Engineering Professor (EngProf6) ©
Hybrid Timing Model for Analyzing Stocks and Indices ©
Date:
Friday, October 10, 2008 (after the close)
Find out during the
day on this new page an update
of the Nasdaq 100 Index (NDX) and the S&P 500 (SPX). The support I have
received (as of Nov. 24’08) and the positive feedback has been more than I
would have imagined. Thanks to all and enjoy.
Please Note: I have
decided to suspend updating this page for the near term. However, I am updating
the Nasdaq 100 Index on new page.
If you are following AAPL or GOOG then you should be checking out what NDX is
up to. And if you are following the S&P 500, then the NDX is also for you.
The correlation between the two is very high. I update the other page
throughout the day. Enjoy and good luck.
About This Web Site:
This site focuses
on predicting the short term trends of 2 market indices (S&P 500, and
Nasdaq 100) and 2 stocks (AAPL, and GOOG). Below you will find ‘graphic’ trend
maps that show the overall daily trend (5 past days and 5 future days). I also showed
the trends based on half hour data. These trends are presented for the past 2
days and for the coming day, however, I have removed them for now. The graphics
are found by scrolling down a bit. They show you where we have been and, more
importantly, where we are going. I am impressed at how accurate they are
proving to be (and yes I developed the algorithms they are based on). Learn to
read them – they may help you make better trading decisions. I will use these
graphics to start My Journey at the beginning of December as I try to convert
$5K into 1 million. If you have comments or suggestions, please drop me a line.
My Thoughts About
Friday:
The model is looking for a rebound
for SPX, NDX and GOOG similar to what AAPL did today. They are all pointing up
and have been doing so for the last week. However, up moves have been few and
far between. Hopefully we will see some up action this week. Meanwhile, I am
focused on the half hour model. It has done very well.
The
‘new page’ has become quite a success. Many of you are looking at it as far as
I can tell. Do you have any comments. Many thanks to those who have emailed me.
I answer what I can. Good luck to all.
Given
that I focus on the overall (call it daily) trend, I tabulated the graphics for
the past 5 days. Immediately below you can see the 5 snapshots that were
generated for the overall graphics of both the SPX (first column) and the NDX
(second column).
No graphics for
Thursday, Oct. 9
About
My Work
If you scroll down a few
lines you will see the graphics as posted on this page. You can also download a
copy of the PowerPoint file that generated the graphics.
Please Note: I have created a link that accesses my Power Point File which contains the graphics. I will post this everyday.
I am working on developing an algorithm that couples with the model and carries out complete investment decisions. In the end, I would like to develop a mechanical system that contains enough rules to literally decide on when to trade and at what price. Stay tuned. Best to all and thanks for your messages.
Power Point File of Today's Graphics (Click Here)
Power Point File of Thursday (July 3) Graphics for all 6 Issues (Click Here)
COMBINED MODEL (Daily/Half-Hour):
Choose one of the following links to branch directly to it:
1) Why Is EngProf6 Doing This? (Last Updated: Nov 10’07) ©
2) Acknowledgements (Last Updated: Nov 10’07) ©
3) A New Beginning (Last Updated: Jan 7’08) ©
4) Yes We Can (The Model) (Last Updated: Feb 24’08) ©
5) Instructions for Reading the Individual Graphics (Last Updated: Mar 27’07) ©
6) Summary of Moves Starting in March
2008
(Last
Updated: Mar 3’08) ©
7) (How To) Grow Your Wealth Quickly (Last Updated: Nov 10’07) ©
8) Disclaimer (Last Updated: Nov 10’07) ©
Thanks to those who asked that I make changes. As you can see, I have listened and I have done ‘something’. Your comments are always appreciated – especially if they are constructive. I will update the various pages as time permits me.
Questions, Comments, Suggestions or whatever else you may fancy are welcome. I can be reached at:
engprof6@hotmail.com
This site is copyright protected. No portion can be reproduced in whole or in part without the consent of engprof6. Moreover, the name engprof6 (or direct references to it) is protected by copyright law. Those individuals making slanderous statements that may be construed as libelous, irrespective of whether they reference engprof6 directly or if they show the intent of doing so, may become the subject of legal recourse.
©
PAST POSTS (The Comments I Have Made):
Thursday, October
9,2008
A Special Note (Friday
morning):
The market volatility –
no the market collapse has made it difficult to do well. The one thing which
I’ve noted has been that the half hour model has been on top of the action. It
has tracked the movements very nicely. But the question is how to trade with
it. I don’t have the answer except to once again point at futures.
