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Engineering Professor (EngProf6)

        Hybrid Timing Model for Analyzing Stocks and Indices

 

Date:  Thursday, November 16, 2006     (after the close) 

 

 ‘My Journey’ has been initiated. Click on the following link to get to see my account and trades. Find out what trades I am making and where the $5K is at.

               Click Here to Link to ‘My Journey’

 

Check out my mailbag for new postings (as of Nov 5)

For some reason people seemed to have stopped writing to me. I wonder why. Let me know if there is something I can do.

 

            You will find some interesting questions and comments. You may even find something you wrote. The Mailbag is located near the end of this web page.

 

I have now implemented version 4.0 with a filter. The tabulation of results in the tables are without the filter. The day to day comments are based on the results with the filter. Note that the number of moves in the tables (no filter – raw data) are reduced to as little as ¼ when the filter is implemented. In addition, I am also using hourly data to increase the resolution of my trading moves.

 

 

 

On Wednesday (Oct 18) I introduced version 4.0 with a filter. It is now Nov 16 and I still strongly believe “This is it”   (more than ever).

 

During the month of Oct I developed a firm hold on the modeling work I am conducting. The results you will see and which I will use on my journey are looking great. In addition, I have now successfully adapted the model to an hourly basis. This will make investing (on a short term basis) so much easier. You should note that there are 2 modes for a primary direction (i.e. move): 1) red – down, or 2) green – up. In addition, for each there is also the subsets of 1) turbulence or 2) clear trend. So there are a total of 4 possibilities. If we are in a primary up trend, we can be in ‘clear’ mode or ‘turbulence’ mode. The same applies for the primary down trend. The label turbulence is used to signify the presence of an opposing force that is trying to suppress the primary trend. 

 

I have reinstated the countdown. Several wrote to tell me that this feature is important. I agree. I had only taken it off for maintenance. The countdown can appear at 2 locations. If the trend is ‘clear’, then it appears on the top line with the primary trend. If the trend is being influenced by turbulence, then the countdown refers to the turbulent portion and is shown on the line with the turbulence label.

 

If you are new to this site, be patient, scroll down a couple of pages and you will find what the model is forecasting for the following 15 issues:

DIA, SPY, QQQQ, OIH, SMH, IWM, OEX, EWJ and XLF  {these are based on specific market averages} and,  AAPL, AKAM, ET, GOOG, STX and WMT

 

 

 

 

 

Check out the links at the bottom of this page.     

    

There are 2 classes of investors I would like to reach, in particular. If you are involved with options, you should consider what I have to say. You are in the first category. If you trade on the short term (a couple of weeks on average), then you are in the other category of investor I am interested in. I would like to hear the ideas and opinions from members of both categories.

 

One feature of my analysis is that I have a count down to a reversal for each entity. Thus, if we consider stock XYZ, my model tells you the current trend direction of the stock. Moreover, it tells you how many days remain before the current trend for XYZ reverses. This information can help you plan upcoming moves.

 

Some comments about technical models and how they perform as compiled by ‘tradingmarkets’. Click here.

 

 

 

                                         

 

          My Comments on the Markets

 

My Comments after Friday (November 10):

 

Before proceeding go up this web page and reread the comments I made a week ago Friday. Look at what the model said about the week just past. I had 3 positions going into the week. I did no trading at all this week. I started the week with $3.9K and finished the week with $5.9K. We had an election, we had oscillations, but in the end it was the model that prevailed. As time passes I get more confident, I get more encouraged, I get more determined.

 

Going into the week, I hold Nov contracts. All 3 positions are in spreads. I have 2 put spreads (bullish) and I call spread (bearish). I am coupling the hourly model with the daily model to refine my decision making process. You will note that I point out specific days (and even times of day). This is a result of using the hourly model.  My strategy for the upcoming week for my existing positions will be:

1)  Close out my position in QQQQ on Tuesday afternoon.

2)  Close out my position in OIH on Monday morning.

3)  Close out my AKAM position on Tuesday morning.

 

And what new positions do I plan on establishing? Here are the possibilities I have in mind:

1) Go short on AKAM on Tuesday morning.

2) Go long on QQQQ on Thursday.

3) Go long on AAPL on Thursday morning.

4) Go long on GOOG on Thursday.

5) Go long on OIH on Thursday.

