HEIKIN-ASHI NEWSLETTER A WEEKLY SUMMARY FOR HEIKIN-ASHI AFICIONADOS Issue 96 January 12, 2014 Site: www.educofin.com Blog: http://heikinashi.wordpress.com Heikin-Ashi Book: http://www.educofin.com/heikinashi-book.htm
Dear traders, Thank you for all feedback. I do hope that the content of the newsletter is of great value to understand what heikin-ashi is, how it works, and why more and more traders use it. Since my original article in Technical Analysis for Stocks and Commodities published in February 2004, this visual trend filtering technique has really taken off. Thousands of traders and investors use it in various markets and time frames. Many trading platforms and technical analysis software packages have implemented heikin-ashi. The recently-published book and first of its kind, Heikin-Ashi: How to Trade without Japanese Candlestick Patterns outlines three important features of this technique, the last two unknown until the publication of the book: 1. Heikin-ashi as a visual instrument 2. Quantifiable heikin-ashi indicator(s) 3. Replacement (or confirmation) of many of the 100+ subjective Japanese candlestick patterns The book includes now a free CD-link that makes the transition to heikin-ashi trading faster and smoother. To order your copy today, please use this link: http://www.educofin.com/heikinashi-book.htm 2012-2014 Dan Valcu, CFTe P a g e 2
Thoughts for next week Markets remain bullish. A good trailing-stop keeps the capital in good shape. Follow Facebook (FB). Potential. White/Gray/Black Swans may fly over at any time. 2012-2014 Dan Valcu, CFTe P a g e 3
S&P-500 (heikin-ashi multiple time frames) Still bullish. Tired on the daily chart (doji-like heikin-ashi candles = weakness). 2012-2014 Dan Valcu, CFTe P a g e 4
US Dollar Index (heikin-ashi multiple time frames) Bullish medium- and long-term (weekly and monthly charts). 2012-2014 Dan Valcu, CFTe P a g e 5
Tesla (heikin-ashi multiple time frames) More short-term downside pressure (red arrow). 2012-2014 Dan Valcu, CFTe P a g e 6
EWP - ishares MSCI Spain ETF (heikin-ashi multiple time frames) A good play (Spain) if you believe that something positive will happen in Europe. The blue arrow points (again) to a bullish crossing at zero followed by a strong uptrend. 2012-2014 Dan Valcu, CFTe P a g e 7
Facebook (heikin-ashi multiple time frames) Consolidation; in the process of developing the handle (yellow) of a cup (blue). Best long entry: Above the consolidation high (if the price remains above the low of this consolidation). A good long entry: When the heikin-ashi oscillator will cross above its short average (lower pane). If both events will coincide, the breakout may be very strong. Stop-Loss? Below the consolidation low. 2012-2014 Dan Valcu, CFTe P a g e 8
Heikin-Ashi market breadth (daily) %HAup > 50 = strength. Internal market weakness since mid-december. 2012-2014 Dan Valcu, CFTe P a g e 9
Heikin-Ashi market breadth (weekly) %HAup > 50 = strength. Weak. 2012-2014 Dan Valcu, CFTe P a g e 10
Figure 1: Morningstar sectors + industry groups (31) - daily, weekly, and monthly heikin-ashi perspectives. 2012-2014 Dan Valcu, CFTe P a g e 11
Figure 2: Select Sector SPDRs (9) - daily, weekly, and monthly heikin-ashi perspectives. 1. 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 heikin-ashi check the daily personal blog http://heikinashi.wordpress.com and http://www.educofin.com. 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. Figure 2a: FX pairs - daily, weekly, and monthly heikin-ashi perspectives. 2012-2014 Dan Valcu, CFTe P a g e 12
Figure 3: EURUSD daily The oscillator points to more upside. 2012-2014 Dan Valcu, CFTe P a g e 13
Figure 4: GBPUSD daily Tired. The oscillator may signal a top soon. 2012-2014 Dan Valcu, CFTe P a g e 14
Figure 5: AUDUSD daily Very bearish (far below the Ichimoku cloud). Forming a base for later advance. 2012-2014 Dan Valcu, CFTe P a g e 15
Figure 5: USDCAD daily Time to digest the gains/consolidate (the oscillator at a top). 2012-2014 Dan Valcu, CFTe P a g e 16
Figure 7: SPY Bullish. Though the price shows a bullish pattern for further advance, the heikin-ashi oscillator remains below 50 and may peak very soon (yellow arrow). When in doubt stay out. 2012-2014 Dan Valcu, CFTe P a g e 17
Figure 8: QQQ Bullish. See SPY above. 2012-2014 Dan Valcu, CFTe P a g e 18
Figure 9: IWM (ishares Russell 2000 Index ETF) Bullish. 2012-2014 Dan Valcu, CFTe P a g e 19
Figure 10: SMH (Market Vectors Semiconductor ETF) Bullish. 2012-2014 Dan Valcu, CFTe P a g e 20
Figure 11: XLF Bullish with a negative divergence (red arrows). 2012-2014 Dan Valcu, CFTe P a g e 21
Figure 12: DIA Bullish. Positive bias (heikin-ashi oscillator). 2012-2014 Dan Valcu, CFTe P a g e 22
Figure 13: USO (United States Oil ETF) Very bearish. 2012-2014 Dan Valcu, CFTe P a g e 23
Figure 14: GLD Bearish (below the Ichimoku cloud) with positive bias (yellow area). 2012-2014 Dan Valcu, CFTe P a g e 24
Figure 15: UUP (US Dollar ETF) Uncertainty due to the very thin horizontal cloud. False signals expected. 2012-2014 Dan Valcu, CFTe P a g e 25
Figure 16: EEM (Emerging Markets ETF) Very bearish (deep below the Ichimoku cloud). 2012-2014 Dan Valcu, CFTe P a g e 26
Figure 17: TLT (ishares Barclays 20+ Year Treasury Bond ETF) A close above the cloud would mark a change of character from bearish to bullish. 2012-2014 Dan Valcu, CFTe P a g e 27
Figure 18: IYR (ishares Dow Jones US Real Estate ETF) See TLT. 2012-2014 Dan Valcu, CFTe P a g e 28
Figure 19: FTSE-100 Ready to advance from here (yellow circle). 2012-2014 Dan Valcu, CFTe P a g e 29
Figure 20: DAX The oscillator points to continued consolidation/pullback. 2012-2014 Dan Valcu, CFTe P a g e 30
Figure 21: Australia All Ordinaries See FTSE-100 above. 2012-2014 Dan Valcu, CFTe P a g e 31
Disclaimer: This newsletter is published only as an educational instrument for those who are interested by and want to know more about heikin-ashi technique. The information in this newsletter represents authors' 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 securities 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. If you no longer wish to receive this free weekly heikin-ashi newsletter please unsubscribe by following the link indicated in the original e-mail. To subscribe to this free weekly heikin-ashi newsletter: http://educofin.com/newsletter.htm 2012-2014 Dan Valcu, CFTe P a g e 32