FTSE 100 Market Report: Clinching the Bull Market Case

Sunday, Dec 05 2010 by
14
FTSE 100 Market Report Clinching the Bull Market Case

As regular readers will know, I've maintained a bullish stance overall on the key indices throughout 2010, and we've been rewarded with further gains since my last report. Last time, the Dow stood at 11118, and it has climbed to 11382 - very nearly the highest level for the year. The FTSE100 has also advanced from 5675 to 5745 since my last report. Interestingly, for much of the time since the previous report, the markets were moving lower, but once again they have recovered strongly, a sure sign that the bull market - called in these reports in May 2009 - has plenty of upside left in it. I note a nice correlation with the progress of the stockmarkets and the declining clamour from the once vociferous bears (sold-out bulls?)

Two months ago I predicted that the DAX would be the first major index to break out (upwards) from its multi-month trading range. This it duly did, and it has continued to be the leader of the index pack. In my last report, it stood at 6601. It has since advanced to 6947. Like the Dow and FTSE, it also suffered a sharp, albeit relatively small, correction, yet has bounced right back and is a whisker off the year's high.

I said in my last report that the DAX breakout will "act as a precursor for the other indices". The Dow has now cleared the upper boundary of its range, and it is more or less inevitable that FTSE will follow.

The action of the stockmarket indices serves to underline what I said last time about where we are in the cycle. They have been moving higher since March 2009, and I regard most of the movement since then as the first stage (of three) in the bull market. I believe we are now starting the second stage with the breakouts from multi-month consolidations. The second stage should see an increase in participation as one-by-one the bears have to concede that their case is lost. This of course should propel the market onwards and upwards, rewarding the early bulls, or should I say the technical analysts who recognised and understood the significance of the Coppock signal in May last year.

Away from the stockmarkets, it's been a bit trickier, with anticipated weakness in the Dollar materialising only briefly. £/$ was at 1.60 last time, and initially did move higher as predicted, reaching 1.63, but short of the target at 1.68. Since then, however, it has fallen back, and currently stands at 1.58. The chart is in a neutral position right now, so I'll wait for the next development before making any further forecast.

Gold has continued its bull run, climbing to $1414 from $1358 last time. I mentioned a warning sign of a possible final stage in Gold's bull market in my last report, but stressed that we would have to wait for a clear signal on the chart before we try to call any reversal. I said that so far we haven't had one, and this remains the case. The price did shape up for a small head & shoulders top, but never completed it - which in fact is a bullish development. So the situation remains the same - this is still a bull market until the chart gives us evidence to the contrary.

This is my last report for 2010. Once again, I hope the effectiveness of the techniques that I use and teach have been clearly demonstrated by maintaining a bullish stance throughout the year on the key stockmarket indices.

May I be one of the first to wish you a Happy Christmas and a prosperous New Year.

(c) Robert Newgrosh


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32 Comments on this Article show/hide all

fuiseog 5th Dec '10 13 of 32
1

realist

"a person who tends to view or represent things as they really are"

www.dictionary.com

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Isaac 5th Dec '10 14 of 32
3

Stockhunter

I don't agree with Robert's 12,000 FTSE. I think he is wrong. At somepoint interest rates will rise and that will trigger this ONE Global market to correct.

Yep you read it correct. FTSE, DOW, Commodities it is all one market that is influenced by the $. All the Fed has to do is indicate their stance has changed and that interest rates are going up and the markets will come down.

I take notice of the indicies, because no matter how much I like my stocks, if the DOW/FTSE falls then my stocks will fall with it.

I am expecting a deep correction at somepoint, perhaps DOW back to 7000. Just don't see it happening anytime soon. The markets telling me to go long, so I am happy to stay long.

I certainly intend to sell up when most of the uptrend is done and buy back when it all crashes back then. I think a better stratey is to sell once the markets have moved up alot and valuations of most stocks are just too expensive and does not offer value. And then buy back when the markets crash and everything becomes silly cheap again.

Just holding and adding to uptrends can make a lot of money. Trend trading is probably one of the best methods to make money IMO.

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stock sleuth 5th Dec '10 15 of 32
1

Realistic review of Mr Newgrosh:

http://www.financial-spread-betting.com/New-skills-uk.html

New skills (www.new-skills.co.uk) is run by Robert Newgrosh, who has been running courses for at least 15 years to my knowledge. Robert holds a distinction from the Society of Technical Analysts and has been a full member for 18 years so we know we're dealing with a professional here... But then why is he running these courses if he's a great analyst? Maybe it's just to get away from the screen and give those sore eyes a rest! Or maybe he wants to give something back to the trading community? Who knows!