 

All the above suggested positions will be filled with the appropriate spread strategies (credit type) based on December options. This is simply the plan I have formulated for the coming week. What I will actually do, you will see on a daily basis on this site. It is important to plan.

 

To my AKAM friends, you will note that I will be going short on AKAM. That’s the way life is. I don’t know what will happen – I do not predict the future. But, as traders we have two basic choices. Will AKAM go up or will it go down in the short term? At this time, the model has computed that even with the markets poised to move up, AKAM is pointing down. I like to mix my positions. Thus, I want to be long on most of my positions to align with the markets but I want to have a short to add balance.

 

On another point, I will update the tables with the ‘raw’ moves for selected issues only on weekends. I have just finished updating all of them. They are now up to date (until Nov 10).

 

My Comments after Monday (November 13):

 

For those who trade options, you know what I mean when I say “It’s not easy”. Today, I tried to get out of the OIH but I could not get the pricing right. The daily model for OIH has the reversal pinned to Wed evening. My other position in AKAM has to be closed on Tuesday. Unfortunately for me, the daily trend of down for AKAM took hold today. That’s life. My final position in QQQQ has done well. The spread is now out of the money. I will probably hold that position until the Friday expiration.

 

The markets are all pointing up and they continue to do so. That does not mean there will not be down days. You know as well as I do that to most, the market is unpredictable because of those days that muddle the waters. If we look at today’s action and focus on the issues for which I have generated results, you find that the model has AKAM, OIH and STX in primary down cycles, and you also find that today all 3 were down. Meanwhile, the markets were up.

 

In closing, I would like to thank Pantone and Beach on the AKAM board (Yahoo) for their very kind words. In addition, I would also like to recognize a poster on the AKAM board (Google) who made some interesting comments that made me think. The reply I wrote to him is interesting reading.

 

My Comments after Tuesday (November 14):

 

I have stopped posting the results of the hourly analyses. It is too much for me to handle and I imagine too confusing for readers. I will call upon the hourly results only when necessary.

 

Today, I made several trades that had the net result of flipping my long position in AKAM to a short position in AKAM. The stock was around $50 when my orders got executed. I still need to deal with OIH before Friday.

 

I noticed today that the GOOG board (on Google) now has a number of discussions on options. Some are talking about buying options that are way out of the money. Given the current upward move in GOOG, such a strategy looks appealing. But remember at some point GOOG will go down and when it does, most will suffer a thumping. So be careful and pay close attention to what you are doing. Options are a ‘very risky’ business. Enough preaching.

 

My Comments after Wednesday (November 15):

 

Shafted again. I had been trying to get out of my short in OIH for 2 days. My plan had been to get out Monday morning as I detailed on the weekend. I didn’t and OIH rallied strongly. I am now left holding the bag. The only positive is that the hourly model has OIH in a down trend for the next 2 days. Given my losses and the circumstances, I have no choice (in my mind) but to hold. Had I been able to follow the model by having my orders executed, I would have done very well. Such is life. Things could be worse.

 

My other position is the short in AKAM. That one is based on Dec contracts. It did well today. The other position in QQQQ Nov contracts is destined to close worthless (or maximum profit from my part).

 

With regards to the markets, they will move into turbulence in the next few days. As a result, I am reluctant to go long on my favorite investment issues like SPY. I am considering going short STX and long AAPL. My decisions will be timed with the hourly model. STX is a couple of days away. AAPL will go into a clear up trend on Monday, and based on the hourly model, it could be a buy on Tuesday. Naturally, this is preliminary and can change accordingly. Thus, I will let my OIH and QQQQ positions go until Friday expiration and then next week, I will take up the above new positions. Stay tuned.

 

My Comments after Thursday (November 16):

 

Wow. Look at what I said yesterday. There I was saying that I was “shafted again” because I was still short OIH. Well, OIH dropped a bundle today. Now mind you I had to liquidate early on, but I am pleased because I was given the opportunity to recover from several miss-steps I made this week. Remember, I was up against the wall because the contracts expire tomorrow. So at the end of the day my account was at $6K. The only position I now hold is the short on AKAM (December contracts). Tomorrow, I will not do anything because I can’t find something that is of interest at this time. Next week I have 2 possible shorts (STX and ET) and a long OIH.

