clester's Account Talk

[clester]

Probably 3-5% pullback.

Sounds very reasonable.

Just for those interested, my system keeps me at least 50% invested in bull markets (there are some exceptions). The reason I made that rule is because I have missed out on profits too many times in a bull market by trying to time exits an entries. The current rally is a good example. When do you buy back in. What if the pull back doesnt happen or it happens after another 10% rally and only pulls back 3%? Etc. I seemed to always time it wrong.

This way I won't miss out and I won't get burned in a pullback. It's sort of a win/win situation. It also keeps you're psyche level. You can claim victory either way. I know most people don't like the 50-50 trade but I do.

If i were out Would I buy 50% today? It would be a tough call. Scary to buy up here but I don't have any warning flags yet.

 

[jpcavin]

At the risk sounding stupid.......

I am trying to learn technicals and I'm unclear about something (I use google technicals for now..)

When you select different period for the RSI (i.e. 10, 14, 50 etc), you get different readings. Same with the MACD. What is the importance of those different periods?

I know that these are future indicators but I don't know how to apply what I see. Is it a projection of what is to come in 14 days? 50 days? Also, is it market days or calendar days?

I know that using RSI and SMA in combination is good. I understand the rules. I just don't understand how to use/apply the information/readings produced by the different time periods...

 

[craigerv]

At the risk sounding stupid.......

I am trying to learn technicals and I'm unclear about something (I use google technicals for now..)

When you select different period for the RSI (i.e. 10, 14, 50 etc), you get different readings. Same with the MACD. What is the importance of those different periods?

I know that these are future indicators but I don't know how to apply what I see. Is it a projection of what is to come in 14 days? 50 days? Also, is it market days or calendar days?

I know that using RSI and SMA in combination is good. I understand the rules. I just don't understand how to use/apply the information/readings produced by the different time periods...

RSI and SMA can be used as future indicators but they are based on the past. They simply operate on the previous performance data of a chart. The different values that you can input for RSI/SMA take into account longer/shorter periods in the past. For instance a value of 14 for RSI takes into account the previous 14 data points (hours, days, weeks). Same for moving averages. Some charts use common/default values, RSI is often 14, moving averages often use 50-day, 20-day, etc.... Much of this is historical precedent but allows you to compare with others interpretations. Stockcharts.com has a good chart school that explains the formulae used to calculate each and what they can be used for.

 

[jpcavin]

craig

I've looked at stockcharts and investopedia and I understand to some extend. There is still some missing pieces. For example...
Take the S&P with the following settings:
SMA: 10/25
RSI: 14
MACD: 12,26,9

Zoom in 1 month:
10d sma over 25d sma
RSI: 88.64
MACD Divergence: .22

Zoom in 3 months:
10d sma over 25 sma
RSI: 78.37
MACD Divergence: 4.2

Zoom in 1 year:
same as 3 month

Changing the RSI settings to 50d brings the readings down to 74.84/65.01 for 1 month and 3 month zoom...respectively.

This is what I am having a hard time with....the different results you get when you change the period settings and the zoom settings. I don't know what to make of the different results. Don't know how to process it or what to do with the information...

 

[jkenjohnson]

Sounds very reasonable.

Just for those interested, my system keeps me at least 50% invested in bull markets (there are some exceptions). The reason I made that rule is because I have missed out on profits too many times in a bull market by trying to time exits an entries. The current rally is a good example. When do you buy back in. What if the pull back doesnt happen or it happens after another 10% rally and only pulls back 3%? Etc. I seemed to always time it wrong.

This way I won't miss out and I won't get burned in a pullback. It's sort of a win/win situation. It also keeps you're psyche level. You can claim victory either way. I know most people don't like the 50-50 trade but I do.

If i were out Would I buy 50% today? It would be a tough call. Scary to buy up here but I don't have any warning flags yet.

Interesting input. I'll consider. Anyway I missed the deadline today, so I could not have gone in anyway. Also, 50% of my TSP is a BIG number (not bragging - I just hate to see large fluctuations in the account balance).

 

[clester]

Interesting input. I'll consider. Anyway I missed the deadline today, so I could not have gone in anyway. Also, 50% of my TSP is a BIG number (not bragging - I just hate to see large fluctuations in the account balance).

I understand. Just trying to explain my system. 50% of a big number will cause less fluctuations in balances than 100% . That's the reason I use it.

 

[jkenjohnson]

I understand. Just trying to explain my system. 50% of a big number will cause less fluctuations in balances than 100% . That's the reason I use it.

Don't get me wrong. Obviously you have a great system. I have 26 years in and I don't need to lose any money, so I tend to be over cautious. I am up 6% YTD (even though the autotracker says 2% - I don't even bother with it anymore) and have missed out on some great gains, but I felt comfortable making those trades.

 

[craigerv]

craig

I've looked at stockcharts and investopedia and I understand to some extend. There is still some missing pieces. For example...
Take the S&P with the following settings:
SMA: 10/25
RSI: 14
MACD: 12,26,9

Zoom in 1 month:
10d sma over 25d sma
RSI: 88.64
MACD Divergence: .22

Zoom in 3 months:
10d sma over 25 sma
RSI: 78.37
MACD Divergence: 4.2

Zoom in 1 year:
same as 3 month

Changing the RSI settings to 50d brings the readings down to 74.84/65.01 for 1 month and 3 month zoom...respectively.

