HEIKIN-ASHI TRENDS NEWSLETTER

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1 HEIKIN-ASHI TRENDS NEWSLETTER INDEXES EQUITIES FOREX CRYPTOCURRENCIES # EDUCOFIN ALL RIGHTS RESERVED

2 25% DISCOUNT BE YOUR MASTER, A HEIKIN-ASHI MASTER. ORDER BOTH HEIKIN-ASHI TRADING BOOKS TODAY To order: For heikin-ashi charts and know-how check and A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 2

3 The Big Picture (+) SP-500 broke above the resistance of the bearish descending triangle. (+) The general bias remains positive. (+) The long-term charts offer no indication of a trailing-stop violation. (!) The monthly trailing-stops are under attack. Their violations will a serious negative signal. The rest is noise. White (QE), grey, and/or black swans may fly over anytime. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 3

4 Education corner Candle-inside-candle Heikin-Ashi pattern: A Heikin-Ashi candle inside another Heikin- Ashi candle is sign of a trend slowdown. It may be a sign of reversal or a sign of a pause before the trend resumes. A stop-loss is highly recommended. When you listen to talking heads or get stock recommendations, trust, but verify. If Heikin-Ashi charts tell the same story, it s a confirmation and not the final decision. Otherwise, pass. A short talk about haoscillator: A falling oscillator in an uptrend is a sign of a consolidation, not of a trend change. A rising oscillator in a downtrend is a sign of consolidation, not of a trend change. About perfection: There is none, especially in trading. Too much effort time and money - is wasted in search of perfect entries, exits, and stops. They work once, twice, and then they don t. One solution is to avoid trading noise in lower time frames and use a stop-loss and trends (lesser noise) in higher time frames. A short talk about hadelta: There are five (5) possible scenarios when hadelta and its short average are crossing above/below each other. Not all these signals are strong as the following table shows: hadelta average (1) hadelta (2) Crossing 1x2 Signal strength Below zero Below zero Positive Weak positive Below zero Below zero Negative Strong negative Above zero Above zero Positive Strong positive Above zero Above zero Negative Weak negative At/near zero(*) At/near zero(*) Positive Very strong positive At/near zero(*) At/near zero(*) Negative Very strong negative (*) It may also signal a consolidation In an uptrend, pullbacks are accepted as long as the close doesn t go below the previous important low. In a downtrend, reactions are valid as long as the previous important high is not taken. (+++) A good trailing-stop takes most emotions out of a trade or investment. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 4

5 SP-500 Daily S-oscillator A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 5

6 S&P 500 Yearly Heikin-Ashi chart (May 11, 2018) The 2018 Heikin-Ashi high is above the 2017 high made a new high with hadelta. Positive, with a trailing-stop. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 6

7 Another daily market (SP-500) breadth approach, this time based on price rankings. Notice how the market breadth synchronizes with market peaks and troughs. Watch out for +/-300 levels. How can you use market breadth based on price rankings? o Long/Short when the market breadth indicator has a higher/lower value than the previous one o Use a trailing stop o (optional filter) Combine it with the S&P-500 above/below its 200-day average A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 7

8 SP-500 This week: Short-term: positive, a pause. Long-term: important warning: near the trailing-stop. The haoscillator is at an extreme low value and ready to turn higher, suggesting the close will remain above the trailing-stop. Last week: Short-term: positive divergence. The index will go higher. Long-term: important warning: near the trailing-stop. The haoscillator is at an extreme low value and ready to turn higher, suggesting the close will remain above the trailing-stop. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 8

9 GOLD This week: Short-term: weak, near support. Long-term: consolidation with a negative bias. Positive only above the 2016 high. Last week: Short-term: a short reaction is expected. Long-term: consolidation with a negative bias. Positive only above the 2016 high. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 9

10 OIL This week: Short-term: positive, higher highs and higher lows. Follow with a trailing-stop. Long-term: a bullish bias (the close is above the buy-stop). Last week: Short-term: positive, breakout. Long-term: a bullish bias (the close is above the buy-stop). A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 10

11 HEIKIN-ASHI MARKET BREADTH - DAILY %Net < 0 = weakness. %Net > 0 = strength. +/-90% are reversal levels. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 11

12 HEIKIN-ASHI MARKET BREADTH - WEEKLY %Net < 0 = weakness. %Net > 0 = strength. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 12

13 HEIKIN-ASHI MARKET BREADTH MONTHLY %Net < 0 = weakness. %Net > 0 = strength. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 13

14 Table 1: Morningstar sectors + industry groups (31) daily, weekly and monthly heikin-ashi perspectives. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 14

15 Table 2: Select Sector SPDRs (9) - daily, weekly, and monthly heikin-ashi perspectives. Note: The tables in Figures 1 and 2 are based on heikin-ashi change of color indicating a possible change of trend or the start of a consolidation. Other heikin-ashi criteria can be used to generate similar tables. For more information about heikinashi check the daily personal blog and All tables and charts are generated at the end of the week. The monthly view (Monthly HA Trend) is not final until the end of the calendar month. Table 3: FX pairs - daily, weekly, and monthly heikin-ashi perspectives. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 15

