imported post
bkrownd wrote:
So, where is the math? I'm getting more interested in the details of what's actually going on the longer I read about it.
This will get you started if your interested in playing trends and trading ranges.
http://stockcharts.com/education/
If you just want to be an investor I personnel like Bob Brinker. I get his Marketimer and his On Demand Service.
http://www.bobbrinker.com/
Want to be a trend trader bkrownd? Want to learn the math? Greg does it pretty good!
The Market Listener Trading System - My trading system is the result of years of mistakes. I have reviewed lots of newsletters and gurus who have attempted to give their subscribers advance notice of coming market trends and cycles. For this and many other reasons, I always seem to be zigging when I should be zagging. After what has been literally years of research into cycles, Elliott Waves, and many other systems, I have learned that
my own trading style is best handled by avoiding the "art" of prediction at all costs!!! When I looked at moving averages for indication of trend direction, it seemed that they too were always 180 degrees out of phase with what I should have done. My conclusion, after many losses and frustration, is that I needed to let the market tell me what it wanted to do. In particular, I wanted
to follow the trend, which is your friend, until the market whispered, or shouted to me that it wanted to change directions. And then, I found that Stochastics and Rate of Change indicators help me go to cash until the trend reverses or continues. Thats how my trend following system & its cash management variable developed. I trade Rydex Venture and Velocity funds by which I can go short (x2) or long (x2) the NDX (Nasdaq 100 Index). I hope my newsletter and its insights can give you an education on alternative investment strategies. You might find your own technique or modify mine.
http://www.safehaven.com/archive-173.htm
About the Author: Gregory Miller is a registered Professional Engineer (PE) in the State of Texas. He has been involved in electrical engineering and projects in the U.S. and some far-flung regions of the world. Greg has studied the markets for decades and enjoys applying his analytical abilities and computer number crunching to the science of investing. He is currently self-employed as an engineering consultant and forensic engineer. You can see more about his forensic work at
http://www.forensicPE.com.
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Greg currently has a sell signal in place using his modeling. The proof is in the gains.[/align]
Greg's current comments.
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Watch for our weekly report on http://www.SafeHaven.com by Saturday morning.
Market Comments -Thursday's Nasdaq Action (10:30PM CT)
We are having a good week inspite of the NDX rally on Thursday. The Dow, SPX and OEXclosed flat, NYSE down, NDX and Composite closed up strongly. Is the Nasdaq tech leading us into a rally? If so, it is likely only short-lived and probably not a tradable rally. The big safe moneyseems to beworried about the next couple of months. All indices have collapsed below the 200 day moving averages. Wall Street technicians, if they haven't beenfired yet, are flashing warning signs to their corporatemoney managersthat the peak may be behind us and we will likely stair-step down from here until non-energy PE's begin to move toward a ratio that is more in line with 2006 earnings and reduced consumer expectations.
On Friday we getsome economic numbers includingCPI, Retail Sales, Capacity Utilization, Industrial Production, prelim Mich. Consumer Sentiment. These could be market movers, but which way? We don't care. If the market rallies on BAD news tomorrow, we should consider that as a bullish sign and expectthat rally will havea lower high than the last rally. We will watch our stop level and hope that the mini-rally does not take us out of our short position. Worst case for Friday is that we get another 0.5% down day on the SPX to end the week.
Trend followers must wait for the next trend to develop and not try to pick the bottom here. There is not indication yet that the downtrend is broken. And there is great danger that we might try and predict that the bottom is in and miss the greatest capitulation sell-off since 1987!!! Unlikely, but this is how trend-trading makes its big money. Trend traders are nearly always on the correct side of the big moves.
The slope looks very slick! Chances are we are going to make some more money withthe currentSell signal.
Current Signal: Sell (100%) (SELL for short-term traders and SELL for longer-term mutual fund investors who have trading restrictions.)
Volume: Heavy (to the downside) The volumecontinues to be heavy on the NYSE.
Sentiment:VIX and CPC aregrowing morefearful. The CPC is at levels where we MUST see aSLIGHT BOUNCE or a MAJOR SELL-OFF. VIX is rising steadily, but has not reached theblow-off peak in conjunction with a capitulation sell-off. If we rally from here, then there is a good chance that the amount of latent optimism still present in the market willdelay and perhaps amplifythe capitulation that we have hoped for while in our Sell mode.
Trading Model (Using SPXand NDX): SELL signal.In our weekly modelthe Stochastic has not yet gone to oversold. This factor and the rolling down of our MACD to just below the zero line tells us that the selling is not finished for the extendedtrend leg. A pop of 2% here should be expected, but should not reverse our Sell signal since our stop is set at +2.5% above Thursday's close.
Looking at SPX- The Nasdaq exuberance today seemed to be without basis technically when compared to the SPX. The S&P 500 closed up off of its lows for the day, but has done nothing to break the massive downtrend of the last seven days. An examination of the speed of this downtrend in SPXmay be telling us that there will likely be more sideways to lower action. Only the Nasdaq 100 and Composite seem anxious to reverse the bearishness.
Our stop has been revised down slightly to 1572.ForFRIDAY, and unless revised ina future email or the weekend report, let's set our stop/exit level at 1572 on NDX.
Fault Tolerant Cash Safety Stop/Exit:If the NDX rallies above 1572ona dailyclose, I will exitthe RYVNXand go to completely 100%to cash before the close of that day (Today and until revised).
Have fun reading, and enjoy!
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