I did not update this
page on Thursday evening but I did update the ‘new page’ which allows one to
see the evolution of a move in the NDX. For those who are wondering where we
stand, the daily model sees green for the next week, once we get out of the
initial red on Friday morning that has cascaded from Thursday. Needless to say
the market is extremely oversold. Good luck
There was one good thing about
today. The moves were limited to plus or minus 200 as opposed to 500. Let’s
hope we survive to fight another day. Enough rhetoric, let’s look at the
markets. Today at 1:00 pm we had the combined model reverse to the upside. I
call it the combined model but in fact it is the combined graphic that shows
the results of the 2 models. The regular readers know it is for NDX. The others
have just been informed. Today’s 1:00 pm reversal was a reasonable call by the
model. As of 3 pm it actually looked quite good. But then the wheels fell off
and the market tanked once again. It did so in the last hour. So what does the
model say. For SPX, AAPL and GOOG you can decide for yourself. I will focus on
the NDX.
The NDX is in up mode (started on
Wed at 1 pm). This up trend will continue until the combined model finds a
reversal. As we go into Thursday we have red on the top row but not on the
bottom row. So the up trend remains intact.
Today marked the first day I posted
a new page that allows you to see the evolution of moves during the day. Given
my schedule I cannot tell you when I will post during the day, however, I will
do so as often as I can and/or is warranted. Even though I’ve only had the
combined graphic for one day, I am pleased with it. The key to success is to
have a strategy and to have discipline. While I tell you that these are
necessities, I have until now failed to some degree to master that aspect. But
I continue and sooner or later I will get it right. Good luck to all and don’t
forget the other page (the link is at the top of this page).
---------------------------------------
Tuesday, October
7,2008
Just when I thought things couldn’t
get worse, they didn’t get worse – they got MUCH worse. Another terrible day.
Even the model scrambled to get things straight. Let me focus on NDX (or if you
like QQQQ). Both AAPL and GOOG are in the NDX (Nasdaq 100 Index). And as for
the SPX, it is moving with the NDX (in the current market environment).
Yesterday at the close there was green that appeared at 4 pm (i.e. market
close). Because of the way the model is set up that green carried into today
(Tuesday) until 10:30 am when new data was entered. At 10:30 am the model went
from the green that originated at 4:00 pm Monday to red. The next analysis at
1:30 pm also generated red. And then at 4 pm the model generated green. The
green is for tomorrow morning (9:30-10:30 time slot). At 10:30 am tomorrow (Wednesday)
I will generate the color that will fill the 10:30 to 1:30 pm slice. In the
meantime, I am also running an equivalent half hour model for NDX.
My biggest problem has been how to
apply the results from the model (strategy) and not the model itself. I have
worked hard to develop the model. It has taken me years. I am happy with it. If
I am failing, I am to blame. And the primary reason is not getting a good hold
on how to get into positions and how to get out of positions, or if you like
when to act – to be decisive. I think that part of the blame lies in how I
present the data. To that end I would like to try an experiment. I want to try
something with NDX whereby I couple the data together on the same graphic and I
use an improved time scale.
My first attempt is shown in one of
the graphics below. The upper portion of the combined graphic is the half hour
data and the lower portion is the ‘daily’ data (even if it isn’t really daily
data, I have chosen to call it that). When you look at the graphic, you see
both models starting with green. The green in the first slice of the daily
model comes from the close on Monday. At 10:30 am the daily model reversed to
red. Meanwhile, the half hour model stayed with green until 11:30 am when it
too went red. At this point one would sell because the 2 are aligned. At the
top of this page is a link where I will update the NDX graphic throughout the
day. This is an experiment. And I hope the new graphic format helps us to
better execute the moves.
---------------------------------------
Monday, October 6,2008
Just say to yourself – This is a bad
dream. Today was another nightmare. But you know that. So let’s analyze what
happened. Let me start by recalling what I said on the weekend. I was expecting
that this morning (Monday) we would reverse to the upside. On Friday at the
close all large arrows were red but a reversal to the upside at 10:30 am
(Monday) was a possibility if the market held its own. We know that because the
model had the 10:30 am slice as green. To arrive at that, the model assumed a
flat price between Friday’s close and 10:30 today. What a joke. By 10:30 the
market had tanked and was even lower than what we had later on at the close.
