Direct from the Queen Elizabeth Conference Centre a video featuring a UK Investor Show 2014 presentation by Thierry Laduguie: How to use Sentiment Indicators to forecast the stock market
September 12th - Investors pushed the index lower on Friday and today the decline extended. The real action occurred in after hours on Friday when the S&P broke below a key support level. The FTSE has some catching up to do and the decline could extend further. The FTSE broke beoq its previous low  an indication the correction is not complete. The sell off was triggered by North Korea nuclear test and fear of higher interest rates according to financial websites. The media like to give a reason for the market behaviour, the truth is the sell off was a natural thing caused by profit taking. After a strong rally (wave 3) investors will take profits (wave 4), so the move down is normal. The problem here is to identify the end of wave 4 because we have a wide range where it could end. Basically the more the FTSE goes up during wave 3, the larger wave 4 will be (wider range). The fourth wave tends to end in the area around the 38.2% retracement of wave 3, that level is 6510. I am not saying the FTSE will go to 6510, many fourth waves end above the 38.2% and between the top and the 38.2% retracement. This is where we are now.
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September 1st - The FTSE 100 peaked on 15 August. At the time I warned of a multi-week correction based on my indicators. I showed you the chart of the 34-day BTI last week, this indicator was overbought on 15 August and when overbought there is a high probability the FTSE 100 will decline.
Here is the report FTSE 100 forecast
So once again, the indicator was spot on.
We went short as the decline was underway and we are about to take profits.
There is nothing new in the stock market, history repeats itself. It does not matter if the market is manipulated, we will always profit because the market will follow the same pattern. The only difference is that in a manipulated market the moves up extend. Elliott wave analysis together with e-Yield powerful indicators gives us a great advantage and I urge you to join us.
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When the market is stimulated the moves up will extend and the pullbacks will be short lived. This means if you want to go long you must do so early otherwise there is a good chance you will miss the rally. In this environment it is risky to go short, what is overbought becomes more overbought. If you want to go short, you must delay your trade i.e. wait as long as possible before shorting.
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If you are a short term trader you need good timing to profit from rising and falling prices. I have developed some reliable indicators to help you and these indicators work well in any condition, stimulated or non-stimulated. Using my indicators and applying Elliott wave analysis has helped our members more than double their money in the last 16 months (trading FTSE 100 and options).
Non-stimulated market: Elliott wave
A non-stimulated market is a normal market where central banks have little or no influence on the market. The FTSE 100 will be affected by economic reports, earnings and sentiment. In a non-stimulated market the Elliott wave is the primary tool and the BTI is the secondary tool. The BTI is a sentiment indicator used to assess the direction of the FTSE 100. Basically in this environment the Elliott wave will be accurate enough to forecast the market, I will use the BTI to confirm the Elliott wave. When the two tools point in the same direction the odds of making a profit are high.
Stimulated market: BTI
A stimulated market is one that is boosted by monetary policy. Here the central bank will provide stimulus / quantitative easing, this is what we are currently witnessing in the UK. In such a market I will give more importance to the BTI. In this environment the BTI is the primary tool and Elliott wave is the secondary tool. The strategy here is to follow the direction given by the BTI and trade in that direction, the wave count becomes the secondary tool to support the BTI. For example the BTI turned up on 29 June and has been rising ever since. This suggested the FTSE 100 would rally, the BTI was spot on and this explains why the BTI is the primary tool to forecast the stock market when the market is stimulated.
When the BTI is rising it is not recommended to go short, however the only time we can go short with a rising BTI is when the timing indicators (13-day BTI, 34-day BTI, Top 20 Differential) are overbought. I will discuss these indicators in my next article, basically these indicators identify important turning points. When they are overbought the FTSE will decline. For example right now the 34-day BTI is overbought.
If you have been confused by the recent rally I suggest you subscribe to www.bettertraderpremium.com or www.e-yield.com my research and analysis will greatly improve your performance. And you don't need to interpret my indicators, I will always tell you when it's time to buy or sell.
e-Yield was created in 2000, initially as a personal website where Thierry Laduguie posted his ideas on the stock market. e-Yield became a commercial venture in 2004 with the launch of the first in a series of trading services for day and swing traders.
Thierry Laduguie's unique style of analysis, based on Elliott wave theory and his own indicators, has produced some exceptional results since he launched his first advisory service for private traders in 2006. He was finalist for Best Specialist Research at the Technical Analyst Awards in 2010 and 2011. Thierry is a member of the Society of Technical Analysts and holds the Investment Management Certificate. He started to give trading advice in 2002 with Onewaybet.com where he was responsible for the UK Stock Tips and FTSE Intra-day services, then with Fleet Street Publications where he was the editor of Spread Trader. He has worked with leading hedge funds as an advisor and has written many articles for publications including Money Week and various research websites. Nowadays Thierry develops trading strategies for day/short term traders and manages private clients’ portfolios. He is also a guest speaker at the UK Investor Show and other trading events.
Speciality: Market timing on stock indices (FTSE 100, S&P 500), UK stocks, intraday and short term.