 

The markets are now several days away from being hit by turbulence. They will remain in primary up cycles but they will be experiencing turbulence. The turbulence may dissipate and the up cycle reinstated or the turbulence may become a down cycle. I cannot tell at this point which it will be – it’s too early. However, I personally think that given some of this up action dates back to July and August, we are due for a respite. So, I think we will see a down cycle materialize in the next couple of weeks. Remember, I am only speculating. Let’s see what the model will tell us.

 

Good luck to all.

 

 

SPECIAL SECTION (under construction)

 

 (How To) Grow $5,000 into $1 Million, Quickly

 

See how my trading is taking shape – click the link below. Send me your feedback.

                Click Here to Link to My Journey’

 

Stay Tuned. You will get the opportunity to follow me as I embark on ‘my journey’ to grow $5 thousand dollars into One Million Dollars – Quickly.

 

The starting date was initially set for Oct. 1, 2006. However, given the revised version of the model (3.5) which I am trying to implement for all 15 issues, a more realistic starting point is Nov. 1. I will announce the starting date one week in advance.

 

 

 

I have decided to remove the next day outlook. It is too much work for me to write. It detracts from the analysis because you the reader do not see all the data. So, in an effort to simplify the presentation, I am going back to the way it was – only focused on the primary trend.  

 

You should note that the tables that follow for some of the issues will only be updated on weekends.

 

ETF                     Forecast

 

DIA        Primary Direction: UP   Started on   xx    Days Remaining: 4 

              Starting Price:   xx       Current Price:     123.36   

Clear Up Trend

Dow Industrials Fund (DIA) is in a primary UP cycle. Beyond this cycle, the model sees turbulence in the up cycle. Turbulence is that intermediate state that a cycle goes into when the issue tries to sort out how to proceed. The length of the current up cycle is 4 days.

CLICK HERE  --- to view the results for DIA as generated by the model (version 4.0) for 2006 

 

 

SPY       Primary Direction: UP   Started on   xx    Days Remaining: 4 

              Starting Price:   xx       Current Price:     140.40

Clear Up Trend

S&P 500 Fund (SPY) is in a primary UP cycle. The length of the cycle is now 4 days. However, after the clear up trend finishes, turbulence will take hold but SPY will still be in up mode. DIA is in an identical position. Stay tuned.

CLICK HERE  --- to view the results for SPY as generated by the model (version 4.0) for 2006  [New]

 

 

QQQQ  Primary Direction: UP   Started on   xx    Days Remaining: 2 

              Starting Price:     xx     Current Price:       44.30 

Clear Up Trend

NASDAQ 100 Fund (QQQQ) is in a primary UP cycle. After the 2 days remaining, there is turbulence at that point, but it will not be a reversal. Stay tuned.

                             CLICK HERE  --- to view the results for QQQQ as generated by the model (version 4.0) for 2006  [New]

 

 

OIH        Primary Direction: UP   Started on   Wednesday, November 15    Days Remaining: xx 

              Starting Price:     140.82     Current Price:       135.76 

Turbulence         Days Remaining:  1

Oil Services Holders (OIH) is in a primary UP cycle but for the next couple of days OIH is seeing turbulence. Yesterday I wrote: “The hourly model still has 2 days remaining on the down side. Thus, a good buying point should be Friday afternoon.” That was yesterday.

Today, Thursday, we have because of the steep decline, the up side signal by the hourly model has been pushed back by about 3 days. Stay tuned.

 Keep watching.

                             CLICK HERE  --- to view the results for OIH as generated by the model (version 4.0) for 2006  [New]

                                     

 

SMH      Stay Tuned.

 

 

IWM       Stay Tuned.

 

 

OEX      Primary Direction: UP   Started on   xx    Days Remaining: 5 

              Starting Price:     xx     Current Price:       651.06                

Clear Up Trend

The S&P 100 Index (OEX) is in a primary UP cycle. The length of the up cycle is now 5 days. That is in line with other market averages.

              CLICK HERE  --- to view the results for OEX as generated by the model (version 4.0) for 2006

                   

 

EWJ      Stay Tuned.

 

 

XLF       Stay Tuned.

 

 

       

                  

 

 

Stock                  Forecast

 

AAPL    Primary Direction: UP   Started on   xx    Days Remaining:  7

              Starting Price:  xx        Current Price:  85.61

Clear Up Trend

Apple Computer (AAPL) is in a primary UP cycle for the next 7 days. The turbulence, for now, is gone. You should note that AAPL resembles GOOG.