Obviously, the model painted the 10:30 am slice as red and then it also painted
the 1:30 pm slice as red. But, as for the 4 pm slice, it was painted green.
So the S&P 500 and the Nasdaq
100 both reversed at the close today. A word of caution, that last green slice
will only be official (i.e. cannot be changed) once we have the 10:30 am slice
completed and it confirms the green status. Nonetheless, as I said on the
weekend, there is green directly ahead, so be brave and hang in. And come back
soon.
---------------------------------------
Friday, October 3,2008
Today was a one day wonder. As we
saw yesterday (Thursday) we were looking to the upside for Friday. And up went
until lunch time. Then, by the 1:30 pm slice we were reversed to the down side.
A ‘one slice wonder’. This is a very rare occurrence. But, it happened today.
And in the process we saw a 400 point swing. What a week this has been. So the
House passed the rescue bill and we get slammed. Why? I don’t know.
The half hour model picked up the
reversal at lunch time. But I (and you) don’t use the half hour model.
Meanwhile the daily model reversed at the 1:30 pm slice but the reversal (I saw
it happen) was projected to be short – like over by Monday. So I did nothing –
in all fairness it would have been difficult to react. It all happened to
quickly. Anyway, life must go on. Let’s look at Monday.
The good news is that this down
draft is ‘artificial’. What I mean is that we may be pointing up again Monday
morning. The slide in prices we saw on Friday afternoon was not expected. It
came from nowhere. The model has written it off and it sees a resumption of the
up trend on Monday. I haven’t mentioned any specific issue because all 4 are
similar. They all experienced the ‘one day wonder’ on Friday and they are all
looking to jump back into up mode. I will not be surprised if next week is a
strong up week. Hang in there. Good luck and come back soon.
---------------------------------------
Thursday, October
2,2008
I missed a day and it ends up being
a big one (350 points – down). Again the model was right on. Look at SPX and
NDX for the last 5 days. You find last Friday (Sept 26) and Monday as red and
then Tuesday and Wed (Oct 1) were green and then Thursday was red. This
distribution is what the model saw last weekend. I’m impressed. What is your
view? I would be interested to hear it.
So what now? Things are looking up.
You can see the red extending into the start of Friday but as the regular
readers know the red will move to the left if the market is showing strength or
it may move a bit to the right with a weak market. So to get some additional
insight I look at the half hour model (13 one-half hour slices make up one
day). And it has green for the entire day - Friday with the first green being
the 10 am slice. So assuming a reasonable open (flat or better) we are going
into 3 days of green. That will be followed by 1 day of red and then green
again. Thus, for the near term I am now optimistic. I get the feeling that a
positive House vote is what is being reflected in the data. Or maybe it’s just
the market cycle showing its head. Regardless, the market is now looking good
until Wednesday. Enjoy. You deserve it.
And finally a word about AAPL and
GOOG. They are similar to the markets. They too are looking to turn positive
for the next 3 days or so. AAPL has red across the future window, excluding the
first slice. And that first slice can easily become green as can the last real
slice (i.e. the last slice – 4pm of Thursday). Remember, the last real slice is
not nailed down until the next real data comes in.
---------------------------------------
Tuesday, September
30,2008
On Friday, September 19’08 I wrote
the following which you can find if you scroll the page and which I have cut
and pasted here.:
This was a memorable week. It was crazy. It was wild. It was
unpredictable. It was all of the above. Last January I wrote a piece about “A
New Beginning”. It is link #3 below. At that time I referred to Barack Obama as
the next President. I still think it will happen. I meant it then and I mean it
now. But on Thursday Sept 11’08 I entered ‘A New Beginning – Part 2’. For those
following Obama, you too will probably have noted that he too has had ‘a new
beginning – part 2’. And today a week
later I feel really good. I feel confident. I am back on track and I’m focused
on investing in options (no more futures for me at this stage). Yesterday, I
told you I have formulated a trading strategy. It involves the outright buying
of options, the selling of credit spreads and the buying of calendar spreads.
Bear with me as I try to get to $10K so that I can restart My Journey.
Guess what. Today (Monday) I closed
at $10.1K. I am thrilled. My situation changed when 1) I gave up on futures,
and 2) I made a serious effort not to second guess the model and 3) to use
options and option spreads.
Now let’s get to the market. Today’s
rally has caused the model to bring in red on Thursday and Friday. This is true
for all 4 issues. The problem I have with Wednesday is that the half hour model
for NDX has it all red. Assuming that’s the case, the rally of Tuesday will
reverse itself for the next couple of days. So you have to be very careful.
