis for the Active Trader

GOLD
The Fibonacci Count and Extension suggests Gold should soon head towards $2,200/Oz.

CHART

22

19
Economic & Technical Analysis for the Active Trader

U.S. DOLLAR INDEX

The US dollar has staged an impressive rally, no doubt the direct result of the 'flightto safety' trade stemming from the European Sovereign and Banking Crisis. This move is not finished, however it is time for a relief rally as shown by wave #4 below.

CHART

23

The move in the dollar is presently more associated with Euro problems and the slowly unwinding Yen Carry Trade. It is expected that we will see the Euro substantially weaker into Q1 2012 as the crisis in the EU comes to a head and the 'mindless' programs of 'kick the can down the road" are forced to be addressed.

20
Economic & Technical Analysis for the Active Trader

Assessment

RISK

VOLATILITY: VIX RISK SUMMARY

VOLATILITY: VIX

3 YEAR SNAPSHOT

The set up on the VIX is now looking increasingly like a double bottom within a triangle. This often results in an explosive breakout, and is extremely negative for the markets. First Chart: Long Term Second Chart: Shorter Term Detail
CHART

24

DAILY CHART

CHART

25

21
Economic & Technical Analysis for the Active Trader

RISK SUMMARY

AGGREGATED AVERAGE
Our table below takes in to consideration a broad spectrum of RISK factors. Each is then rated from 1 to 10 in terms of its current status from Low RISK to High RISK. An average can then be reached to help determine the overall RISK of the markets. This can be used to help to determine if you should be in or not, or to what degree. Keeping track of the numbers we can see the change in overall trend and what direction we are headed in.

ANYTHING OVER 5 SHOULD BE CONSIDERED SERIOUSLY ELEVATED

(CURRENT CHART PREVIOUS PAGE)

Feature Article
Economic & Technical Analysis for the Active Trader

22

Media Matrix & General Reality

What Do You Know?

It may not be readily apparent what the title of this article has to do with Trading and the Markets. In general, knowledge and information can be very powerful. You make trading and investing decision based on all the available information you have ever come across to date. More recent information may have a greater bearing on your decisions, but information that you have acquired since an infant is also sub consciously factored in to your thinking. It all adds up to give you a perception of the world we live in. While it is a given that the most recent information would influence your current thinking, your current frame of reference is built up from years of 'experience'. This frame of reference filters everything that you see and hear. New information is accepted, rejected or modified based on this reference. This is also known as a personal filter. And we all have one. Your personal filter is based on the beliefs and values you have acquired over the years. What sort of influences would you guess have shaped your own filter? Obviously any education you have had direct 'teaching' from an 'authority figure' usually is successful at imparting information. How about all the books you have ever read? leisure or otherwise. Your parents and their values, beliefs etc. will also be imparted to you to some degree. Where did They get Their ideas? Of course the biggest influence on all of us in

today's society would be the MainStream Media (MSM). It is The Source of all our remaining information and knowledge. The exception to this would be the latest phenomena known as the internet. Online you can find many Alternative Media Sources, various opinions and more information than you could ever hope to digest. Of course, these are only influential and relevant if you are actually looking at them. Taking some time to look at the MSM, it becomes apparent that things are not all what they appear. While we may think of China or Russia when the term Propaganda is mentioned, what about our own 'Main Stream'? Here in the Western Hemisphere we believe that we have a free and independent media that assists in our day to day lives. As an example, it plays an important role in our democratic system and makes us aware of our surroundings from a local to global level. Most do not question the daily stream of information that comes at them from various media sources as they go about their business. Radio, written words, and of course the television provide a constant flow of 'information' that lets us know 'what is what' on a second to second bases all day long. Each of us will have our own preference, or ranking, for the news and media personalities we turn to. As we like to be right and have our own beliefs reenforced we tend to like and trust those media outlets that agree with

(cont. pg. 23)

Feature Article
Economic & Technical Analysis for the Active Trader

23

(Media Matrix & General Reality: What Do You Know? cont.)

what we already think, less of those that don't. This would be one example of your personal filter at work. How closely do you question, or independently confirm, the news and information you are hearing? Most do neither. You would do well by yourself to take the time and read up on Propaganda (ie. Edward Bernays) and research some of the work by others that have questioned and investigated our media. This article is the result of having done so ourselves, and we encourage you to verify everything we have found for yourself. A good read to get you started is Manufacturing Consent: The Political Economy of the Mass Media (1988), by Edward S. Herman and Noam Chomsky. Four examples of major world events are used to make their points. What is most disconcerting about the read is how differently the general understanding of these events are from the reality and truth of the situations. These are but four examples, but they are well researched and documented to show just how spun and contorted the MSM presented them. Read the book to learn what these events are and the truth of the matter. The point is that the reality of the situations were not accurately conveyed. Further to that, they were not just spun, but done so with purposeful intent to guide your perceptions in a certain direction... not just 'bad reporting'. Here is a specific example for you to consider and it demonstrates just how far gone the media really is. Recall the invasion of Iraq. One of the 'pivotal' moments in the invasion

