Overcoming Market Volatility and Consumer Confidence with VantagePoint Software

March 26th, 2015 by VantagePoint Software

With the recent fall of consumer confidence it is increasingly important that traders have a consistently reliable and accurate trading strategy that can keep their head in the game and their emotions checked at the door.

Taking a look at the VIX ($VXX) we can see that VantagePoint Software accurately forecasted the volatility. The confidence lost when the market becomes volatile can easily be restored with VantagePoint’s advanced notice of trend changes. In our latest video we take a look the Dow ($DJIA), Bebe ($BEBE) and Kohl’s ($KSS) to examine how traders could have used this information to pick up on profitable trading opportunities in order to make smarter trading decisions.

Overcoming Volatility

The DOW ($DJIA) suffered a pretty hard blow yesterday, falling 298 points and continued on that decline throughout today. The average trading, without the right intelligence and tools in their arsenal probably would have lost money with that sharp moves after many days on the rise. VantagePoint traders were aware of this trend 2 days ago and were able to position themselves accordingly.

Dow1

Short Term Trends in Market Forecasting

Despite the decrease in consumer confidence, we were still able to find some positive momentum in fashion retailer Bebe ($BEBE) which has increased 8% over the last 4 days. Following the indicators in VantagePoint, in just 3 moves you could have made a 58% profit. It really is as simple as trusting in the global market analysis that takes place behind the scenes.

BEBE - Market Forecast in VantagePoint Software

Long Term Trends in Market Forecasting

Maybe you’re the kind of trader who prefers to buy and hold positions for a longer time period. VantagePoint predicted Kohl’s ($KSS) to go up back in January and this stock is still on the rise. Trusting the predictive indicators in VantagePoint would have put 25% back in your pocket in just one trade!

Long Term Trend Stock Forecast in VantagePoint

Volatility affects every market and every trader. A lack of confidence is the primary reason over 90% of traders are unsuccessful or breaking even. VantagePoint customers have accurate information that allows them to anticipate moves in the market and take trades with confidence.

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Using Intermarket Analysis to Day Trade the E-Mini S&P 500

March 24th, 2015 by VantagePoint Software

Trading stock index futures, such as the E-mini S&P 500, can be a wild ride. But as the most actively traded, liquid futures contract and the most widely followed market, it’s hard not to want to be involved in the market. But how does the retail trader keep pace and spot trends?

S&P

First, they must have a technical analysis tool that can analyze both past market data on the index itself and intermarket data from various related markets. These related markets might include the Dow Jones Industrial Average, 30-year Treasury bonds, Nasdaq 100, U.S. Dollar Index, the Swiss Franc, the Euro, New York Stock Exchange Composite Index, Dow Jones Utility Average, gold, and crude oil, to name a few.

This data is processed by neural networks to create a leading indicator for the E-mini S&P 500, instead of a lagging indicator.

In this paradigm, a moving average is forecasted for a future date, then compared to today’s actual moving average which is calculated solely on past single-market prices. This approach is similar to a traditional moving average crossover strategy which compares calculated moving averages to one another. The distinction in this paradigm, which transforms this strategy from a lagging into a leading indicator, is that one of the moving averages is a forecast for a future date based substantially on intermarket data, not just calculated on recent single-market data.

Applying Intermarket Analysis to your Trading Strategy

So how can this help you trade a volatile market like the E-mini S&P? In January of 2015 the E-mini had three separate five day trends – closing down five days in a row for two stretches, and also closing higher five days in a row.

Trading software like VantagePoint could have potentially given you a two day jump on the market. For the up trending moves, if the forecasted moving average for the future date is greater than today’s actual moving average, the market is expected to move higher over that time frame. Potentially, you could have gotten in the market two days ahead of other trend followers.

Watch this video below to see how VantagePoint predicted trend moves in the E-mini S&P for February 2015 and helped traders profit over $4200 per contract in just 15 trading days. Read that full blog here.

Similarly, when the forecasted moving average is less than today’s actual moving average, the market is expected to move lower. The difference between the two moving averages from one day to the next (as they are updated each day) indicates the relative strength of the expected move over that time frame.

