JTH's Account Talk

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The DOW has broken above the 16,000 level so I'll hold off on the TZA buy today. I use Scottrade and have not had a problem getting any of my trades executed. You might want to consider looking for another company because the market can move fast when you need to execute any position.
 
Markets held up well today, tomorrow I get to find out if my 1833 red trendline is going to account for anything or if we just thrust up to 1850. Volume was at a 13 day low and the large caps lost some momentum (that could be a good thing showing the money is going into the small caps.) Best of trades...

View attachment 27186
 
Hey neighbor (Tracker), I'm right there near you. I'm playing with some levels for percent levels of being in stocks. I am beginning to feel more bullish with the angle of my ladder. We have been in a stronger buy in than I expected. I think we will hit a higher high but have no feeling if the trend will continue like last year. I was wondering at what level you were going to reengage or are you waiting for a pull back? By my proprietary lines (free guessing) I should be 75% in now. As always I and others enjoy your market sense.:D Spidey has no fear right now and that worries me.:blink: The bottom green line was the switch line I used to use. Stay 50% in is what I might do.
 
Bquat said:
Hey neighbor (Tracker), I'm right there near you. I'm playing with some levels for percent levels of being in stocks. I am beginning to feel more bullish with the angle of my ladder. We have been in a stronger buy in than I expected. I think we will hit a higher high but have no feeling if the trend will continue like last year. I was wondering at what level you were going to reengage or are you waiting for a pull back? By my proprietary lines (free guessing) I should be 75% in now. As always I and others enjoy your market sense.:D Spidey has no fear right now and that worries me.:blink: The bottom green line was the switch line I used to use. Stay 50% in is what I might do.
Click to expand...

I look at it like this, I caught 4.7% of a 6.5% move to the 1850 top, there is only .7% left to 1850, there's just not enough room for me to risk an IFT under these conditions. Considering I had made an entry 1 day before that terrible 1 February pullback, I consider myself fortunate to have held on to the trade and exited with 1% profit. I'm still outperforming the S&P 500 by 2.5% and have done this while being on the sidelines 19 of 32 days, I'd call that good performance (not as good as others) but a whole lot better than the majority.

For now, I'll sit this out, this is a light volume rally leading into a holiday, which is proceeded by seasonal weakness. I may entertain an entry after a decent selloff, or just jump in towards the end of the month.

View attachment 27204
 
Using Technical Analysis to estimate price valuation

Below is an example of how you can use 3 forms of technical analysis to estimate price valuation. When we tie these 3 methods together, we can forecast the potential price range and estimate if we should buy, hold or sell based on where prices fall within the forecast. The 3 methods used are Linear Regression, Fibonacci Levels and Parallel Price Channels.

For these estimates I chose hourly candlesticks over a 1-Month period. While there are roughly 156 hours in a 1-Month chart, I chose to use a 128-Hour Linear Regression Line because it moves a little bit faster within this timeframe and fits well within the TSP perspective. Everyone has there own preferences, the number does not matter as much as using the same numbers consistently when comparing charts with one another. I happen to have a preference for 8, 16, 32, 64, 128, 256 ect so I tend to use the number that best fits within the candlesticks I'm working with.

Using FreeStockCharts.Com I've added the 128 Linear Regression Line to the chart (the thick yellow line) this gives us the overall direction of price within this timeframe. Next, we identify the candlestick furthest away from the linear line. This is where price was most oversold/overbought, we can use this to determine the opposite direction needed for prices to equalize. Once we've identified this candlestick, we draw a yellow line from the the bottom (or top) of the candlestick to the linear line, this is at points A & B on the charts. After line AB is drawn, we then draw a line from B to C. This is the pivot-triangle, giving us 3 points of contact at ABC, creating the foundation from which the Fibonacci levels and Parallel Price Channels are drawn from.

