The Four Pillars Trading Solution Morning Note: April 14, 2014

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                                 Decision Making Architecture for Successful Trading

April 14, 2014

The recently equity sell-off has been quite severe for the former high flyers.

If you are wondering when the stock market decline will be over, I suggest watching bonds.

Over a week ago, I wrote that while traders were fretting over equities and precious metals, bonds were the highest probability trade at the time. 

We are long TLT:


Bonds have been forming very consistent daily Arcs, that are much easier to trade than consolidation patterns.

Now that our expectation of a new high was met, bonds should start to decline at any time, likely sometime this week.  Please note the indicator non-confirmations of the new price high, marked in the pink downward sloping trend lines.  Once the top is in, I expect a few weeks of downside.

The next swing high may mark the top in bonds, a top that will likely coincide with a tradeable equity low.

Watch signs of a bond top in order to find a low in stocks.

Thanks for stopping by and have a great trading day!

– Geoff




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  1. Jack Senett(23 comments)-
    April 14, 2014 at 12:29 pm

    New Kaimu’s Sound Money is ready to read. Click “LIKE IT’S 1999!”, under Recent Posts in the right-hand column.

  2. Bob(128 comments)-
    April 14, 2014 at 1:52 pm

    Thank You Kaimu . Last week approximately 1000 supporters of a Mr Bundy in Navada showed up to object to 200 armed government agents collecting Mr. Bundy ‘s cattle . The spirit of Lexington survives . Yes the fraud continues but there are flickers of Hope .

    • kaimu(413 comments)-
      April 14, 2014 at 2:22 pm

      Aloha Bob! Mahalo back at ya! I love this Joe Biden quote I put at the end of it …

      “When the stock market crashed, Franklin Roosevelt got on the television and didn’t just talk about the princes of greed. He said, ‘Look, here’s what happened.” – Joe Biden, current US Vice President

      How many who voted for Obama or Biden would even question that “FDR got on television” in 1929? The first US President who offered a televised speech was Truman in 1947!

      My point is that I am sure Biden knows television did not exist in 1929, but he was frantically searching for words. Let’s hope it wasn’t a scripted speech. If it was then it was no doubt written by a millennium staffer! Yet if Biden said that quote enough, with authority, I am sure plenty of people would believe it and even some who aren’t sure would eventually buy it! Orwell laughs!

      • Grym(230 comments)-
        April 14, 2014 at 3:38 pm

        I expect the writer figures Al Gore invented TV slightly before he moved on to develop the internet 😉

        I miss Jay Leno. Perhaps Joe Biden would be a good replacement 😉

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