By utilizing leading indicators for trading the E-mini S&P 500, such as VantagePoint’s proprietary moving average crossover strategy, based on both single-market and intermarket data from globally related markets, early indications of imminent changes in trend direction can become apparent before they show up on traditional daily price charts or can be identified by popular single-market trend following indicators.

You may also like: Predictive Trend Moves in the S&P 500

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Global Market Analysis for S&P 500, Dow and Light Sweet Crude Oil

March 19th, 2015 by VantagePoint Software

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Traders understand that markets are interconnected from a global standpoint and that trading decisions must not be based solely on one target market but on all those affecting it.

VantagePoint software conducts global market analysis on markets around the world which produces trend forecasts that are up to 86% accurate. By utilizing these forecasts, traders have the knowledge, confidence and confirmation to make smart investments.

Watch the video below to see recent activity in the S&P 500 as well as the Dow. More importantly, we’ll show you what VantagePoint forecasted 2 days ahead of these trends that helped our customers get in at the right time and cash in on major profits.

Curious about Light Sweet Crude Oil? We answer the markets hottest question – how low will it go? See what our intermarket analysis software is forecasted for the days ahead.

You May Like: Using Intermarket Analysis to Day Trade the E-Mini S&P 500

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Gold Trading – How to Invest Wisely

March 16th, 2015 by VantagePoint Software

Last week we showed you a video that demonstrated how accurately VantagePoint’s market forecasts predicted trend changes in Gold. If you missed that video Go Here to watch it now.

Gold bars

The price of gold is ubiquitous in today’s markets, affecting many different sectors. Traditionally, investors may buy gold to protect their wealth against losses in other markets on the belief that the precious metal will hold its value better than stocks or cash. This hasn’t always held true.

If you’re a gold trader you know it’s ever present role in many markets and economies has made gold a standard in market trend reporting from the media and financial press. Unlike physical commodities whose prices tend to revolve around supply and demand, gold can almost be considered its own financial market in the sense that it responds to emotion such as fear.

What affects the price of gold?

Many gold traders see this metal as a safety blanket, especially in times of crisis. War, natural disaster or a stock market crash can all cause a buying frenzy in gold as traders view this commodity as more valuable than paper.

Gold also has an inverse relationship with the US dollar so as the value of the US dollar declines, we should expect to see a rise in the price of gold.

Trading Gold Using Intermarket Analysis.

Gold has rebounded in early 2015 starting the year off strong. Watch this video to see how VantagePoint accurately predicted trend moves for gold.

However, the uncertainty of the Federal Reserve may mute gold’s rise. The U.S. central bank is widely expected to raise interest rates in the second half of this year, a policy shift that is expected to push gold prices lower. Gold doesn’t pay interest or dividends and finds it difficult to compete with Treasury bonds and other interest-bearing assets when rates are rising.

The US dollar will also come into play. When the greenback eases, dollar-denominated gold becomes less expensive to investors who use other currencies.

There should be a number of trading opportunities in gold futures and gold ETFs but these markets will be extreme; volatile.

This requires state of the art market forecasting tools.

GLD

VantagePoint Software helps traders understand the impact and influences that related markets have on one another. By understanding these complex relationships, our customers have a bird’s eye view of market behavior days ahead of the trends, which increases their confidence in each position and allows them to become more profitable. VantagePoint is by far the most sophisticated intermarket analysis in the industry. It uses a neural network process to identify which markets have the most influence on a target market, then produces a set of intermarket data to generate predictive indicators for short-term price trend forecasts for the new market realities.

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Trading Gold with VantagePoint Software

March 11th, 2015 by VantagePoint Software

Trading Gold with VantagePoint

St. Patrick’s Day is just around the corner in the U.S. so we’d like to help you find your pot of gold. In our latest video we take a look at how you can use intermarket analysis and predictive indicators to accurately trade gold with high profitability.

We also analyze the inverse relationship between gold and the USD. Whether you are trading ETF’s or commodities you could be making more money than you are right now. Watch the video below to see how VantagePoint can change your life today.

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Trading Strategy – A Guide to Market Correlations

March 10th, 2015 by VantagePoint Software

trading strategy

Financial markets rarely trade completely in a vacuum. What happens in one market frequently spills over and may drive other markets’ movements. For traders using predictive market software like VantagePoint, the intermarket relationships are analyzed, evaluated and weighted to forecast price trends.