CLICK HERE  --- to view the results for AAPL as generated by the model (version 4.0) for 2006    [New]

 

AKAM   Primary Direction: DOWN   Started on   Thursday, Nov 9    Days Remaining: 13

Starting Price:  48.02        Current Price:  49.20           Loss:  1.18

Clear Down Trend

Akamai Technologies (AKAM) is now in a primary DOWN cycle. The cycle has 13 days of length at this time. When this down cycle started at the close last Thursday, AKAM had about 2 days of up side potential based on the hourly model. I was long AKAM and I held that position. When the hourly model reversed on Tuesday, I went short. Note that for the purpose of quantifying a move, I will use only the results based on the daily model. For trading purposes, I am coupling both the daily and hourly results.

CLICK HERE  --- to view the results for AKAM as generated by the model (version 4.0) for 2006  [New]

 

ET         Stay Tuned.

 

GOOG  Primary Direction: UP   Started on   xx    Days Remaining:  11 

              Starting Price:    xx        Current Price:    495.90  

               Clear Up Trend

Google (GOOG) is in a primary UP cycle according to version 4.0.  You should note that AAPL resembles GOOG and not vice versa. Stay tuned.

CLICK HERE  --- to view the results for GOOG as generated by the model (version 4.0) for 2006   

 

 

STX       Primary Direction: DOWN   Started on   Wednesday, November 1    Days Remaining:  xx 

              Starting Price:    22.26        Current Price:    25.34        Loss:  3.08

Turbulence          Days Remaining: 3

Seagate Technologies (STX) is in a primary DOWN cycle with turbulence for 3 days and then it will go into a primary down trend but with turbulence. On an hourly basis, STX is pointing up but should reverse in a couple of days. When it does, I may short STX. Stay tuned.

CLICK HERE  --- to view the results for STX as generated by the model (version 4.0) for 2006     [New]

 

 

WMT     Stay Tuned.

 

 

 

 

SPECIAL SECTION (under construction)

 

 (How To) Grow Your Wealth Quickly

and, after I complete my objective,

Anyone Can Make a Million Quickly

 

Introduction

I have invested over the years but I’ve had difficulty making a good return. In retrospect, I didn’t have the discipline or a model to be ‘successful’. All this changed when I started to use a model of price movements. It just so happens that I developed what I refer to as the hybrid timing model which evaluates cyclic price movements in the financial markets.

 

My past investment universe included stocks, options and futures. Again, in retrospect, I could not succeed because I was not able to get a handle on the time trends of the issues I was investing in. So about 7 years ago, I stopped my active investing strategy (except for a few buy and hold stocks). During this time, I fiddled with mathematics to try to get a handle on how short term moves occurred in the markets.

 

In early 2006 I came to the conclusion that the model I had developed was of sufficient accuracy to be of value in the short term investing arena. During the last 4 months I have been posting some of the real time results from the model on this web site. I am very pleased with the results. Recently, I started to invest (with real money) in some of the issues I follow (in particular, the market barometers). I started with stocks (or ETF’s) but I have now moved to options for my speculation funds.

 

My Target

I have set a target for myself. My objective is to convert $5,000 into 1 million dollars in 2 years. Hence, the title of my work: ‘Grow Your Wealth Quickly’. My plan is to use options to carry this out. My official starting point for this endeavor is Oct. 1, 2006 (revised to Nov. 1’06). I realize this is a lofty goal but I feel I am up to it. I will report my progress on this site. It will be one heck of a show, in real time. You will get to see with real money what can be accomplished with the model.

 

Methodology

Based on what I have learned, I have concluded that one needs to use options (or futures) to make money quickly (or to loose it quickly). One problem with the simple buying of call and put options is that this practice is a bit like buying lottery tickets. The odds are stacked against the buyer. Investing in stocks is much safer but too slow for accumulating wealth quickly. Thus, several conclusions I have made, regarding my speculative funds, are:

1)    I will not invest in stocks,

2)    I will invest in options,

3)    I will focus on credit option spreads.

 

So what are option spreads? Simply put, an option spread is a strategy (in its simplest form) that involves 2 calls (or 2 puts). The investor buys 1 call and sells short another call with a different strike price. For a credit spread, the investor sells a more valuable option and buys a cheaper option for a net credit to one’s account. This can be done with both calls and puts.

 

Examples of Credit Spreads

Let’s consider the SPY ETF that mirrors the S&P500. I am writing this on Sunday, July 30’06. Let’s consider the August 2006 contracts. Credit spreads can be created with calls if you think the trend is down. Credit spreads for an up market would be created with puts.

