Get Ready Bulls: Here Comes The MagicT

August 8th, 2007

A cuppa MagicT anyone? No, it's nothing to do with tea (or mushrooms!) It's short for "Magic Trough".

There are seventeen market models within my unique TrendSensor Trading System, and MagicT is one of the elite group of seven models I place highest weighting on. It has an uncanny knack of serving up buy signals very early in the strong bounce that usually follows powerful sell-offs that are fueled by fear and panic. In fact, it was designed to identify this exact type of opportunity.

In case you're interested in the technical stuff, MagicT combines times series analysis of volatility with a statistical measure of an overly prolonged trend, and simple chart patterns to confirm the reversal back up.

The chart at the link below of the DAX Index (Germany) covers 14 years and shows the MagicT in action (all those buy signals in all those troughs):

www.trendsensor.com/Charts/DAX-LT-MagicT.png

As you can see, most of the significant lows are nailed by MagicT, and the only signal that's clearly not timely is the first one in 2002.

Unlike the Germany market, many market indexes throw a MagicT buy signal only once every two or three years. Yet right now I can identify 14 market indexes (all within USA and Europe) that are primed to trigger a MagicT buy signal. That's phenomenal! And very bullish. A few of these may not fulfill all the signal requirements within the time frame allowed, but there are ten markets that appear very likely to throw MagicT buy signals within the next week or three. These ten markets are evenly split between Europe and USA:

* Europe: ATX (Austria), BFX (Belgium), CAC40 (France), DAX (Germany) and FTSE100 (UK).

* USA: BIX (S&P Banking Sector Index), HGX (Philadelphia Housing Sector Index), NYA (NY Composite), SPX (S&P 500) and SXX (Philadelphia Semiconductor Sector).

When MagicT rides into town within the next few days, it probably signals the start of the last excellent buying opportunity within the US and European markets for a long time to come.

But right now, I know I'm going to get a few buy signals in the not-too-distant future, so this is a heads-up for my trading signal clients - and an invitation to catch those signals via my free 5 week trial offer for others reading this.

By: Murray Nickel

Murray Nickel is a mathematician, statistician, and professional trend trader. He offers a free trial of trading signals for market indices and index ETFs, spot Forex, and spot Gold. He also mentors trend traders aiming to excel at trading global markets.
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