As I forecast Friday, stocks are jumping

Stocks are rallying right on cue, says John C Burford. And all it took to profit was a careful reading of the charts.

What a difference a day makes. No sooner had I written in Friday's post(always penned early in the day):"With yesterday's move to a new low, I may have the final wave 5 in place. Now that would be an interesting development. While every shoeshine boy and financial journalist in mainstream media is busy shorting shares (see my postof 1 February), can this be a great setup for a counter-trend rally of some magnitude?

"That would shock the vast majority with bearish sentiment so strong and that is what markets do, they hand the biggest majority the biggest losses.

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($50 x S&P 500 index)Row 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 3,829,352
Commitments
332,113569,052421,7352,462,3982,497,4143,216,2463,488,200613,106341,152
Changes from 02/02/16 (Change in open interest: 204,895)
8,667-6,52344,91395,131168,685148,711207,07556,184-2,180
Percent of open in terest for each category of traders
8.714.911.064.365.284.091.116.08.9
Number of traders in each category (Total traders: 165)
140137151250266463481Row 8 - Cell 7 Row 8 - Cell 8

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.