New Skills are not selling a system or methodology, just basic trading skills and technical analysis. Personally I have never been on one of the paid courses (except of course the free seminar), but have spoken to at least 9 people that have - they found them to be very good and excellent value for money. Robert's emphasis on stop-losses and how to avoid losing big-time will help you stay in the game long enough to start winning.

The free course (conducted in London and Stockport) was certainly for ultimate beginners. Well it's more aimed at spending 4 hours trying to 'convert' fundamentalists to technical analysts! Trying to help them understand that stocks work on supply and demand and the emotions of greed and fear. Mr Newgrosh has a great knowledge of his field and really understands all aspects of technical analysis and is able to comfortably answer all the questions of doubt that were thrown at him. I would say that the price of his courses is really good value too. And if i were a fresh new trader i'd be heading to him for courses and not a broker promoting daytrading to increase their spread and commission profits. Trying to make you churn as much money in their system as possible. It seems that changing from a fundamental viewpoint to a technical view is almost as hard as it would be to change your religion!.......

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tournesol 5th Dec '10 16 of 32
4

I'll happily share my own performance with anyone who is interested. Probably best in a different thread though.

T

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thebuffoon 6th Dec '10 17 of 32
3

In reply to Robert Newgrosh, post #8

Of course you can trade indices within a SIPP, although my pension fund isn't structured as a SIPP.

That's the trouble with 'technical' analysts, particularly 'qualified' ones. They see things that aren't there.

I was just asking if one can trade indices in a SIPP, not about the type of pension you have! :^}

Rather than just popping up to post at opportune times, why not take up Tournesol's offer; lay your trading history on the line.

Buffy

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Robert Newgrosh 6th Dec '10 18 of 32
8

In reply to thebuffoon, post #17

I simply do not understand any of these comments.

I publish every four weeks and have done so for four years, and do not "pop up at opportune times"

This time, I had to delay the report for reasons that had nothing to do with the level of the markets.

The entire four-year history of the reports is available for anyone to view. Highlights are in my profile.

By providing an extra piece of information regarding how I structure my pension, you've taken this and turned it into an insult against technical analysts.

You obviously have an agenda.



Financial Training: New Skills Financial Markets Training
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tournesol 6th Dec '10 19 of 32
18

I have to say that personally I am a sceptic wrt most technical analysis. But that doesn't mean that I think it is right to be rude to technical analysts or dismissive of their approach - I hope that my own comments above were not interpreted as impolite . I meant no disrespect to Robert and I'm sorry of my question has diverted discussion into a conflict zone.

That being said, it seems to me that the proper way of assessing the claims of TA is by applying the scientific method.

Retrospectively - Historic records can be analysed and the results of applying TA can be compared against other methods of investment management. Should be a simple matter of facts - argument and assertion should not enter into it.

Forward looking - Investment decisions can be recorded transparently and in real time and the results monitored. Outcomes can again be compared with other methods.

I've never done such a bench marking assessment myself nor have I seen one done by other people - so to that extent it seems to me like a discussion of belief rather than evidence/fact - but maybe the work has been done somewhere. Anyone know?

My own question about teaching vs doing had nothing to do with TA at all. I simply find it difficult to understand why a successful investor/trader would teach instead of working as a full time investor/trader - either on hisown behalf or on behalf of clients. I can understand professionals in other lines of business going into teaching but if the trade you are teaching is how to make money then I can't for the life of me understand why you would prefer to teach it rather than do it. That was my question. And I would put it to anyone who taught other people how to invest regardless of the methods/techniques they followed.

To my simple mind the people who are best placed to teach investment are those who have already succeeded to a significant extent. And I can;t imagine any of them actually devoting a substantial % of their time to teaching their skills to others.

Having said all that, I don't think it is at all appropriate for people to be impolite or hostile to Robert or anyone else who takes the time to write here. He expresses himself in very measured language, he is patently sincere and serious and he appears to be good at what he does. So let's not beat him up. Let's see if we can learn from him.

Robert, please do no be demotivated from continuing to write here.

T

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ohisay 6th Dec '10 20 of 32
5

In reply to tournesol, post #19

I've never done such a bench marking assessment myself nor have I seen one done by other people - so to that extent it seems to me like a discussion of belief rather than evidence/fact - but maybe the work has been done somewhere. Anyone know?