This is a very volatile market – there are many margin calls – there is much
liquidation. Don’t let one day cloud your perspective. Personally, I think the
rest of this week will be negative. This is simply my view. Time will tell and
tomorrow evening I will revise my opinion as warranted.
Yesterday I wrote: “And finally stay
calm, stay tuned and keep your head up high. I see a lot of sun shining into
this tunnel. Come back soon.” It all holds today. Good luck.
---------------------------------------
Monday, September
29,2008
Today was wild. We went into Monday
with the 10:30 am slice (Monday) as red. That was the case for all 4 issues
(S&P 500, Nasdaq 100, AAPL and GOOG). At the start of trading it looked bad
for all 4 issues. By 10:30 am the model had pushed the reversals to the end of
the day. Then 2:00 pm came along and we had an additional 400 point drop in 5
minutes (as I was told). That pushed the reversal (the green) the model was
anticipating for Monday into Tuesday. So now we are looking at mid-day (as
early as 10:30 am) on Tuesday. Again this assumes a flat market. One should
note that the reversal will happen sooner if the market stabilizes early or it
goes up a bit.
Do not despair because there is a
high probability that a reversal to the upside will happen tomorrow (Tuesday).
And this statement applies to all 4 issues. So if you are looking at AAPL or
GOOG, this is a good starting point. It also looks like the reversal to the up
side will be fairly decent in size.
For those who noticed on the
weekend, I am including in the graphics the results from the half-hour model
for NDX. At this time, I want to point out that the half hour model is
secondary, relative to the daily model. What I have learned is that it should
only be used to fine tune between 2 slices of the daily model. Let’s consider
an example. Assume it is 10:30 am and the current slice is red but the 1:30 pm
slice is green. So one would be looking to reverse in what amounts to 3 hours.
The half hour model would then be used to fine tune the trading point within
the 3 hour window. It has taken me months to come up with this simple
formulation.
And finally stay calm, stay tuned
and keep your head up high. I see a lot of sun shining into this tunnel. Come
back soon.
---------------------------------------
Friday, September
26,2008
This was quite a week. It had its
downs and a bit of ups. From the S&P 500 and the Nasdaq 100, we can look at
the graphics and see how it played out. What is amazing is that the SPX and the
NDX graphics for 10 days (5 past days and 5 future days) are identical.
If we look at the past week we see
that Monday and Tuesday were both red. And then Wednesday and Thursday were
green. Finally, Friday was red. As we go into next week we have green for
almost 3 days. And then for Thursday and Friday we have red again. You may wish
to watch how the past window was populated on a day by day basis during this
past week. It was something to behold. Good luck to all and come back soon.
On a personal note, I will go long
the QQQQ on Monday as the model reverses to the up side. But I use both the
daily model and the half hour model to time my entry and exit points. From what
I can see I will reverse to the up side later on in the day (as a guess, the
last hour) but I will see what the half hour model says as the day progresses.
After posting this page I decided
that given I told you I also use the half hour model to time my QQQQ trades, I
would post the results of the half hour model for the NDX (or if you like
QQQQ). So, as you can see when you scroll down that the half hour model follows
the daily model. But remember the future window is computed assuming a flat
price projection. So, for example, if Monday morning NDX is going down, the red
slices will tend to move to the left and if NDX is up, then the green will tend
to spread to the right.
---------------------------------------
Thursday, September
25,2008
This is amazing. What is amazing,
you ask? Why, the model (of course). We are in a situation where there is
turmoil – there is chaos. While the markets have trended down, we have had both
ups and downs. Last week was surreal. We had 4 days with gains and losses of
400 points or so on each day. We had 2 of each. Now look at this week. We lost
500 points on Monday and Tuesday and then on Thursday gained back 200 points.
And a lot of this trading seems to be irrational. So I am pleased with myself
because I have survived the meltdown of 2008 (and I hope you have too). In
fact, I have done quite well. Today I got out of a futures position that I
should not have been in. That’s my last futures trade for the foreseeable
future.
As we close on Thursday we leave
behind 2 days of green and go into red. On a personal note I am only trading
QQQQ (the Nasdaq 100 or NDX if you like). I am buying calls and puts, I am
using credit spreads on both and I am also using calendar spreads. I am happy
with the way things are going. I use the half hour model to fine tune entry and
exit points that the daily model computes.
