Get Ready Bulls: Here Comes The Magict

August 8th, 2007

No MagicT has nothing to do with mushrooms, it's short for "Magic Trough".

The unique TrendSensor Trading System I have developed is comprised of about seventeen modules, including seven particularly powerful indicators or chart patterns. MagicT combines price pattern and a responsive indicator to reliably deliver buy signals early in the new, strong rally that normally follows a precipitous decline fueled by panic and fear.

If you're into the geeky stuff, MagicT combines time series analysis of price volatility, a statistical analysis of trend duration to identify excessively long trends, and a simple chart pattern to confirm the start of the strong bounce.

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.

I chose to show the DAX because it's primed to trigger a MagicT signal again soon, and it has more historical signals than most markets - 16 in 14 years. Many markets only serve up a MagicT buy signal once every two or three years. So the fact that right now I can identify 14 global stock markets or sectors that are primed to trigger a MagicT buy signal is remarkable and bullish. A few of these may not fulfill all the signal requirements within the time frame allowed, but there are 10 markets that appear very likely to throw MagicT buy signals within the next week or three. These 10 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).

Yes, the last really attractive buying opportunity for a long time is about to unfold in the US markets. I'm a bit peeved that my systems didn't throw a short signal leading into the recent decline - but after this next push higher they may get a second chance.

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.