Still, it’s important to understand the theory behind intermarket relationships as they apply to complex market conditions. Because what you may have learned in your college economics course may not apply to trading today’s correlated markets.

Correlation Basics

Without getting into a major statistics lesson, a brief look at the basics of correlations is a good idea. First, a coefficient of correlation is a number between +1 and -1 and represents the degree of statistical interconnection between two assets. A correlation of +1 indicates a perfectly positive correlation and means that two assets’ prices move in perfect tandem. A correlation of -1 expresses a perfectly negative correlation and shows that the two assets’ prices move perfectly inversely to each other. A correlation of zero means the two assets’ price moves are statistically uncorrelated, meaning the price movements in one asset have no statistical meaning for the other asset’s price direction. Correlations between +0.3 and -0.3 are typically viewed as weakly and unreliably correlated; coefficients of +/- 0.5 are considered significant, while coefficients of +/- 0.7 are considered quite strong, statistically speaking.

Correlations are calculated based on a number of observations or periods, such as weekly, daily or hourly closing prices. As such, one of the most important elements to keep in mind when interpreting the significance of any correlation is the number of observations used in the calculation. A correlation calculated using only 20 or 30 periods is likely to be of minimal reliability, but coefficients relying on 100 or more observations typically have a high level of statistical significance and reliability.

Why Do Correlations Exist?

The longer answer is that correlations exist as a function of time and, most important, a series of fundamental economic relationships becoming elevated for a period. The key with the time component is that just as time passes, correlations come and go, lasting anywhere from weeks to months or years. And they constantly vary in strength. The point of the fundamental economic relationships portion is that there is nearly always a real world relationship between assets that account for much of a correlation’s existence. Those relationships are in turn driven by changing economic and market environments that adjust over time. Another important reason behind the frequent appearance of intermarket correlations is you! The traders who actively speculate, hedge and invest based on correlations, whether intuitively or programmatically, generate a self-fulfilling feedback loop in the process.

The downside here is that when correlations break down, many traders are on the same side, exacerbating the resulting divergence and market fallout. That’s why it’s important that your trading software not only uses intermarket analysis, but also employs predictive indicators to forecast trends.

Short Term Trading and Market Correlation

Most statistically significant correlation studies span long time horizons. Unfortunately, they provide little reliable insight into shorter-term price relationships, which is where most traders focus. The result is that ostensibly time-tested relationships can, and frequently do, break down in the short run (intraday or during a few days). As a result, traders employing correlation based trading strategies need to remain especially alert to short-term divergences in addition to longer-term shifts in the underlying economic environment.

Again, enter the importance of software like VantagePoint. Relying on its proprietary, patented technologies that apply neural network pattern recognition to intermarket data and its patent-pending technologies that then create leading indicators, VantagePoint helps spot the short term shifts in market correlations.

Still it’s important to remember that correlation is not causation. Just because two assets show a degree of correlation does not mean that movement in one is necessarily causing the other to change. Especially on an intraday basis, it is critical to have a sense of which market is leading and which is following. The primary catalyst will usually be some piece of fundamental news or data, but you need to find that out and discern which market is dominating at any given moment. Technical analysis of correlated markets is also required, as the lagging asset may suddenly play catch-up if it breaks an individual technical level.

This requires that your technical indicators to be leading and not lagging!

Correlations are irrelevant if your Technical Analysis Can’t Keep Pace

Many technical indicators, such as moving averages, attempt to filter out short-term price fluctuations so that the underlying trend can be observed. A side effect of doing this is that the technical indicators tend to lag behind the market. Such technical indicators are referred to as lagging indicators. This lag effect typically causes the trader to respond late to market changes, resulting in lost profit opportunity and risk of increased losses.

Still, moving averages are very popular because they smooth out the movement in prices, are easy to calculate and understand, and depict the underlying trend.  But, the lagging nature of moving averages has always been the bogyman that has kept them from realizing their true potential.

VantagePoint employs proprietary computer processes which address these limitations and overcome the lag effect through the development of methods, systems, and devices that combine both actual and predicted data derived from the application of neural networks to intermarket data found to be most influential on each specific primary market.

In one aspect of the invention, an algorithm is used to integrate the predicted data with actual technical indicator values to create a hybrid technical indicator that overcomes the lag effect that was previously thought to be an inherent aspect of using technical indicators.

Again, market correlations don’t move markets, a confluence of factors do and this requires state of the art, predictive technical analysis for traders looking to capture these relationships.

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Stock Trading Basics – The Importance of Technical Indicators

March 5th, 2015 by VantagePoint Software

What is the importance of technical indicators in today’s trading conditions?

The Importance of Technical Indicators in Stock Market AnalysisYou’ve done the research on a company, evaluated their balance sheets, and taken into account the P/E ratios and other projections. While this due diligence is extremely important when trading stocks, to maximize your potential for return, make sure you aren’t neglecting the importance of technical indicators in your trading arsenal.

 

Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Technical analysts do not attempt to measure a security’s intrinsic value, but instead use charts and other tools to identify patterns that can suggest future activity.

Technical analysis can be broken down into a number of sub categories depending on the types of technical indicators.

Trend Trading Indicators – Trend Lines

Experienced traders say the first thing any trader should know about a market is the trend. A market can only do three things – it can go up, it can go down, and it can go sideways. Trend Lines are an important trading tool for identifying and confirming the trend direction. They can also help predict areas of support and resistance and help traders spot important chart movements and significant price points.

A Trend Line is a straight line that connects a series of price points. The more price points the line touches, the stronger and more important the trend line is perceived to be. As a general rule, it takes at least three distinct points to confirm a valid trend line.

An Uptrend Line has an upward slope and is drawn by connecting three or more low points on a chart. Each low price point must be higher than the preceding low price point to form the positive sloping line. An Uptrend Line can act as support in a positive trending market. As long as prices continue above the Trend Line, the uptrend is considered intact. If prices break below the Trend Line, it could be an indication that the uptrend is coming to an end.

A Downtrend Line has a downward slope and is drawn by connecting three or more high points on a chart. Each high price point must be lower than the preceding high price point to form the negative sloping line. A Downtrend Line can act as resistance in a negative trending market. As long as price continue below the Trend Line, the downtrend is considered intact. If prices break above the Trend Line, it could be an indication that the downtrend is coming to an end.

Trend Trading Indicators – Moving Averages

Trend lines are the basic indicator of trend, of course, but they are quite subjective, depending on the eye of the beholder. A line that might fit one time frame may not be right for another time frame.So analysts have refined technical indicators that can verify visible trend observations from a price chart.

Perhaps the simplest to understand and most widely used of these technical indicators is a moving average, which traders have used for many years to smooth out erratic short-term price fluctuations to reveal existing trends or situations where a trend may be ready to begin or about to reverse.

The Simple Moving Average (SMA) is calculated by adding prices for a specified period of time and dividing by the number of prices in that period to get an average. Each price is given an equal weight. As each new price becomes available, the oldest price is dropped from the calculation. Many traders use a six day moving average.

Moving Averages and the Importance of Technical Indicators

With a Weighted Moving Average (WMA) more weight is given to the latest price, which is regarded as more important than older prices. If you are calculating a three-day weighted moving average, for example, the latest price might be multiplied by 3, yesterday’s price by 2 and the oldest price three days ago by 1. The sum of these figures is divided by the sum of the weighting factors – 6 in this example. This makes the weighted moving average more responsive to current price changes.

Moving averages have several uses: (1) Reveal trends by smoothing out data when market “noise” produces erratic price patterns, (2) identify points where trends may be ready to begin or end, (3) indicate shifts in market momentum based on the performance of price vs. a moving average or one moving average vs. another.

But most moving averages are lagging indicators. While they are great at identifying past market behavior, they have no predictive value. The higher level moving average is the Predictive Moving Average (PMA) used in the VantagePoint trading software.

With VantagePoint’s PMA, six days are still averaged, but day five and day six are predicted. This minimizes, if not totally eliminates, the lag. Now, the important key here is that the two days of predicted data are derived from the ongoing “under the hood” work of neural networks and intermarket analysis. Vantage Point takes technical analysis to a whole different level.

