Weekly Report - For the week of January 29, 2018 Page 1

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1 Page 1 Market Overview Advanced GDP figures for the fourth quarter were released on Friday. And, the 2.6% figure reported was down from the previously reported 3.2%. The number reported for the fourth quarter was also lower than some analysts had been expecting. In the week ahead, traders may want to remember that ADP Employment Change figures for January are due on the 31st. QQQ Daily Kicking off this week's analysis with the QQQ daily chart above, we can see that this market started the week on a positive note. Not only did the market continue to higher ground, but it also finished near the highs for the day. On Tuesday, the market made a gap to higher highs on the open. And, not only did it not fill the gap before the close of trading, but it also finished higher and in the upper portion of the day's

2 range. Weekly Report - For the week of January 29, 2018 Page 2 When trading resumed on Wednesday, the market began the trading session with a higher open. And, while the market exceeded the previous days high, it seemed unable to sustain the bullish enthusiasm seen in prior sessions. As a result, the market finished lower on the day. Thursday's trading session began with a higher open. However, the market seemed unable to continue much higher. Instead, the market dipped into the red and gave something of a repeat performance of yesterday's price action. All in all, the market finished lower on the day and in the bottom portion of the day's range. On the final day of trading for the week, the market began the session with a higher open. And, much of the bullish sentiment seen earlier in the week seem to once again reemerge. As a result, the market finished higher and in the upper portion of the day's range. QQQ 15 minute Moving down to the 15 minute time interval for the QQQ, we can see that IntrepidTrader has

3 Page 3 identified the current wave as wave five on this timeframe. Also, we can see that the fifth wave trades to a price area between the yellow and red Fibonacci target boxes for this wave. When a trader begins using Fibonacci ratios in their trading, they may have expectations as to what one can do with Fibonacci ratios and how they can help in one s trading. After all, they have a wide range of uses, and there are various methods of using them in one s trading. Well, it helps to remember that Fibonacci ratios are usually predicated on some other observation being made. In other words, they are usually based on price swings or other chart elements. With this in mind, a trader can easily see that Fibonacci ratios help measure a relative bound of normalcy between what is being measured and the thing being observed. For example, a price swing which is being measured can have the Fibonacci ratios applied and find how far the market can move and remain symmetrical to this price swing. And, it also helps if there are some price swings where the Fibonacci ratios cluster together. And, when they do, some traders place a higher degree of importance around these price areas. Traders who are comfortable with this type of analysis involving Fibonacci ratios may also look to other areas to incorporate them into their trading methodology. For example, some traders who use options in their trading may also apply Fibonacci ratios to the time element that is used to compose a price chart. Other traders may apply the ratios to a particular indicator. Fibonacci ratios have a wide and varied application in trading. And, it also helps to remember that they are predicated on finding a degree of relevance based on another element in the price chart. In the week ahead, traders may want to watch the 15 minute time interval for the QQQ. If this market continues to advance, the current objective for the major fifth wave shown in the chart above would be the red Fibonacci target box for wave five. However, should this market decide to sustain a correction greater than the major fourth wave (shown in red) within this bullish five wave sequence, this could be an early indication that the wave count shown in the chart above could be over.

4 Page 4 SPY Daily Continuing onto the SPY daily chart above, we can see this market began the week slightly lower. However, bulls took control of the markets and push prices higher. As a result, the market finished higher end near the highs for the day. When trading resumed on Tuesday, the market seemed to continue the bullish tone established the prior day. Not only did the market continued to new highs, but it also finished in the upper portion of the day's range. Wednesday's trading session began with a higher open. And, while the market continued to new highs during the session, it seemed unable to sustain a move to these price levels. As a result, the market finished lower and around the middle of the day's range. On Thursday, the market began the session with a higher open. However, the market seemed reluctant to challenge the previous days high. All in all, the market finished lower on the day. Friday's session began with a higher open. And, even though the market made a brief dip into the

5 Page 5 red during the session, it recovered and continued to new highs. As a result, the market finished near the highs for the day. SPY 15 minute Drilling down to the 15 minute time interval for the SPY, we can see that IntrepidTrader has identified the current wave as wave five on this timeframe. Also, we can see that the fifth wave trades to a price level just below the red Fibonacci target box for this wave. When some traders begin trading, they may find a lot of charting programs which incorporate various indicators. And, some of these indicators are somewhat common such as stochastics and others may not be as common. However, it's useful to remember that most all indicators are based on some element of the price found on a price chart. And, for this reason, a trader may find themselves not using them as often as they become more adept at reading a chart. So, a trader who can easily see increases in momentum may not use a momentum indicator as often. Or if he does use a momentum indicator, it may be used to confirm his observations on a chart.

6 Page 6 If a trader does use indicators in his trading, it s also helpful to know what the indicator is intended to measure and how it is calculated. So, two indicators which are predicated on moving averages may rarely disagree. And, this would be in contrast to an indicator and an oscillator which could be very different regarding the calculation and thus application. In this case, the use of a moving average and an oscillator may help the trader diversify his analysis rather than have two indicators which are derived from similar calculations. In the week ahead, traders may want to watch the 15 minute time interval for the SPY. If this market continues to advance, the current objective for the major fifth wave shown in the chart above would be the red Fibonacci target box for wave five. However, should this market decide to sustain a correction greater than the major fourth wave (shown in red) within this bullish five wave sequence, this could be an early indication that the wave count shown in the chart above could be over. Good Trading! Sam Perdue