 

Consider the following credit spread involving calls (down SPY trend):

Buy:  August 129 SPY   @  $1.10

Sell:  August  127 SPY  @  $2.35

The cash SPY when these option prices were retrieved was $127.98.

In this case you would be credited with $1.25 (less commissions). The maximum loss that you can incur is $2.00. Thus, in initiating this spread, you would be required to deposit $0.75 which would be coupled with the $1.25 credit for a total of $2.00 (the maximum loss). The spread has an intrinsic value of $0.98. If by expiration (in 3 weeks), the SPY has dropped to 127 (or lower), you pocket the credit of $1.25 you received. If the SPY closes at expiration at 128, you get to keep $0.25 of the $1.25 credit. If SPY closes at $129 (or higher), you give back the $1.25 credit plus the $0.75 you deposited. The bottom line is that you are risking $0.75 to have it become anywhere from zero to $2.00. If you are good at identifying trends, you will be a winner.

 

Another credit spread involving calls of SPY is:

Buy:  August 130 SPY  @  $0.70

Sell:  August 128 SPY  @  $1.65

This spread would yield you a credit of $0.95. The intrinsic value of this spread is zero. You would risk $1.05 to enter this spread. If the SPY remains unchanged (or goes down) by expiration, you pocket the entire $0.95.

 

Why a credit spread and not a debit spread. My simple answer at this point is because of the eventuality that the market (SPY) reverses. Let’s assume the SPY has just entered a down trend. You decide to sell the Aug 127 at $2.35 and buy the Aug 129 at $1.10 for a credit of $1.25. The cash SPY is 128. Let’s further assume you were right with the trend and 2 weeks later the SPY is at 127 (a drop of 1). At that point in time, there may be an issue you will need to deal with. Expiration may (for arguments sake) be 1 or 2 weeks away. You need to go into a credit spread involving puts. So what does one do with the call spread. With regards to the calls you can close the spread completely or you may buy back the call you shorted (and hopefully you will be able to buy it with the funds you received as credit). If you only buy the call you shorted, you would be left holding the call you bought. If you are right about the reversal to the up side, that call will increase in price. At the same time, you would initialize a credit spread with puts.

 

Food For Thought

A $1,000 investment if doubled ten times in a row would be worth over 1 million dollars. Can it be done? Yes – maybe not 10 in a row, but… What you need is to have a good handle on the trend. I plan to do it. This is my Tour de France. Stay Tuned. Naturally, your comments are welcome.

 

To Be Continued….

 

                  

 

 

 

                                    MY MAILBAG

 

I have received some mail as of Nov 4 which I would like to share with you.

 

 

Message #1:

Header:    Read your site

Time:     October 22, 2006 1:11:54 AM

Text:

Have you ever tested your models with trading futures?  ES, ER, YM etc.?  The leverage that futures can give you could help with your journey.

 

My Reply to Message #1:

There is no doubt that the model can handle futures just like it can handle stocks and indices. I traded futures with a friend in the past (about 15 years or so ago). You are right. Futures are a nice way to use the model. And yes, I have not forgotten about doing so. The leverage is great. However, the catch is that you don’t know how much you can lose. Things can move a bit too fast versus options. In the future, I may get back into futures (like the S&P500), to some degree. But, I do worry about the ‘margin’ calls.

 

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Message #2:

Header:    Godspeed Professor!

Time:     October 22, 2006 2:16:09 PM

Text:

I just discovered your website and I looked it over carefully. I'm impressed with your knowledge of market trends and models.

 

I am a criminal justice professor at a rural university. I teach law courses as well as courses in the sociology of law. I have a few years of experience investing in stocks, then just five weeks ago I began trading options. I've turned $2500 into $9600 in that short time--thanks to the huge moves in Goldman Sachs and in Google.

 

As a professor myself, I do wonder how you manage to keep up with your university obligations-- namely publications. I'd much rather watch my stocks than write articles. I continue to enjoy teaching very much; nevertheless, I'd be happy to switch to a full-time job playing the stock market if I could find a reliable way to create a secure income.

 

I am thrilled to get to follow your journey as it commences. I wish you all the best, and I hope it leads you to a best seller!