Now that ABC is drawn, we extend out the green BC line with a white line, this gives us the bottom of the channel. Next we copy line BC and place it at point A, creating the AD line. Then we draw Fibonacci levels across the AB range (I've already removed them) and place a copy of the BC lines at the 38.2% & 61.8% levels, then remove the Fibonacci and identify those levels next to the parallel lines.

Wallah, now you have a LRFLPPC (Linear Regression Fibonacci Level Parallel Price Channel.)
- Each new candlestick moves the linear line thereby moving the channel. The shorter the timeframe, the shorter the forecast should be, in this case I've gone out to this Friday.
- The 61.8% to 100% channel is considered overbought or a sell, the closer we get to the top line the harder the sell.
- The 38.2% to 61.8% channel is considered in balance or equalized and is a hold, this is the sweet spot.
- The 0% to 38.2% channel is considered oversold or a buy, the closer we get to the bottom line the harder the buy.


For the S&P 500
- Prices are rising
- We are slightly oversold
- Lowest price forecast is rising from 1796 to 1822
- Highest price forecast is rising from 1854-1880
- A confirmed close below the bottom line changes the trend direction
View attachment 27218


For the Wilshire 4500
- Prices are rising
- We are slightly oversold
- Lowest price forecast is rising from 971-985
- Highest price forecast is rising from 1006-1020
- A confirmed close below the bottom line changes the trend direction
View attachment 27219


For the AGG (I don't like to put TA on AGG but thought I'd give you an example of a downtrend, so here it is)
- Prices are declining
- We are slightly overbought
- Highest price forecast is declining from 107.88-107.75
- Lowest price forecast is declining from 107.33-107.20
- A confirmed close above the top line changes the trend direction
View attachment 27220


To summarize:
- Add Linear Regression Line
- Draw line AB (furthest price distance to Linear Regression Line)
- Draw line BC and extend out (line B to furthest right of Linear Regression Line)
- Copy line BC and place at point A
- Draw Fibonacci Levels
- Copy line BC and place at the 38.2% & 61.8% levels

IF you click on FreeStockCharts.Com link it should take you to the S&P 500 chart I drew, from there you can play with it.

Take care...Jason
 
JTH said:
Did the link work, are the charts drawn in?
Click to expand...

yes, all those things are there but it's greek to me.

how much are you going to charge for the premium service?

if i promise to never complain and dance in my shorts can i get a free one year trial?
 
burrocrat said:
huh?

for us simple folk, could you please just say if the market is going to go up or going to go down?
Click to expand...

burrocrat said:
yes, all those things are there but it's greek to me.

how much are you going to charge for the premium service?

if i promise to never complain and dance in my shorts can i get a free one year trial?
Click to expand...

Ever the student, never the teacher for me. One day I'll be retired, with 4 screens and a decent trading platform to work with, that day could not come soon enough!
 
JTH said:
Using Technical Analysis to estimate price valuation

Below is an example of how you can use 3 forms of technical analysis to estimate price valuation. When we tie these 3 methods together, we can forecast the potential price range and estimate if we should buy, hold or sell based on where prices fall within the forecast. The 3 methods used are Linear Regression, Fibonacci Levels and Parallel Price Channels.

For these estimates I chose hourly candlesticks over a 1-Month period. While there are roughly 156 hours in a 1-Month chart, I chose to use a 128-Hour Linear Regression Line because it moves a little bit faster within this timeframe and fits well within the TSP perspective. Everyone has there own preferences, the number does not matter as much as using the same numbers consistently when comparing charts with one another. I happen to have a preference for 8, 16, 32, 64, 128, 256 ect so I tend to use the number that best fits within the candlesticks I'm working with.

Using FreeStockCharts.Com I've added the 128 Linear Regression Line to the chart (the thick yellow line) this gives us the overall direction of price within this timeframe. Next, we identify the candlestick furthest away from the linear line. This is where price was most oversold/overbought, we can use this to determine the opposite direction needed for prices to equalize. Once we've identified this candlestick, we draw a yellow line from the the bottom (or top) of the candlestick to the linear line, this is at points A & B on the charts. After line AB is drawn, we then draw a line from B to C. This is the pivot-triangle, giving us 3 points of contact at ABC, creating the foundation from which the Fibonacci levels and Parallel Price Channels are drawn from.