Barchart is a free website which shows the empirical results for a number of popular technical indicators .I've shown a link for TLW  but you can input other FTSE epics too and try them out . 

http://www.barchart.com/performance//TLW.LS

I was 100% fundamentals for a long time but after spending some time looking at a number of indicators about 5 years ago and back/"forward" testing them there are one or two that I now regularly use in certain situations -I'm still 90/95% fundamentals though and wouldnt be any other way..

I agree its all about whether these things work and empirical evidence is everything - the few occasions when I do use it are almost always profitable.If they were turning out badly I'd stop.

Incidentally one thing I did realise after that exercise is that stock picking isnt just about making money when you're looking at making decisions - there is a lot of "self validation" involved in the choice of stocks.I realised with TA that I was loathe to commit to mechanistic sells or buys [in the same way that I'm loathe to commit to stop losses.]

Its just not that much fun in my book but whatever floats your boat as they say.

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Robert Newgrosh 6th Dec '10 21 of 32
1

In reply to emptyend, post #2

"The bull market is built on sand.... Enjoy the suspension of reality while it lasts"  emptyend 18 March 2010

I am.

Financial Training: New Skills Financial Markets Training
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Isaac 6th Dec '10 22 of 32

Robert,

Would you be able to show us your trading record? Or infact tell us the shares you buy soon after and tell us when you sell ? Perhaps you can start your own thread.

Then we can follow your track record with more interest. It's just I've come across people who seems to be able to tell me everything and anything about markets/economics etc but they don't seem to make any money from it.

Also as a young kid I realised quite early on why most teachers in schools are not very good at their jobs, sadly for our kids the reason the teaching is so bad is because the so called teachers were never really any good to work in the private sector/industry so you end up with the weakest people teaching the kids.

Also I really have no issues learning from other people because I know there are people out there far smarter then me. But before I listen to them I like to know what they have done and how succesful they have been Otherwise how do I know how good they are ?

I want to surround myself with people more smart then me, then I can learn.

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Isaac 6th Dec '10 23 of 32
2

In reply to Robert Newgrosh, post #21

Robert,

Lets not take a few words out of emptyend's post to ridicule what he said. How about we re-read the whole paragraph in full ?

The answer to that is straightforward - the "bull market" is built on sand ....and a mountain of borrowed money. The start of the rally was very much needed in order to rebuild confidence but it has been sustained somewhat longer than the few months most expected (including me) by the near-zero interest rates and the perceived lack of other investment opportunities (which, incidentally, has also driven other asset markets like art and antiques higher too!).

I totally agree with the bold. Lets not delude ourselves. No P+F chart is going to save you if interest rates start to go up. And guess what the markets are indicating - US Interests rates are in an uptrending cycle.. That is what the markets are telling me.

The Fed follows the markets. And when interest rates start rising and they definetly will the markets will drop back and P+F charts will go out the window.

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thebuffoon 7th Dec '10 24 of 32

The Fed follows the markets. And when interest rates start rising and they definetly will the markets will drop back and P+F charts will go out the window.

Up, down, sideways. Who knows?

Inflation has sometimes been good for stockmarkets; sometimes it hasn't.

All these gurus predicting indices movements will get it right sometimes, and sometimes they won't.

Sadly............ it's clear that it's impossible to know when they will and when they won't; and that's why some of them try to obtain money just for talking.

Buffy

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emptyend 7th Dec '10 25 of 32
5

In reply to Robert Newgrosh, post #21

"The bull market is built on sand.... Enjoy the suspension of reality while it lasts"  emptyend 18 March 2010

I am.

Back in March the FTSE was at 5625, according to your own header. Since then it has been down to 4800 and has just clawed back to slightly above where it was in March.

You obviously enjoy the big dipper too.

Whilst the forecasters are lining up to sound bullish about next year, I still maintain that the rally is built on sand. At some point QE will be reversed, interest rates will rise and the markets will head south (as Isaac noted) - it is merely a gamble on governments (or random events) as to when. And it is simply dangerous to pretend that such things don't matter at all.

ee

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StrollingMolby 27th Jan '11 26 of 32
1

In reply to Robert Newgrosh

I believe we are now starting the second stage with the breakouts from multi-month consolidations. The second stage should see an increase in participation as one-by-one the bears have to concede that their case is lost. This of course should propel the market onwards and upwards, rewarding the early bulls


Where is the latest update, Robert? Do you still foretell the markets pushing ever upwards?

I hope you still intend to post and have not been frightened off by the earlier 'robust debate'...

