Global Market Watch
The Global Market Watch is not a trading system. It is designed to provide an objective computer analysis of all leading world markets based upon technical price movement manifested through pattern recognition. This is not an interconnected global correlation, but each market is analysed using the same tools and in this manner. The tables give you a bird’s-eye view of the world without having to read analysis from numerous sources just to ascertain what action needs to be taken (if any).
The Global Market Watch is not intended to provide a fundamental comment nor a trading recommendation. In any given market, there might be intervention, supply/demand issues or even market manipulators that could be affecting the trend of that market for a brief. The computer analysis is designed to provide an unbiased view of the trend independent of human input or interpretation. This independence enables it to provide consistent results. It does not replace individual market analysis be it system, technical or fundamental. Socrates provides the individual market analysis with turning points, reversals, currency studies, and technical analysis for each market.
The Global Market Watch provides analysis based upon five levels of price activity. All of these levels might agree at times or they may even be in opposite positions simultaneously. This can reflect counter-trend moves or even the start of a change in the long-term trend. Our computer analyses each level in a separate and independent manner. The purpose of differentiating the levels is to provide an indication of the overall market condition.
Short-term changes in trend are common. You get a rally in a bear market when the bulls come out and declare the low is in place. Likewise, a market will be on its way to breakout out long-term and enter into a phase transition, while the majority are bearish proclaiming the market will crash. The Global Market Watch is designed to differential these types of differing trends to slice through the confusion while identifying the markets that agree on all levels illustrating the trend is still intact. The primary objective is to eliminate personal opinion as much as possible.
The Daily trend of any market may swing from bullish to bearish and back again as many as 35 times during the course of a full year. Any market naturally oscillates back and forth regardless of its broader trend. Nothing moves straight up or down forever without making reactions along the way. Therefore, this indicator is intended for those interested in extremely short-term trading patterns.
The Weekly level of a market is where most portfolio analysis begins. Large investment portfolios cannot move big positions back and forth for a minor reaction over the course of a few days. For this reason, the daily trend might turn bearish while the weekly trend could remain bullish or neutral. Disagreements between levels merely suggests that a change in the longer term trend has not been confirmed. Matching conditions on the daily and weekly level is not a confirmation of a change in long-term trend.
It is common to see the weekly level swing back and forth between bullish and bearish perhaps as many as four to twelve times per year. This often indicates a shift in near-term trend. While a reaction might last for three to thirteen weeks. This is when you should refer to the Reversal System in that given market.
The monthly level of a market is where the long-term trend is defined. The monthly level distinguishes the dividing line between what we would call a bull or bear market. Swings from bullish to bearish are far less common and may take place perhaps once or twice over a several year period. Look to the monthly level to determine if a long-term trend is still in motion or if there is some danger of making a significant change in the overall direction of the market.
The comments generated by the computer indicated with a yellow background are intended to highlight a possible important event, which maybe reflect a change in the trend. Comments such as "POSSIBLE IMPORTANT HIGH" or "LOW" are determined by the computer’s ability to test that market against historical patterns of how all markets reach major highs or lows. This is not limited to the pattern of just that given market. When the text is BOLD, the current pattern in a market has matched some other major historical event. The time-period against which this is tested spans hundreds of years using markets globally.
Crash Mode / Breakout Mode
The computer may generate a comment such as "CRASH MODE" or "BREAKOUT MODE". These comments are based upon the internal momentum of a given market be it to the downside or upside respectively. This is not determined by historical pattern recognition, but rather by quantitative models including stochastics in combination with a variety of other models. These comments are intended to be a cautionary notes rather than buy or sell signals.
The background color on computer comments is also a reflection of the computer's determination of the trend. For example, the word BULLISH on a light green background is less than one on a dark green background. The same is true for light red and red. Gray is used for neutral positions where the trend can go either way. Of note, if a market turns neutral after being bullish it has a higher degree of turning bearish if other levels are shifting into that direction as well.