Now that ABC is drawn, we extend out the green BC line with a white line, this gives us the bottom of the channel. Next we copy line BC and place it at point A, creating the AD line. Then we draw Fibonacci levels across the AB range (I've already removed them) and place a copy of the BC lines at the 38.2% & 61.8% levels, then remove the Fibonacci and identify those levels next to the parallel lines.

Wallah, now you have a LRFLPPC (Linear Regression Fibonacci Level Parallel Price Channel.)
- Each new candlestick moves the linear line thereby moving the channel. The shorter the timeframe, the shorter the forecast should be, in this case I've gone out to this Friday.
- The 61.8% to 100% channel is considered overbought or a sell, the closer we get to the top line the harder the sell.
- The 38.2% to 61.8% channel is considered in balance or equalized and is a hold, this is the sweet spot.
- The 0% to 38.2% channel is considered oversold or a buy, the closer we get to the bottom line the harder the buy.


For the S&P 500
- Prices are rising
- We are slightly oversold
- Lowest price forecast is rising from 1796 to 1822
- Highest price forecast is rising from 1854-1880
- A confirmed close below the bottom line changes the trend direction
View attachment 27218


For the Wilshire 4500
- Prices are rising
- We are slightly oversold
- Lowest price forecast is rising from 971-985
- Highest price forecast is rising from 1006-1020
- A confirmed close below the bottom line changes the trend direction
View attachment 27219


For the AGG (I don't like to put TA on AGG but thought I'd give you an example of a downtrend, so here it is)
- Prices are declining
- We are slightly overbought
- Highest price forecast is declining from 107.88-107.75
- Lowest price forecast is declining from 107.33-107.20
- A confirmed close above the top line changes the trend direction
View attachment 27220


To summarize:
- Add Linear Regression Line
- Draw line AB (furthest price distance to Linear Regression Line)
- Draw line BC and extend out (line B to furthest right of Linear Regression Line)
- Copy line BC and place at point A
- Draw Fibonacci Levels
- Copy line BC and place at the 38.2% & 61.8% levels

IF you click on FreeStockCharts.Com link it should take you to the S&P 500 chart I drew, from there you can play with it.

Take care...Jason
Click to expand...
Hi Jason, Thank you so much for sharing this technical analysis!! Wow..it's great! Now when price is in the sell area do you choose to get out anywhere in that zone or just get out when it looks like it is turning down within that channel?
 
DreamboatAnnie said:
Hi Jason, Thank you so much for sharing this technical analysis!! Wow..it's great! Now when price is in the sell area do you choose to get out anywhere in that zone or just get out when it looks like it is turning down within that channel?
Click to expand...

Thank you. Within the realm of TSP that's a tough question to answer, it is dependent on your entry, your IFT status, where price is within the channel and the point-width of the channel. Let's estimate the current price is 1838 and look at the percentages in relation to the Fib-Channel levels. If you had a bad entry @ 1838, then you're risk is weighted to the downside (the downside potential weighs more than the upside potential.)

1838 to 100% @ 1850 is 1.03%
1838 to 61.8% @ 1832 is -.16%
1838 to 38.2% @ 1818 is -.92%
1838 to 0% @ 1796 is -2.28%

Conversely, if you had a better entry you'd have more room to accept more risk. The trick is to sell just before the buyers are exhausted and to buy just before the sellers are exhausted. This isn't easy to do within the confines of TSP, but if you keep an eye out for spikes in volume, watch for overbought/oversold conditions on the bollinger bands, channels and Fibonacci levels and do this across the major indexes, it can at the very least keep you out of trouble. :suspicious:
 
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