This site is for anyone participating in the market! Use will differ according to your role and existing strategies.
Agile long/short hedge fund
Individual trader with margin account
Both of these types of participants can take full advantage of Pivotal strategies with ability to short, with huge scores in oil and various emerging markets possible last year; as well as more flexibility in positioning, meaning capability to substantially change the portfolio in the futures markets or via 3x ETFs. This means more use of medium term levels like quarterly and monthly pivots. Also, precise turns on pivots give some opportunities for very good risk reward using leverage. Pivots give great indication of trends and when they change, and are often very clear on turns as I've illustrated many times on this site (just check the Featured Posts section).
Less active, more long term
Portfolio manager, long only
Strategist for wealth management company
Long term individual investor
For all of these types of market participants, would it have been helpful to have:
Pegged 2008 as a trouble year from the beginning, as all 5 main USA indexes SPX, NDX, INDU, RTY and NYA opened below their YPs and never recovered? (FYI, NDX, INDU and NYA tested YPs from underneath in April-May 2008 and failed to recover.)
Then shifted bullish as all 5 of these recovered YPs July - November 2009, and remained bullish based on tech strength *for exception of 2 days of uncertainty* in 2011, until 1/7/2016? That's right, from July 2009 market leader NDX was above pivots except for 8/19/2011 and 8/22/2011, which were slight breaks and not clear rejections.
Consider the very popular daily 200 moving average on NDX broke several times in that span, while NDX pivots held in all other crisis points including October 2014 and August-September 2015. If you pick another moving average, the weekly 100 for example, then you were in the market but only had 2 NDX buys in 2009 & 2011, whereas pivots gave several buy points on the way up.
So pivots are a great help to long term investors too! Save time and use weekly charts with long term levels only!
And then consider possibilities in other asset classes, managing sector over-weights and under-weights, or simply save time on analysis:
Would it have been nice to be bullish gold 2002-12, excepting a few weeks each in 2004, 2005 and 2008 - then seeing clear trouble in early 2013 with a clear rejection of both long term pivots?
How about avoiding or under-weighting oil & energy from July-August 2014 with clear break of the YP and HP and below long term pivots since?
Or stop wasting time on the endless rate move speculation and see that TNX has been below a long term pivot (either YP or HP) for all but 5 weeks since the end of 2013? In other words, if TNX is below long term levels then you can just stop worrying about rates going up.
So, if you are active there are more possibilities but if any category of long term then pivots are still the best tool I know to be on the right side of the market. In other post soon I'll discuss positioning thoughts for both active and long term strategies.
Some categories of traders I am not directly addressing:
Very short term players, going for intra-day or very short swings like 1-3 days. The method definitely works using daily and weekly pivots, but the moves are too fast to post about when writing on a site 1-4x a day.
Forex traders. I address currencies about once a week if time, and although pivots work this is just not my focus.
Individual stock traders. Oh pivots work fantastically well. In fact when investigating the method the pivot action on several popular stocks completely convinced me. I would rather spend my time analyzing the investing universe via ETFs than looking through 100 stocks. But if that is your thing, or if you'd like me to provide consulting services for your portfolio, then the method is quite valid.