 

My Reply to Message #2:

Your comments are well stated. Thanks for sharing them. Even though I am in engineering and not in a finance related field, I am using my engineering ‘skills’ and applying them to the markets. I don’t consider that I am straying too far from my profession. Regardless, there comes a point in time when one gets the urge to try something else. I really enjoy what I do but I (like you) also feel that I need to use my acquired knowledge to challenge the markets.

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Message #3:

Header:    Re: Ready for Nov 1st?

Time:     October 23, 2006 10:06:10 AM

Text:

Hi -- still don't know your name.  I have one question about how you will invest in spreads.  You would have to sell (short) a put or call

as part of the credit or debit spread, right?  To do that, you have to own the stock to sell the option against.  Do you own stock in another account?  If not, how will you write puts or calls?  Or.. am I misunderstanding and you will be writing "naked" options?  If so, I am out of luck because my broker won't let me do that.

 

My Reply to Message #3:

I have a broker that has the software to place debit and credit spread orders as one package. You enter a price for the spread. The order when executed is resolved into the constituents – i.e. this was bought at x and this was sold short at y. I do not use any stock as collateral. 

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Message #4:

Header:    5K to 1M Journey

Time:     October 23, 2006 10:20:43 PM

Text:

I happened to see your comments in the AAPL comments section in Google Financial and I'm glad I did.  I have been an Investools student since April of this year yet there is so much to learn.  I have been trading on paper since then and have grown 5K into about 8K which seems a little slow.  At this rate I could make more money in a fund of some kind and not worry too much about it.  But I have learned some valuable lessons from it without losing real cash like not trading against the trend so it is teaching me to become a better trader.  I am interested in what you are saying.  I have just begun to get interested in the index's and possibly in making my trades with those instead of stocks.  I wish you the best of luck in this endeavor and plan on watching your progress.  I'll be back to ask questions as they come up.  Talk about the little guy, I don't even have 5K of real cash yet though I am working on ways to make it in my spare time.  I can't wait to see what comes next.

 

My Reply to Message #4:

Many thanks for your message. I think you are going about investing in a good way. You need to trade on paper first. Trading is not easy. There are many obstacles besides getting the direction ‘correct’. Good luck.

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Message #5:

Header:    options

Time:     October 30, 2006 2:53:34 AM

Text:

my name i dave and i am like-minded in your quest. I have a loss of $3,500 in 2 months. my current balance is $550. I hold two call positions. 2 gop c 530 adj cost base 1.80 and

1 xba c 32.50 adj.cost base 0.85. I have a margin left over of $68. I have executed 52 trades and have missed some pretty lucrative positions on qxb c sept 27.50 and gop c sept 380 to the tune of some 30,000 dollars. I could'nt believe my ignorance and stupidity. But, hey, i guess hard knocks wake you up to reality. And I am in this game for the long haul. your website has peaked my interest in perfecting the right model and to make more winning moves. Please give me your take. I would be delighted to hear from you. I also have a gmail account.

 

My Reply to Message #5:

Hi Dave. Unfortunately, I do not know what you are referring to when you mention gop, xba etc..  Nonetheless, I certainly know the feeling of losing. I have had losing streaks in the past. In fact, it is the reason I began to apply mathematics to the field of investing. Realistically, we know that even the ‘professionals’ have a tough time outdoing the S&P500 for instance. Thus, beating the market is not an easy task. To do it, one needs to have a significant edge. I consider my model as the edge. However, I have not proven this to be the case. The future will tells us if I do have a significant edge or if I am another one of those dreamers. Stay tuned.

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Message #6:

Header:    Leading the way to $1 million

Time:     November 3, 2006 7:04:43 PM

Text:

I've been enjoying your site for a few weeks and have a question.

I don't think you've given any specifics about the mechanics of the hybrid timing model, exactly what info you're using, ie volume, high low, close, etc.

I think that's because it's "your magic" and you'll use it in your book or just keep it as proprietary.

Like you, I've invested for many years, but haven't had that spectacular of a return.  Over the last couple years, I've refined some entry and exit strategies based on simple technicals and have had some success.

I've been comparing my "very simple" technique to your entry and exit points and, of course, yours are much more accurate.

So my question is - are you interested in selling or renting your model to other investors to use on stocks you're not currently following.  Fortunately you're investing in AAPL and I'm grateful for that.

Best of luck on your goal.  We all certainly hope you'll succeed.