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bugsmunny 27th Jan '11 27 of 32
1

I very much doubt he has been scared away as he says

I've been a qualified technical analyst for over 20 years, and a trainer for 17, having run more than 500 seminars


From an eye-balling the chart persepctive, I would say that the FTSE 100, is starting to move towards valuations seen based on many years of bubble economics..

I can't see what the fundamental strength of the economy is, that would return us to these kind of stock market highs. Short-term low -interest rates mean that investors are looking for quuick returns and this with QE is providing a risky mix.

Further rises make me more suspicious of an impending fall, rather than a "second stage" as bears concede the cause is lost.  Still I expect the current madness will continue for a while yet, but the reversal could be just as sudden and brutal as last time. AIMO

Cheers

 

BM

 

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bugsmunny 4th Apr '11 28 of 32
1

I guess I don't know much about how this site works.

I just noticed that the original article by Newgrosh, won some kind of medals, despite the fact what he wrote seems wide of the mark.

So odd that you can write an article saying I think the market looks like it will go higher, and that counts as useful journalism.

I suppose the FTSE faltering speaks for itself, and explains why he hasn't returned now raised the criticisms seem to have been pertinent.

Here's my totally subjective opinion FWIW, the FTSE will end the year at around the same level it started at, with a 25% chance of being substantially (10-20%) lower, and about a 10% chance of being substantially higher.

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Isaac 25th Nov '11 29 of 32
3

In reply to Robert Newgrosh, post #9

The action of the stockmarket indices serves to underline what I said last time about where we are in the cycle. They have been moving higher since March 2009, and I regard most of the movement since then as the first stage (of three) in the bull market. I believe we are now starting the second stage with the breakouts from multi-month consolidations. The second stage should see an increase in participation as one-by-one the bears have to concede that their case is lost. This of course should propel the market onwards and upwards, rewarding the early bulls, or should I say the technical analysts who recognised and understood the significance of the Coppock signal in May last year.

Robert Newgrosh

What stage of the bull market are we in now please?

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thebuffoon 26th Nov '11 30 of 32

Robert Newgrosh
What stage of the bull market are we in now please?


I'm afraid Robert can't come to the computer right now, he is busy selling everything he has got. :^}

He did pass on a message though. He said to tell you that we haven't, and won't be, going through a phase very similar to that of Japan.

Buffy

(Self appointed anti-BS reporter)

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emptyend 9th Apr '12 31 of 32
2

The FTSE100 has also advanced from 5675 to 5745 since my last report. Interestingly, for much of the time since the previous report, the markets were moving lower, but once again they have recovered strongly, a sure sign that the bull market - called in these reports in May 2009 - has plenty of upside left in it.

The above is an extract from the header, which was written on 5th December 2010.

The FTSE100 close on Friday was 5724.

In the interim, it has been a little over 6000 and a little under 5000.

Little wonder that he ceased to post his "insightful" monthly updates........... ;-)

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Isaac 9th Apr '12 32 of 32
3

In reply to Robert Newgrosh, post #21

Real Name: Robert Newgrosh

About Me:

I've been a qualified technical analyst for over 20 years, and a trainer for 17, having run more than 500 seminars. My company, New Skills Ltd, was established in 1993, and has led the way in quality training in this field. In 2002, New Skills won the Shares Magazine "Best Training Company" award. I now focus on 1 to 1 coaching in technical analysis, particularly Point & Figure technique, which is the primary method I use for my forecasts.

For the last four years I've been writing market columns every four weeks, and I'm pleased to say these have achieved a very high accuracy, quite possibly the most accurate in the UK having called all the major stockmarket moves, including the current bull market from May 2009.

You can see a list of the highlights below, and this also includes other forecasts that I've made going back to 2003. My reports will now appear on Stockopedia, and I will be very pleased to answer your questions on my methods, or other technical analysis techniques.

 

 

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About Robert Newgrosh

I've been a qualified technical analyst for over 20 years, and a trainer for 17, having run more than 500 seminars. My company, New Skills Ltd, was established in 1993, and has led the way in quality training in this field. In 2002, New Skills won the Shares Magazine "Best Training Company" award. I now focus on 1 to 1 coaching in technical analysis, particularly Point & Figure technique, which is the primary method I use for my forecasts.For the last four years I've been writing market columns every four weeks, and I'm pleased to say these have achieved a very high accuracy, quite possibly the most accurate in the UK having called all the major stockmarket moves, including the current bull market from May 2009.You can see a list of the highlights below, and this also includes other forecasts that I've made going back to 2003. My reports will now appear on Stockopedia, and I will be very pleased to answer your questions on my methods, or other technical analysis techniques.   more »



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