Special Issue- Searching for Trends: How and why?

A conceptual report on trending markets and the commensurate benefits of technical analysis. Comments, discussions, and even alternative/negative comments will be appreciated.
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Trending Markets

SEARCHING FOR EXCEPTIONAL RETURNS – THE CASE FOR TECHNICAL ANALYSIS

SUMMARY:

This report highlights examples of alternative trending markets. The intention is to create a general awareness that there are at any stage many strong global market trends, other than those in main stream markets that can be identified via objective technical analysis. This is a review to convey the principle and not analysis report.

CONCEPT:

Profits are strongly correlated to major trends. It should thus be possible to enhance returns by enlarging the universe of potential markets, but only engage where low risk, large potential moves are likely. Linking a series of markets to synthetically can create a continuous trend is a very successful general strategy.

LIMITATIONS:

Most market participants are unfortunately limited to specific markets via mandate parameters (portfolio managers and most hedge funds), or by employment parameters (bank, broking and fund traders). There is also a common narrative that in order to capitalize on potential market moves, an in depth fundamental knowledge and experience is required of the underlying market. .

SOLUTION:

Technical analysis, as a predictive technique, do not require fundamental inputs and can analyze any tradable trending markets with some degree of accuracy. The use of charting as a trend searching and valuation study can add immense value. Risk can also be limited by quantifying market levels where a trend is negated, confirmed or reversed. If you don’t agree with this argument… then stop reading and do something productive!

CONTENT:

Recent exceptional trends, during low trending conditions in most equity, currency and bond markets, are illustrated and reviewed as how objective technical analysis could have identified the trend examples These trends are comparable to the well known Nividia and Cryp-tocurrency moves. There are many other markets that have also experience strong trending characteristics.

• US Cocoa Futures
• US Orange Juice Futures
• US Feeder Cattle Futures

COCOA FUTURES

BULL TREND OUT OF LARGE PQ CONSOLIDATION

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Level: 5560
This report is for informational purposes only. Click to see the full disclaimer below.

ORANGE JUICE FUTURES

BULL TREND OUT OF TREND ENDING PQ FORMATION

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Level: 378
This report is for informational purposes only. Click to see the full disclaimer below.

FEEDER CATTLE FUTURES

BULL TREND OUT OF TREND ENDING PATTERN

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Level: 247
This report is for informational purposes only. Click to see the full disclaimer below.

This report is for informational purposes only, does not constitute an offer, or solicitation to trade and should not be construed as a recommendation, or advice, to enter into, or to refrain from entering into, any transaction.

Whilst the information herein contained is believed to be reliable, no responsibility is assumed by Hite Investments and Consulting, (Pty) Ltd., their employees, associates, external contributors, or any of the references used, for any errors, or omissions, or for losses of any nature which may arise from any opinion expressed herein.

You are cautioned that information is not necessarily complete and that opinions of individuals employed at the above may differ, or be based on contrary analysis techniques andthat opinions may change over time.

The losses in trading and investing can be substantial and you should not engage in such trading and investing unlessyou fully understand all the potential risks.

The views expressed in this report may change over time and updated reports will not necessarily be issued should this occur.

Red Line: “Roadmap” – A visual representation of proba-ble future price action. A perforated red line suggest various proba-ble outcomes with the perforated line being

Blue Line: Trend Lines that constitute important sup-port / resistance or break levels

TA – Target area
MA – Moving average
R – Resistance
RA – Resistance area
MR – Minor Resistance
MS – Minor Support
MTR – Medium Term Resistance
MTS – Medium Term Support
SA – Support Area
S – Support
T – Target
* or ** – Significance of level

The intention of this analysis is to give the reader a visual picture of the most probable price path that could develop over time. This is enhanced by adding crucial levels where the proposed view becomes dubious and needs to be re-assessed (or confirmed). The benefit of this approach is that of an easy to understand and almost instantaneous grasp of the analysts view. This kind of analysis is not intended to be exact in predicting levels, and especially timing of moves, but to give a more general probability view that is easily understandable and unambiguous. The proposed “roadmap” gets adjusted over time as new price information becomes available. All technical views have re-assessment or negation levels where the proposed preference is no longer valid or needs to be re-assessed.