TRADING CENTER INDICATOR (TCI): TECHNICAL ANALYSIS ON DOW JONES INDUSTRIAL

Dow Jones Industrial closed on Friday the 16^th of November at 12,588.31 points. The downtrend which started one month ago still continues. Dow was about 13,661 points in the middle of October 2012, so the drop since then is more than 1,000 points, so far. In order to estimate the duration of that downtrend market we are implementing the TCI Indicator on Dow Jones Industrial and here are some results.

TCI on Dow at a Glance: 

• Dow Price: 12,588.31
• Short-Trend: ↓
• Mid-Trend: Possible Rebound, ↑
• Possible Turnaround Dates: 20th of November / 30th of November

TCI Indicator on Dow Jones

In the table below we may see some recent daily statistics concerning the Dow Industrial, and at the last column we may find the daily calculated price of TCI indicator. As we may easily observe, Dow Jones trade inside a clear downtrend channel. TCI indicator is found today at about -11.02 {based on the closing of Dow at 12,588 points}. Historically that level of TCI has given traders good returns of 5-10%.

Read more: TCI Trading Signal on Dow Jones November 2012

After some time, trading signals using TCI technical analysis system are back in the Trading Center. The current TCI signal concerns Dow Jones Industrial and indicates a possible beginning of a mini-bear market. Firstly here is the signal:

TCI Chart on Dow Industrial since 2002

As we have mentioned already in previous signals, one of the greatest advantages of TCI analysis is the visualization of the results. On the following TCI chart from February 1st 2002 to today (2/13/2013) we may observe the point +10% to often signal mini-bear market corrections of 10%. TCI chart is followed by a line chart of Dow Jones Industrial during the same time period (closing prices).

Read more: TCI on Dow Jones February 2013

Nasdaq is on the move and Google is one of the most interesting listings on Nasdaq. Google is the global leader in the web-advertising industry and one of the most innovative large firms in the world. Google’s current P/E ratio at 25.6 may be considered as normal, given the high annual expected earnings growth, for the next five years (12% annual expected growth on average). As concerns Google share price, currently it is moving in a nice long-term bullish trend that we are going to investigate below. But first we are going to evaluate our previous signal on GBP/USD.

Previous Signal on GBP/USD

Google {GOOG} at a glance

Here are Google’s Key Figures

Google Share Price Trend

The master trend for Google’s share is definitely bullish and strong. Before this bull rally ends we are going probably to see Google’s price to $900 or even $1,000. But given the beta ratio of 0.97, Google’s trading is in high correlation with the movement of the Nasdaq Index. Therefore, we should expect fluctuations according to the overall market trend, which currently is strong and bullish too.

Chart: Google’s Share Closing Prices (2004-20013) and TCI Long

Read more: Signal on Google May 2013

Greek Stock Market Slumped 90% to 475 points -Now it's booming and head far above

Recently the Greek Stock Market has entered a booming phase, but why?

Greek Economy at a glance: The Greek economy is in deep recession for five years in a row. GDP decreased by 6.9% in 2011 and is expected to decrease by about 5% in 2012. Furthermore, unemployment is reaching 25% in 2012 and the Greek economy is expected to return to growth in late 2013, as the Prime Minister Mr. Samaras has recently claimed.

ASE Stock Market Index Today at 752 points

The Greek Stock Market Index (ASE –Athens Stock Exchange) closed at 752.2 points on September 25th and it is about 58% or 277 points above its low of 475 in June 2012 as it can be seen in the following chart.

Why the Greek Stock Market is rebounding?

In the past two years, the Greek Stock Market has become extremely bearish and fell 90%. The current rebound is considered as an absolutely normal market reaction. Even today the Greek stocks seem to be considered cheap. The total capitalization at 750 points is about 29 billion Euro, while the country’s GDP is something about 190 billion Euro. That means ↓

∟ ASE Capitalisation / GDP = 15% (which is very low even for the dramatic Greek Economy)

Read more: Greek Stock Market Slumped 90% to 475 points

NASDAQ PATTERN & FORECAST USING HISTORICAL DATA

Nasdaq is certainly one of the most popular and most active stock markets in the world. In this analysis we, are going to investigate the course of Nasdaq Composite Index since 1971 using TCI analysis and we are going to focus on the three bull markets of the past 20 years. Our goal is to determine the duration of the current Nasdaq bull market that started in 2009.

Nasdaq Line & TCI Charts (1971-2013)

The following multi-chart consist of three individual charts:

1) Line Chart on Nasdaq Closings since 1971 (1st in a row chart)

2) TCI Long Chart since 1971 (2nd in a row)

3) TCI Short Chart since 1971 (3rd in a row)

The line chart is based on daily closings prices during the period 1971-2013. The TCI charts may help us measure and understand the Nasdaq historic returns. Here are some general conclusions deriving from the 2 TCI charts:

TCI LONG:

Read more: Nasdaq Trading Signal April 2013

During May 2012 Facebook entered the Nasdaq by pricing its IPO at $38 per share. At the end of July 2012 Facebook share was traded at about $30, and today it is traded between $19 and $20. But why did Facebook share crashed like that? Is it because Goldman Sachs and other Institutional investors are selling their shares? No, the real reason for a 50% stock slump is based always upon fundamental factors. At the end of July Facebook reported a growth slowdown without even easing worries about future reports. But let's see some important fundamental figures about Facebook.

Some Important Facebook Figures

∟ Total Revenue and Net Income: Sales 4,33 billion USD, EBITA=1.07 billion USD and net income about 0.77 billion USD.

∟ Important Ratios, Price / Sales=9.3, Trailing P/E=67.06, Forward P/E=30.76, Price/Book=3.12

∟ Cash and Debt: Cash 10.2 billion USD and debt 0.7 billion USD

∟ Facebook Market Capitalization: 41.52 billion USD (in a Facebook share price of about $19.70)

(source: Yahoo Finance)

Facebook reminds us of the story of the .coms shares in the late '90s. High expectations and weak fundamentals sooner or later are forming great bubbles. So the Facebook bubble eventually has crashed. This means bad news for Facebook existing Investors but maybe it means a trading opportunity for the rest.

The 3rd Largest IPO in US history

Facebook's IPO raised $16 billion, and it was the 3d largest IPO in US history. The largest US IPO raised $19.7 billion (VISA) in 2008, and the second largest US IPO raised $18.1 billion (automaker General Motors) in 2010.

Read more: Trading Signal on Facebook Share 2012