Trends only start when (almost) everybody is wrong

Trends change when almost everybody least expects it, says John C Burford. Let the charts be your guide.

On Friday, I explained how I use my 'headline indicator' to help forecast a rally in crude oil. This is a very useful tool in any trader's toolkit, so today on this (UK-only) Bank Holiday, I will delve a bit further into this much under-used indicator.

Most pundits and junior and senior mediareporters alike labour under the misconception that it is the news that makes the markets. Follow the news and you will understand how the markets work. It sounds so reasonable, doesn't it? A plausible story can be written around it and we all love stories.

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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.