Moving Averages and the Importance of Technical Indicators

Momentum Trading Indicators

Traders are obviously interested in prices and how they change over time, but they are equally interested in measuring how fast prices are changing – the momentum of the market. Is the velocity of a price trend increasing or diminishing? Does this measurement suggest anything about future price direction?

Momentum is simply the difference between prices over some period of time. What distance does price cover in what amount of time? A price at any given moment – $42 for Microsoft stock (MSFT) for example – is just one price and doesn’t indicate whether prices are moving up or down. If the price rises $2 in one day, a trader now has a distance and a time to compare with previous price movements and arrive at a momentum value.

Momentum and Trend Trading Indicators Combined -MACD

Momentum indicators are often combined with trend following indicators such as the Moving Average Convergence Divergence Indicator (MACD).

The indicator consists of a MACD line, a Signal or Trigger line, and a Histogram. The MACD line is typically calculated as a 12-day Exponential Moving Average (EMA) minus a 26-day Exponential Moving Average (EMA). The Signal line is typically calculated as a 9-day EMA of the MACD line. The difference between the MACD line and the Signal line is represented by the Histogram.

Signal line crossovers are the most common usage of the MACD indicator. When the MACD line crosses above the Signal line, it could be viewed as a bullish crossover and suggests the trend has turned up. When the MACD line falls below the Signal line, it could be viewed as a bearish crossover and suggests the trend has turned down.

While the traditional MACD can be a valuable indicator, it is still lagging. However, the proprietary Predicted MACD in VantagePoint utilizes a 20-day EMA and a 10-day EMA, with a 9-day moving average of the two values as the trigger line to predict trend changes 1-day in advance.

When the Predicted MACD line crosses below from the trigger line, this predicts a possible reversal of the current uptrend to a new downtrend. When the Predicted MACD line crosses above the trigger line, this predicts a possible reversal of the current downtrend to a new uptrend. Another crossover indicator occurs when the Predicted MACD crosses above or below a “zero” line, which is the point where the values of the two moving averages that make up the MACD are equal.

Predicted MACD also defines overbought/oversold conditions in a market when it pulls away from the trigger line, suggesting the price of the market may be due for a correction that will bring the averages back together. Predicted MACD also spots underlying strength or weakness in a market when its movement converges or diverges from the movement of prices.

Trading Profit is Obtainable

The predicted MACD is just one tool, and as any trader knows, to be successful in the markets, you need to employ a confluence of factors. This includes strong fundamental analysis of the stock you want to buy combined with a cutting edge technical analysis tool like VantagePoint predictive trading software.

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Predictive Trend Moves in the S&P 500

March 4th, 2015 by VantagePoint Software

trend moves in the S&P 500

There has been a ton of buzz around the S&P 500 this week as it hit an all-time high on Monday and then dove to a 2 week low today. This is the exact volatility that sends unprepared traders for a tailspin and prevents them from cashing in the profits they desire. When nerves kick in and emotions take over, traders almost never prevail. How are some traders getting ahead of the market and forecasting these trend changes in advance to preserve their profits? Watch the video below to find out…

The Power of Predictive Indicators

Today’s technology allows for traders to get ahead of market trends through the use of Intermarket Analysis – analyzing global markets and their effects on one another. By recognizing patterns and applying neural networks – VantagePoint gives traders a 1-3 day lead to position themselves to enter or exit trades before the trend occurs.

As you can see above – our software showed a crossover on February 4th which indicated the trend was going up. The very next day the E-mini S&P 500 rose 28 points. In the last 15 trading days the market has risen 85 points which resulted in a profit of $4,254 per contract.

What’s next for Trend Moves in the S&P 500?

We didn’t stop there. We took a look at what VantagePoint is showing in terms of future price trend moves in the S&P 500. As the angle of our predicted moving average starts to flatten we can see that the trend is losing momentum and our neural index at zero indicates that we are predicting weakness over the next couple days. This information was available to VantagePoint customers last night at 6:30EST – giving them the accurate information and confidence they needed to make the right moves today.

It’s easy to see how having the right trading tools in your arsenal can make all the difference.

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