RENKO CHARTS

[leftyg]

For those willing to look at a longer time frame..here is a weekly renko chart of the MVV (2X long MID index). There is nothing shown but renko bricks..but what a story it tells:

1. Most importantly..what is happening in the now. The chart has made a white brick at the close Friday. That means that during last week, even though there were some big moves up and down from day to day..the net gain for the week filled a white brick, and reversed a multi-red-brick downtrend.

2. Is that white brick significant?? You'd better believe it..it puts an investor going long now in a high probability win situation. Look back to the left..all the way to over 3 years of data. Only once did a trend occur where not more than one white brick was filled before reversing downward again. Ironically, that was a week this past May-June..when only one white brick was made, and then the red trend continued. One
time out of more than 3 years.

3. Only a couple times was only two white bricks made before reversal back downward.........for the vast majority of the last 3+ years (all the time since the inception of the MVV, there have been healthy, profitable, trends both up and down.

It is probable that there was day-to-day volatility in both directions..but never, except as noted, did only one white reversal brick get filled at the end of the week..in other words, there were at least one subsequent brick filled, and usually several more.

So what does that mean to us?

1. If you would be satisfied with a an average of 45% annual return on your investment..that is what a simple trading plan that reversed positions between MVV and MZZ would have produced. If you were able to avoid the whipsaw in May-June of this year, the yield would be a little higher.

2. Now, I know this is not 1000% or 100%....but it is a darn good return, that if one could do each year on average, would build even a small amount into millions. Do a little math at your nest egg...and the number of years you have for it to grow...you may be surprised. Regards.

http://stockcharts.com/h-sc/ui