This is what I am having a hard time with....the different results you get when you change the period settings and the zoom settings. I don't know what to make of the different results. Don't know how to process it or what to do with the information...

Ok, this is why I don't generally use google for my technicals. You have no way to determine how many periods google is showing. You can't tell if they're using days, weeks, hours, or something in between to display the chart. So if google is displaying an hourly price movement, say when you zoom in, then RSI is only calculating for the last 14 hours. If you then zoom out and google is showing you a weekly price movement, then RSI will be calculating the last 14 weeks worth of data points. They make sure to call it "periods" but since you don't know what period google is using, you don't know what their technicals are showing. I would suggest using a stockcharts. If you display a daily chart, then you know your RSI period is days. If you display a weekly chart, then you know your RSI period is weeks. The bottom line is you don't have control over the period that google charts displays, that is why your numbers are different when zooming in and out. Hope this helps!

 

[craigerv]

The bottom line is you don't have control over the period that google charts displays, that is why your numbers are different when zooming in and out. Hope this helps!

Just to be thorough, it appears that when you zoom in to a 1 month view, google is showing a 30 minute price movement. So if you put RSI: 14, you are only using the last 7 hours worth of data on a 30 min basis. It looks like the 3-month and 1-year views use a daily price movement. 5-year and higher use a weekly price movement.

 

[jpcavin]

Ok, this is why I don't generally use google for my technicals. You have no way to determine how many periods google is showing. You can't tell if they're using days, weeks, hours, or something in between to display the chart. So if google is displaying an hourly price movement, say when you zoom in, then RSI is only calculating for the last 14 hours. If you then zoom out and google is showing you a weekly price movement, then RSI will be calculating the last 14 weeks worth of data points. They make sure to call it "periods" but since you don't know what period google is using, you don't know what their technicals are showing. I would suggest using a stockcharts. If you display a daily chart, then you know your RSI period is days. If you display a weekly chart, then you know your RSI period is weeks. The bottom line is you don't have control over the period that google charts displays, that is why your numbers are different when zooming in and out. Hope this helps!

I was not aware of this info about google. Yes, it definitely helps. Will try to stick to stockcharts. I guess there's a reason why everyone else uses them. Thank you so much!

 

[clester]

I fund now has a warning from its RSI. It's over 71. C fund is at about 68, so it's getting close to overbought too. S fund is at 65.
This indicator is an overbought/oversold indicator. Over 70 is a caution and 80 is very overbought which would cause a 50% sell for me. I would need some confirmation like a break of trend.

So...I finally am getting some warnings. Nothing says sell yet though. Strong markets will go farther than you think.

 

[clester]

I fund now has a warning from its RSI. It's over 71. C fund is at about 68, so it's getting close to overbought too. S fund is at 65.
This indicator is an overbought/oversold indicator. Over 70 is a caution and 80 is very overbought which would cause a 50% sell for me. I would need some confirmation like a break of trend.

So...I finally am getting some warnings. Nothing says sell yet though. Strong markets will go farther than you think.

Fairly usual market this morning. Sell off a little and then climb back through the day. We could use a day or two down. That's a sign of a healthy market. Plus, it could attract dip buyers.

 

[clester]

Fairly usual market this morning. Sell off a little and then climb back through the day. We could use a day or two down. That's a sign of a healthy market. Plus, it could attract dip buyers.

The overbought readings came off yesterday. Warning fags are gone but a few good days and we're right back there. Ready to move higher again. The market continues its grind slowly up. We can stay overbought for a while and we could get to 80 on the RSI which is another 2-3% higher probably. At that point I will sell 50%.

 

[clester]

The overbought readings came off yesterday. Warning flags are gone but a few good days and we're right back there. Ready to move higher again. The market continues its grind slowly up. We can stay overbought for a while and we could get to 80 on the RSI which is another 2-3% higher probably. At that point I will sell 50%.

My spring rally thesis is holding up so far. I think we may get to very overbought conditions before a correction happens. To me that is a RSI about 80 or sentiment getting very positive. I still don't feel sentiment is too high and folks are getting forced into buying because they are getting left behind. This should hold the market up because dip buyers are chomping at the bit to get in.

I am getting a little nervous though. Emotionally, it feels to good to continue. I have to follow my system though. Those emotions are not what you should trade on though. Like I've said before, I have missed out on profits before by trying to time the top. I will let the top show up first then I'll get out.

 

[burrocrat]

The overbought readings came off yesterday. Warning fags are gone but a few good days and we're right back there. Ready to move higher again. The market continues its grind slowly up. We can stay overbought for a while and we could get to 80 on the RSI which is another 2-3% higher probably. At that point I will sell 50%.

i wonder if tom could run a spell check on that second sentence since we users can only edit our posts for a few minutes after we hit the send button.

 

[jpcavin]

What? And deprive everyone of warning fags?

 

[clester]

What? And deprive everyone of warning fags?

Not that there's anything wrong with that.

 

[jpcavin]

Not that there's anything wrong with that.

I wasn't implying that. Just being goofy. But perhaps it was politically incorrect so I apologize if I offended anyone.

 

[burrocrat]

i just found it confusing is all.

at first i was like, huh? they're gone? shoot, i didn't even know they was here. what were they trying to warn us about? and why does their sexual orientation have anything to do with it anyways?

it took me a while to figure it out.

 

[nnuut]

Oh, you Guys [and Gals]!:toung: