How To Read the Risk, Return, Rotation Reports:
The Risk, Return, Rotation reports are a powerful tool for investors and traders for spotting where money is moving and identifying which prospects offer the highest potential returns relative to risk and avoiding marginal moves. We identify both long and short opportunities.
We track a number of major indices, commodities and currency pairs on a daily basis, plus more on a weekly basis.
The first part of the table provides information on recent trading and key levels.
For each market we identify the primary trend of the last month; Upward, Downward, Sideways, Topping or Bottoming. We note changes in Green or Red if the trend has become more bullish or bearish.
The RSI column identifies if a market is short-term overbought or oversold. Readings above 70 or below 30 show an overextended market and are highlighted in orange. We consider a move out of overextended territory and crossings of the 50 line to be signals which we identify in green or red and are bolded.
We identify first and second support and resistance levels. Changes are marked in green or red identifying if a level has moved up or down.
Some of the factors we use to determine support and resistance include: previous highs and lows, trend lines, moving averages, measured moves and Fibonacci retracements.
The second part of the table highlights the returns relative to risk. We show the distance from the current price to support and resistance levels. If there is a 2:1 ratio between support and resistance we bold them with green showing more upside potential and red showing more downside potential.
We also provide notes on markets where there is something interesting to highlight like a pattern, level or average breakout or a key test underway.