December 30, 2017
Trades & Tutorials
By Geoff Bysshe
After a strong bull run from 2009 to 2017 it's prudent to consider these 2 questions...
#1. What if the market stalls out, and becomes range bound for 20 years?
It’s happened before. Below you’ll find a monthly chart of such a period.
#2. How can you stay with the current trend, without getting caught long at the inevitable market top? Nothing goes up forever.
Range Bound Markets Happen After Big Bull Markets
But They Don't Have To End Trend Trades
From 1963 to 1982 the Dow was range bound between 650 and 1000. This could be viewed as a nightmare for trend followers. However, even range bound markets can provide great swing trading opportunities.
During this "difficult" period, January consistently provided great insight into the market's trend.
More importantly, January gives the savvy trader multiple opportunities to start each year. And the opportunities don't end in January!
If you're not watching the January range with the simple rules I share below you're missing out.
5 Out 5 Tops Identified
In the monthly chart of Dow Jones Index below you'll see that the market topped out 5 times.
In all 5 cases, if you got defensive when the highest red line was broken, you would have avoided getting caught in the down trends.
Read below the chart for more details.
There Are Several Ways To Profit Using January's Range
The green lines on the chart below represent the high of the month of January, and the red lines are the low of the month.
Look at these lines as key inflection points. An inflection point is a level from which the market's trend will reverse if it stops. Or, if the inflection point is broken, the trend will have another significant move.
You’ll see that you could have found big trend trading opportunities in back to back monthly moves.
If you’d traded with a simple bullish bias when the market was above the January high, you would not have missed the uptrends.
And as I stated above, if you turned bearish below the January low...
You would have avoided every major decline.
And it gets better.
Traders familiar with MarketGauge’s Opening Range Reversal strategy should see how it works well here too!
The basic Opening Range Strategy is explained in the first video on this page. (only available for a limited time)
Simply apply the same concept we teach in the A.M. Trader course for day and swing traders to the January range. You'll catch huge moves.
I've Saved The Best For Last
I'm NOT suggesting 2018 will be the beginning of a range bound market!
Personally, I'm going to follow this bull trend until it breaks.
MarketGauge has several ways to determine when, and to what extent, the market may have changed its trend such as...
- Mechanical trading models
- Market Phases
- Proprietary indicators
- And the JANUARY Calendar Range!
Now it the best time to focus on January (obviously).
I've just shown you the basics of one of several ways to use January to alert you to a potential market top.
Warning: The video will only be available until Jan 2nd