was recorded for history when they toppled the statue of Saddam Hussein. You may recall the scene where dozens of 'greatful Iraqi citizens' with the help of the U.S. Military and a crane, pulled a huge statue of Hussein off the foundation it was sitting on in the middle of a large public square. At the time it received play adnausea for about three days straight. You can find footage of the 'momentous occasion' on you tube to refresh your memory. What you may not know is that the whole event was staged. The people you see on the news that look like a mob of celebrating Iraqi citizens come to topple the statue, are in fact paid actors, from the U.S., via a Public Relations Company, flown in to do a 'media event'. (Source: Control Room, documentary, 2004, Al Jazeera). More recently, Ruben Salvadori in his photo essay Photojournalism Behind the Scenes exposes the common tricks used by media journalists to get the perfect 'money shot'. He shows how many of the images we see are staged and contrived by the media and do not rnecessarily reflect the reality of the situation at all but they look good. On a more relevant level: consider the numbers and information related to the markets you look at. The MSM media presents the information it gets from the government and other sources without question. Usually adding support or justifying and rationalizing the information even more so. Not ever does it outright question or say its incorrect. Yet we know from independent alternative sources (like shadowstats.com) that the numbers presented don't always (ever?) accurately reflect the true nature of the situation. We make mention here of a couple examples to demonstrate what is going on in the media. Full books have been written citing example
(cont. pg. 24)

Feature Article
Economic & Technical Analysis for the Active Trader

24

(Media Matrix & General Reality: What Do You Know? cont.)

after example after example. If you choose to go down this road you fairly quickly come to the realization that pretty much everything represented by the media is not necessarily how they have portrayed it.

completely truthful nor does it accurately reflect the situations it reports of. In some cases its just plain made up. At the beginning of this article we discussed how it is we know anything at all and where our view of the world comes from. The MSM is by far the greatest influence and largest contributing factor to what you know. Given all this, its begs the question, what then do we really Know? How accurate can our Personal Filter be when it has been established via spun and made up information? As a trader, do you not make your living by knowing and understanding information about the world we are living in? Capitalizing on world events and changing dynamics?

Not as it seems.... staged propaganda You can image that a citizen who has been born in to 'the system' in China has a different view of their own country and the world outside of it. There are most likely a few of them who believe that they live in the best county on the planet and its the rest of the world who has it all backwards. Looking out from the inside they may not have a full appreciation of their present situation. What system were You born in to? Are you able to see 'outside' of if for what it is? Do you recognize Your present situation? Doing your due diligence on propaganda and our main stream media should reveal to you the situation you are in. We provided you with a few examples continue on to see what you can discover. Our research and due diligence has led us to the conclusion that most, if not all, 'news and information' that comes out of the MSM is not

Has news or information ever come out that you would expect to move the markets in a certain direction but then they move in the opposite manner than anticipated? Most likely you have blamed the Markets and chocked it up to their 'chaos'. Have you ever considered that maybe the markets were behaving in the correct manner, but that it was the news and information you are receiving that is not correct? We suggest that understanding all this and starting down the road to 'recovery', analyzing your own personal filter, understanding the MSM and Propaganda, is by far the best things that you could ever do for your trading. Having an accurate grasp on reality will improve your trading profits far greater than any methodology or course could ever give you.
GoldenPhi END

Disclaimer
Economic & Technical Analysis for the Active Trader

25

DISCLAIMER
TRIGGER$ publications are for Educational and Entertainment purposes only. This is not an advisory or recommendation to trade, invest or otherwise participate in the financial markets. The Editors, Main Contributors and Publishers of TRIGGER$ are not registered advisors nor do they give investment advice. The comments and analysis given are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity or any other financial instrument at any time. While we believe our statements to be true, they always depend on the reliability of credible sources. Of course, TRIGGER$ recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that you are encouraged to confirm the facts on your own before making important investment commitments. OUR GOAL is to be one of many sources of information, part of your due diligence as you navigate the world markets. We endeavor to offer unique perspectives and insights to be considered that hopefully expand the world around you and add value to your experiences. We believe that information and knowledge, combined with varying perspectives, are the most powerful tools we can ever posses. TRIGGER$ aims at assisting in the forging of these tools. The reader acknowledges that any use of the tools obtained from this publication are done so of their own volition and risk. 2011 TRIGGER$ Media Publications. The information herein was obtained from sources which TRIGGER$ believe is reliable, but we do not guarantee its accuracy. None of the information, advertisements, website links, or any opinions expressed constitutes a solicitation of the purchase or sale of any securities or commodities. Please note that TRIGGER$ contributors may already have invested or may from time to time invest in securities that are recommended or otherwise covered in this publication. TRIGGER$ does not intend to disclose the extent of any current holdings or future transactions with respect to any particular security any of the contributors may or may not be part of. You should consider this possibility before investing in any security based upon statements and information contained in any report, post, comment or suggestions you receive from this or any other information source.

