Hullmovingaverage
S&P 500: Low lag indicators are starting to show bearish signalsAre we headed for a stock market crash in 2018? At least in the near-term (next days to weeks) there are growing risks to the downside as the potential for a sharp pullback is gaining power as I'm showing here. On this chart I'm using two different indicators, which both have as one of their main features that they exhibit a very low lag.
Moving averages make it easier to analyze price movements, but the price smoothing creates lag. One approach which is trying to solve this issue is the HMA - Hull Moving Average . The idea was developed by Alan Hull and he reduces lag by using the square root of a given period instead of the actual period itself. And he also uses weighted moving averages, which are more similar to but a little faster than exponential moving averages.
On the chart the recent daily close price is below the 18 period Hull Moving Average, which is bearish and if the market would decline very soon, the HMA would start to slope downwards, which would be the second bearish signal given by this indicator.
The second indicator on the chart is a oscillator. I'm using the Fisher Transform which was developed by John Ehlers . The Fisher Transform converts data to have nearly a Normal Probability Distribution. The Fisher Transform changes the probability density function (PDF) of any waveform so that the transformed output has an approximately Gaussian PDF. If the prices are normalized using Fisher Transform , extreme price movements are relatively rare events. This means turning points can be much easier identified.
On the chart the 9 period Fisher Transform has started to slope downwards, which is bearish . The second bearish signal given by this indicator would be if the Fisher Transform would cross below its zero line. Which is not the case as of today.
Conclusion: Both of these low lag indicators have started to show early bearish signals (Hull MA above price, Fisher sloping downwards) with both indicators having signal-wise more downside potential left, because both aren't fully bearish yet (Hull MA slope not yet declining, Fisher Transform not yet below its zero line).
Short entry: 2730
Target: 2675
Stop loss: 2745
Risk: 15 points, Reward: 55 points
Risk/Reward Ratio: 3.6666666667
P.S. Here you can learn more how these two indicators work:
- Hull Moving Average
alanhull.com
- Fisher Transform
www.mesasoftware.com
BTC USD short until AprilishOn the chart, we have weekly-BTCUSD with the following indicators:
- BB: Bollinger Bands (which is basically 20 units moving averages +- the standard deviations of the same timeframe)
- HMA: Hull Moving Averages, which is basically a (simple, but clever), smoothed moving average
- K: Klinger simple (again quasi-centered) volume-based oscillator
- CCI: Commodity Channel Index is similar to BB (calculated based on moving average and standard deviation), but quasi-arbitrary-normalized into an oscillator).
Brief explanations to the indicators presented:
- BB helps to define an area where price will likely "pulse"
- Klinger helps to detect trend-changes (based on volume)
- CCI helps to detect a trend-change
- HMA helps to define the angle of the trend
Based on these values (high CCI mainly) and 2-dimensional areas and extended lines, I think, unless dramatical volume-change happens, trend remains bearish until CCI/BB reaches again low. So I expect a trend change on early April (maybe mid), and that is when I will consider opening an entry-position. BTC is 11k now, I think it might fall until 7k by early-April.
This is NOT a trading advise, just a biased idea of a non-pro. Calculate risk, use stops, avoid FOMO and have fun!
Tech-criticism welcome!
(4 Csa-Ga-Pe)
BTC under 3k in 2018BTC Short
Here we have 1d BTC:
- blue dashed line is simple linear regression (days/close price).
- rainbow-line is Hull Moving Average 100 days.
- green-red-line is simple moving average 400 days.
- grey line is 800 days moving average,
- middle green doted line (between the previous two) is weekly MA20-STDEV20 (see Bollinger Bands)
- and than standard Coppock and simple SMI Ergodic Indicator.
Looking at how events unfold at 2014, I think the downtrend is here to stay:
- probably on the long run (meaning 2018), we might see BTC under MA800day, which means BTC under 3k in 2018.
- as for mid-term (March-April-May) BTC might bounce back at ~6.5k and/or at ~5k.
This is NOT a trading advise, just my biased ideas. (My advise would be: use stop-sell, always calculate risk and try to avoid FOMO.)
Criticism welcome!
BTC short to 6.5k and/or 5k?Here we have 1d BTC:
- blue dashed line is simple linear regression (days/close price).
- rainbow-line is Hull Moving Average 100 days.
- green-red-line is simple Moving Average 400 days.
- grey line is Moving Average 800days,
- middle green doted line (between the previous two) is WEEKLY MA20-STDEV20 (see Bollinger Bands)
- and than standard Coppock and simple SMI Ergodic Indicator.
Looking at how events unfold at 2014 , I think the downtrend is here to stay:
- probably on the long run (meaning 2018), we might see BTC under MA800day, which means BTC might be under 3k in 2018.
- as for mid-term (March-April-May) BTC might bounce back at ~6.5k and/or at ~5k.
This is NOT a trading advise, just my biased ideas...use stop-sell, always calculate risk and try to avoid FOMO.
Criticism welcome!