16 Figure FX1: EURUSD DAILY The reaction will be short. Last week: two weeks ago: To confirm a bearish move, the March low must be broken. A short reaction from oversold is now expected. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 16

17 Figure FX2: GBPUSD DAILY In the danger zone. Last week: GBPUSD DAILY As with EURUSD, a weak reaction is expected. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 17

18 Figure FX3: AUDUSD DAILY Top here. Last week: Two weeks ago: To trigger another bearish move, the pair must close below March low. A short reaction is expected. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 18

19 Figure FX4: USDJPY DAILY At resistance. Last week: It may go lower. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 19

20 Figure FX5: EURCHF DAILY Consolidation. Last week: Consolidation with a positive bias. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 20

21 (Source: GDAX) Figure FX6: BTCUSD DAILY Positive as long as the blue-dotted support holds. Weak. Last week: Bullish. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 21

22 (Source: GDAX) Figure FX7: ETHUSD DAILY Technically, bullish: higher highs, higher lows since April. Last week: Ready for a pause. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 22

23 (Source: GDAX) Figure FX8: LTCUSD DAILY Negative. It broke the higher highs, higher lows sequence. Last week: Two weeks ago: Safer above 157 (buy-stop). Since April, higher highs, higher lows. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 23

24 Figure 1: QQQ Short-term: positive, higher highs and higher lows since April. Warning: a right shoulder may be forming now (H&S Jan -?). Long-term: still positive. hadelta (haoscillator) shows that the trailing-stop won t be violated soon. Last week: Short-term: positive. Warning: A right shoulder may be forming now (H&S Jan-?). Longterm: still positive. hadelta (haoscillator) shows that the trailing-stop won t be violated soon. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 24

25 Figure 2: IWM (ishares Russell 2000 Index ETF) Short-term: top at resistance. Long-term: positive hadelta indication. Last week: Short-term: higher from here. Long-term: positive hadelta indication. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 25

26 Figure 3: SMH (Market Vectors Semiconductor ETF) Short-term: positive above the downtrend line. Long-term: still weak. Last week: Short-term: a run to the buy-stop resistance. Long-term: still weak. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 26

27 Figure 4: XLF (Financial sector ETF) Short-term: top at resistance. Medium-term: positive. Long-term: follow hadelta. For the moment, a weak positive indication. Last week: Short-term: a small reaction. Medium-term: warning. Long-term: follow hadelta. For the moment, a weak positive indication. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 27

28 Figure 5: DIA (SPDR Dow Jones Ind. Average ETF) Short-term: breakout, positive, near a temporary top. Long-term: hadelta generates a bullish signal. Last week: Short-term: building a bottom. Long-term: the month ended on a positive note, above the trailing-stop. Too close from the reliable trailing-stop. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 28

29 Figure 6: EEM (Emerging Markets ETF) Short-term: minor top here. Still in a downtrend. Long-term: caution. Last week: Short-term: positive divergence late April - present. Long-term: caution. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 29

30 Figure 7: TLT (ishares Barclays 20+ Year Treasury Bond ETF) Short-term: positive above the reddotted resistance. Long-term: at support, weakness. Last week: Short-term: lower (hadelta indication). Negative. Long-term: at support, weakness. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 30

31 Figure 8: IYR (ishares Dow Jones US Real Estate ETF) Short-term: positive. Long-term: a head-andshoulders between 2015 and present. The neckline has been violated at the start of Negative. Last week: Short-term: positive, breakout. Long-term: a head-and-shoulders between 2015 and present. The neckline has been violated at the start of Negative. A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 31

32 Figure 9: IBB (ishares Nasdaq Biotechnology Index Fund ETF) Short-term: a minor top (see haoscillator). Long-term: still below the buy-stop (negative). Last week: Short-term: a short reaction is expected. Long-term: still below the buy-stop (negative). A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 32

33 DISCLAIMER - This newsletter is published only as an educational tool for those who are interested by and want to know more about heikin-ashi noise filtering / trend technique. The information in this newsletter represents author s own opinions and does not recommend any trades or investments and at no time should the reader infer that any such recommendations are given. The content of this free newsletter is an illustration of how various heikin-ashi techniques apply in the field of technical analysis. This information is not to be construed as an offer to sell or the solicitation of an offer to buy any securities. All information presented herein is believed to be reliable, but we cannot guarantee its accuracy. The author(s) may hold positions or other interests in instruments mentioned in this newsletter. Past performance is not a reliable indicator of future returns. All charts are for illustrative purposes only. Reproduction, disclosure, or dissemination of this newsletter is allowed with no alteration of its content and only with a mention of its author(s) and source. - Feel free to forward the newsletter to your colleagues and friends who are looking for a better technique to stay longer with winning trends. If you no longer wish to receive this free weekly heikin-ashi newsletter, please unsubscribe using the link indicated in the original . To subscribe to this heikin-ashi newsletter: - A WEEK LY SUM MA RY FOR H EIKIN- A SHI A FI CIO NADOS F ROM WW W. EDUCOFIN.C OM 33

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