26
Economic & Technical Analysis for the Active Trader

TRADERS MENTOR
Technical Analysis & Trading Strategy Education

TRIGGER$ CHART READING

In this months mentor we will try and teach through example. Using a few current charts, we will go through some of the indicators and methods we here at Trigger$ incorporate in our own analysis. Hopefully this will help you when looking at charts in our publications, as well as give you some things to think about for your own trading. Our chart to the right of the USD Index shows us using a combination of techniques to help assess the location and movements of the market. You'll note several support / resistance lines and channels. A few of these will come from further back in time, not shown in the current window, and a some will be from different time frames altogether. A major trend line from a higher timeframe can have strong resistance.
CHART

TRIGGER$ CHART READING

A moving average helps set the DIVERGENCE boundaries on the p/t movement as well as assist in determining a change in trend. Along with the moving average, the RSI can foreshadow a tend change with Divergence from the main p/t graph. In our example you can see the last major low demonstrating this. Also present is a few possible Elliott Wave counts. These again help us locate our point in the overall (potential) picture as we move forward and try and predict the next moves. EW in itself can tell us a lot information depending on the wave you are in and the wave you are expecting next. When all these start lining up with even more analysis (continued next page) things start to look a little clearer.

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Economic & Technical Analysis for the Active Trader

In our chart of the SPY you can see that although we have no official EW labels, we have identified our last movement as an Expanded Flat 335 pattern. The size of the first AB waves can help us determine where the C wave is going to end up. Added to these clues, we also have a BB envelope that has been giving us a good boundary area that we can CHART 27 expect the p/t to remain inside of. You will also not the presence of a couple moving averages. These are helping both with trend identification as well as setting more boundary and target conditions for the graph. Take note as well as to how the BB and the different MA's interact with each other these can also foretell moves and areas of resistance. We can see the RSI giving us a divergence, but also indicating a resistance, in the RSI, foretelling a potential top reached. The final DOW chart shows our familiar rounded top formation inside of a Gann Circle. Fibonacci retracements can be seen using multiple retracements and extensions can show you likely targets where several cluster together (not shown). EW can again be seen, as well as another BB giving us boundaries. All seem to work well inside of and with the bounding trend lines.... indicating a triangle pattern. From our TA section we also know this is the r.h.s. of a Head & Shoulders pattern. A final consideration is how these three different instruments work together, and what the move of one will mean to the CHART 28 rest. Using several different TA methods, with a few different time frames and combining the information with the results from other market instruments, you can start to see the movements in the markets more and guess less.

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Economic & Technical Analysis for the Active Trader

OPEN FORUMS
Letters to the Editor Readers Comments Discussions

Markets Random or Not? Tell us what you think and why.

Always looking for feedback. Agree or disagree with anything we have printed here? Something you would like to see covered?, analyzed? What would make this better for you as a trader? Let us know.

Contact TRIGGER$ : triggers@GordonTLong.com

We'd like to acknowledge and thank the follow for thier contributions. StockCarts.com charts 111,17, HaysAdvisory.com chart 12,13,14,15 GordonTLong charts 18,19, 20, 21, 22, 23, 26,27,28 Aspen Graphic Reuters charts 24, 25

Economic & Technical Analysis for the Active Trader

www.GordonTLong.com

Gordon T. Long has been publically offering his financial and economic writing since 2010, following a career internationally in technology, senior management & investment finance. He brings a unique perspective to macroeconomic analysis because of his broad background, which is not typically found or available to the public. Mr. Long was a senior group executive with IBM and Motorola for over 20 years. Earlier in his career he was involved in Sales, Marketing & Service of computing and network communications solutions across an extensive array of industries. He subsequently held senior positions, which included: VP & General Manager, Four Phase (Canada) Vice President Operations, Motorola (MISL Canada) Vice President Engineering & Officer, Motorola (Codex USA). After a career with Fortune 500 corporations, he became a senior officer of Cambex, a highly successful high tech startup and public company (Nasdaq: CBEX), where he spearheaded global expansion as Executive VP & General Manager. In 1995, he founded the LCM Groupe in Paris, France to specialize in the rapidly emerging Internet Venture Capital and Private Equity industry. A focus in the technology research field of Chaos Theory and Mandelbrot Generators lead in the early 2000's to the development of advanced Technical Analysis and Market Analytics platforms. The LCM Groupe is a recognized source for the most advanced technical analysis techniques employed in market trading pattern recognition. Mr. Long presently resides in Boston, Massachusetts, continuing the expansion of the LCM Groupe's International Private Equity opportunities in addition to their core financial market trading platforms expertise. GordonTLong.com is a wholly owned operating unit of the LCM Groupe.

Gordon T. Long is a graduate Engineer, University of Waterloo (Canada) in ThermodynamicsFluid Mechanics (Aerodynamics). On graduation from an intensive 5 year specialized Cooperative Engineering program he pursued graduate business studies at the prestigious Ivy Business School, University of Western Ontario (Canada) on a Northern & Central Gas Corporation Scholarship. He was subsequently selected to attend advanced one year training with the IBM Corporation in New York prior to starting his career with IBM.