So if you consider NDX you will see
that there is a red slice tomorrow morning (Fri. at 10:30 am – the first
slice). That calculation is based on a flat price projection for Friday. If the
market is down Friday morning, the model can reverse the last slice on Thursday
from green to red. The latest slice is always in play. But I digress because I
also track the NDX on a half hour basis. And today (Thursday) the half hour
model went into red mode around lunch time. At that time I went long puts for
Oct. So as we end Thursday I hold 84 contracts. 27 are short calls and another
27 are long calls. The remaining 30 are long puts. Enough about me – when I get
to 10K, I will start My Journey and share my trades with you.
Back to the markets. The model is
tracking them better than I thought it could. My problem has been that I have
tried to outguess it too often. That has got me in trouble on a number of
occasions. So I have spent a lot of time fighting fires I started.
As I write this I have noticed that
the futures (Thursday night) are showing sizable losses (over 1%) as we head
into Friday. At this point, things are not looking good for the market on
Friday. I have it as red (started Thursday afternoon) and the futures are also
red. Before I close, I want to stress that the markets now appear to be cycling
with a half cycle of 2 days. Thus, you see 2 days of red and then 2 of green
etc.. There is much volatility, instability, uncertainty and fear. The bottom
line – be careful. Stay tuned and come back soon.
---------------------------------------
Tuesday, September
23,2008
So where do we stand. First let’s
review the last 2 days. Both Monday and Tuesday were red. The model told us on
the weekend that there was ‘red’ coming. Now it is Tuesday evening. The Dow has
gone down over 500 points in the first 2 days. If you look at the graphics for
SPX and NDX you can see that all of Monday and Tuesday were red. Now what? Some
green is directly in front of us. As early as tomorrow morning. And because of
the way the last slice is computed, it is possible that the last slice on
Tuesday could be converted to green if there is a good start by 10:30 am on
Wednesday. I have computed what is required at the 10:30 am slice of Wednesday
to cause the 4:00 pm slice of Tuesday to be converted to green from the red you
see below. So here is what I found. For the SPX a price of 1201 or more will
cause the last slice of Tuesday to become green. For NDX the value is 1663. For
AAPL the price is 129.80. And for GOOG, it needs to be above $431.50 at 10:30
am to cause the start of the up trend to be pegged to the last slice on
Tuesday.
Once we reverse to green we will
have a couple of days of green and then a bit of red (Friday/Monday window).
And then some green again. That’s the bottom line. Stay tuned and good luck.
---------------------------------------
Monday, September
22,2008
Another one (i.e. day) bites the
dust. This is crazy and I’m convinced it is ruining a few people. I’m not going
to go on. I think we are becoming emotionally drained. So let’s move on to the
markets and what the model sees.
On the weekend I said all the 4
issues were about to turn red. And that they did this morning (Monday). What
followed was another ravaging of the markets. So how did the model take the
drop. It cut back on the red in the future window. When you look at the 4
graphics you find that there is green now showing up on Tuesday. This means
that the market now places the path of least resistance to the up side. Note
there are a couple of red slices (on Tuesday morning) that need to be dealt with
first.
What’s the bottom line? For short
term players a stabilization in prices Tuesday morning will signal the start of
a short term recovery. The length is unknown but as a guess it should take us
to Thursday. Stay tuned and good luck.
---------------------------------------
Friday, September
19,2008
This was a memorable week. It was
crazy. It was wild. It was unpredictable. It was all of the above. Last January
I wrote a piece about “A New Beginning”. It is link #3 below. At that time I
referred to Barack Obama as the next President. I still think it will happen. I
meant it then and I mean it now. But on Thursday Sept 11’08 I entered ‘A New
Beginning – Part 2’. For those following Obama, you too will probably have
noted that he too has had ‘a new beginning – part 2’. And today a week later I feel really good. I
feel confident. I am back on track and I’m focused on investing in options (no
more futures for me at this stage). Yesterday, I told you I have formulated a
trading strategy. It involves the outright buying of options, the selling of
credit spreads and the buying of calendar spreads. Bear with me as I try to get
to $10K so that I can restart My Journey.
Now let’s look at the markets for
the coming week. Unfortunately, as of the close on Friday and after a large
move up on Friday (and Thursday) the cyclical capabilities of the model are
kicking in and what do we have? Look at the graphics below. We have red
starting on Monday. And for 3 of the 4 issues (SPX, NDX and AAPL) it extends
for the week. GOOG is similar but has a bit of green in between. I want to
caution however that this scenario is based on using the current prices in the
model. Things may change as actual data comes in. Look at what happened when
the Friday data came in.
