The Market Map Tutorial

Fact Sheet | General overview | The Perfect Market Map | Anticipation Move | Inversions | Other examples | Summary

Trading Example

Trading the Russell 2000 stock index futures using the Market Map

Friday the 1st September 2006 was expected to be a good trading day. The stock market had consolidated near the high end of its range and the SP500, Dow and Russell 2K all looked poised to either break through resistance and rally significantly or fail and trade back into the range. The fuel for a move in either direction should come from the Non-Farm Payroll report released at 13:30 GMT on that day.

The Map for the Russell 2K on the 1st September indicated that a turn would be made relatively soon after the open. The market would then trade in the opposite direction for the rest of the day.

The unemployment figures released before the market opened caused the Russell 2K index to open with a gap. Many traders feel that gaps get filled, sooner or later, and often after a Non-Farm Payroll report the market will gap up or down and then trade back and fill some or all the gap.

The Market Map for the Russell 2K forecasted that a low would be made shortly after 15:00 GMT. The index came plunging down just after 15:00 and hit a geometrical key level (click on chart to enlarge it)

The Map and the geometry set up a high-odds trade for a BUY SETUP. The Map uses cycles and supports Fibonacci extension/retracements and other technical measures very well. It also gives the trader higher odds of success when using the Maps.

A trade was placed in the Russell 2K futures as the Market Map pointed to a sharp reversal

The market NEVER traded lower after the trade was executed. The next couple of hours the Russell 2K trended higher and followed the Map perfectly (click on chart below to enlarge it).

The Map turned lower after a couple of hours of trading, and the trade was closed for a profit.

It is possible for the Market Map to invert during the day. The signal to look for is when the Map takes out the high which is made in accordance with the Map. In this chart the Russell 2000 makes a high at 17:00 GMT in accordance with the Map. However, this high is taken out 30 minutes later at 17:30 GMT, and the index does not turn until the Market Map turns back up, in effect showing an inverted chart. While the Russell 2000 trades lower for the next hour, the Market Map points to higher prices. The Russell 2000 index stops its retracement at the exact time when the Market Map turns back down again. It is therefore important to be alert to these inversions because the turning points are almost always still valid.

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