 

My Reply to Message #6:

Many thanks for your note. I enjoyed reading it. If you read my previous answer you will see that I have yet to prove myself and my model. What I will do in the future will depend on the outcome of my journey. At this time I have no plans for the future except to show that the little guy can play the game with the best of them and he/she can win.

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FORECASTING

 

Forecasting the markets is like forecasting the weather. Our knowledge base (I am referring to mankind) is such that the only reliable forecasts are short term. Long term forecasts for the weather or the markets are simply beyond our reach at this time.

 

Remember last year, the forecasters got caught up with the unusual number of hurricanes we were having. As a result their forecasts for 2006 were worrisome to say the least. We were told there would be as many and more. They weren’t forecasting, they were simply extrapolating. Now as we approach the 1 year anniversary of Katrina, we haven’t had any hurricanes to speak of.

 

Yes there is Ernesto on the horizon, but as I write this, he doesn’t know whether he should be a tropical storm or a hurricane. Try forecasting what will happen in the next 3 days. It’s not easy, even for the pros.

 

As I said, long term forecasting is beyond man’s capability at this time. Long term forecasting of the markets parallels that of forecasting the weather. It cannot be done with any degree of accuracy. It boils down to ‘A Random Walk Down Wall Street’. These are my personal views.

 

So what about short term forecasting? Well that is a different story. We can all agree that short term forecasting of the weather is a reality. It is within man’s grasp. Five or even ten day forecasts are generally quite accurate.

 

What I do is short term forecasting of the markets (without any detail). The model tracks the cyclic, short term trends and tells us what to look for. It assigns no magnitudes (not yet anyway). Remember, money management is equally important as the forecasting component. If you are careless and lose all your worth on a wrong move, then being right 80% of the time will amount to nothing. You need to be WISE. Good luck to all.

 

 

 

 

 

Announcement:

 

The following is an introduction as to what I am planning for the near future.

 

There are several reasons why I am publishing this web site. Two of them are: 1) to discipline myself when it comes to investing, and 2) to find a viable, winning strategy for investing in options. My unofficial name for this work is (How To) Grow Your Wealth Quickly. I will be using this heading more frequently in the future and it will be the title of a book I will write on the subject.

 

At this point, I am working on the ‘how to’ part of the program. I have already formulated a preliminary strategy which I am testing with my own money. The strategy is focused on options and more specifically the combination of buying credit spreads and the buying of straight calls and puts. I won’t say any more at this time besides stating that 90% of a winning strategy is centered on getting the direction of the move right. Given that the model can do this about 80% of the time, I am finding that being successful trading options is viable and is, indeed, quite profitable.

 

Soon, I will write more about my progress and my plans. Stay tuned.

 

 

 

 

Do you want to see past issues of this page? Click the link below.

 

                            Past Postings of This Page – Click Here

 

 

Questions, Comments, Suggestions or whatever else you may fancy 

are welcome. I can be reached at:

engprof6@hotmail.com

 

Please Note This Disclaimer:  The above results are generated from a mathematical model. It provides some insight into what may be expected in the short term (2 to 4 week cycles).  While reliability is of highest importance, life is such that the model is not always correct. Neither is past performance necessarily indicative of future performance. Stocks, markets, and options can change greatly in value in short time spans because of unpredictable events. The model cannot foresee such events. When they happen, the model’s performance will be poor and in some cases - wrong. The user is advised to be cautious and to try to couple the results for individual stocks to those for the market averages.

One last point I wish to emphasize. The accuracy of the model is also dependent on the entity that is analyzed. Some entities are more amenable to the type of analysis the hybrid timing engine performs. Others (especially those with elevated volatilities and/or irregular trading volumes) may not match the anticipated performance. It is up to you to satisfy yourself that the performance is adequate and to draw your own conclusions. 

 

 

 

          [[ Find Out About the Model – click ]]

 

                            [[ See Past Postings of This Page – Click ]]

 

 

                 Why Are There Events That Go AGAINST the Model? – Click Here

 

          Interpretation of Signals - Click Here.

 

                   Find Out What Timing Did For AAPL - Click Here

 

You may have noted that what I originally called a mathematical model is now called a hybrid timing engine. The term hybrid comes about because of the method of conducting the analyses. It combines several techniques into one package. The term engine refers to ‘computational’ engine – a terminology that is frequently used by researchers. Thus, the model will henceforth be referred to as the ‘hybrid timing engine’ or the ‘hybrid computation engine’.