On a personal note, I will be going
short the QQQQ (buying puts and selling credit call spreads) sometime on
Monday. And when the model reverses back to the up side, I will convert the
puts to credit spreads (put based) and go net call options. I am inspired. Stay
Tuned. Come back soon. And Good Luck. Remember to keep you head high even if
new storm clouds appear. Because they will be followed by sunshine …
Before I sign off you may want to
look at the ‘past’ window. Look at all 4 issues. The past window (comprises 5
days) tells you what happened last week. Given the kind of week it was it is a
worthwhile exercise. Consider SPX. Monday was red, the latter half of Tuesday
then went green. On Wednesday we were red until the end and then Thursday and
Friday were green. Of the 15 slices last week for SPX, we had 6 red slices and
9 green slices. So last week was, on a time basis, more green than red. For
next week we have (at this time) 1 green and 14 red. Now please note that this
view will be modified each day to reflect real data as it comes in.
For NDX last week we had 9 red and 6
green. So NDX was more negative last week than the S&P 500. When we look at
next week we find 1 green and 14 red (like we found for SPX). This is not the
best of news. And what about AAPL. It had 7 red and 8 green last week. So it
was between SPX and NDX in performance. For the future window, it has 1 green
and 14 red. That is consistent with SPX and NDX.
And for GOOG, last week it went with
the markets (as did AAPL). We had 8 red and 7 green which is just between AAPL
and NDX. For the future window it has 11 red and 4 green slices.
---------------------------------------
Thursday, September
18,2008
What a day. I’ve been saying this
all week long. It has been wild. And maybe it will continue to be wild.
Yesterday (Wed evening) I said that all 4 issues were about to reverse to the
upside. They did. They had their future windows populated with green slices. So
now all 4 are pointing up but the future window is now a mix of green and red.
In fact, all 4 issues look very similar. They all have green for Friday. Then
on Monday at some point they will go into some red for 1 or 2 days. This is
followed by a bit of green and in a couple of cases we can see a slice of red
at the extreme right. So it looks like today’s large move will bring us more
volatility. It was too large. We need to have some consistency. This week has
been a mess. These last 2 days have been spooky. Down 450 followed by up 410.
Remember, the model has cyclical capabilities. That’s why we are seeing what we
are.
As an aside, I want you to know that
I kicked the futures habit last Thursday (Sept. 11). I am only trading options.
Even with these wild markets, I have done well. But even better – I have
formulated my trading strategy. (Remember, I have traded options for a ‘long’
time). I am pleased with the way things are going. Obviously, the markets leave
a lot to be desired but I not only survived the week, I did well. Had I been in
the futures game, I may have been ‘wiped out’ with these crazy intraday moves.
There may have been margin calls. Options is definitely the way to go. BUT you
need a strategy. Simply buying calls and puts (only) will not work. For now I
will not disclose my strategy. I will eventually do so when the time is right.
And finally I want to remind you that the main driver for the trading strategy
is the model. Good luck and come back soon.
---------------------------------------
Wednesday, September
17,2008
What a day. What a week. Let’s focus
on the future. Obviously, this is a volatile situation and no model can handle
the anxiety. But sooner or later things will calm down. When? I don’t know. Let
me try to cheer you up. Things are now looking better. All 4 issues are about
to reverse to the upside. AAPL is looking at the 2nd slice and the
other 3 issues at the 3rd slice.
So we may see all 4 issues pointing
up sometime tomorrow. Given the critical juncture we are at, I looked at the
model to see if I could determine what price is required to have the model
reverse to the upside at 10:30 am (first slice).
For SPX it closed today (Wed) at
1156.4. If at 10:30 am SPX is 1160 or higher, the first slice will become
green.
For NDX it closed today at 1632.5.
If at 10:30 am NDX is 1649 or higher, the first slice will become green.
For AAPL it closed at $127.83. If at
10:30 am AAPL is at $128.50 or more, the first slice will become green.
For GOOG it closed at $414.49. If at
10:30 am, GOOG is at $426.70 or more, the first slice will become green.
So hang in. Don’t despair. Things
will get better. Good luck.
---------------------------------------
Tuesday, September
16,2008
After Monday’s ‘disaster’ the model
was looking for a reversal to the upside on Tuesday. We got it today. The markets
closed up. But on Thursday there is red coming back in. However, there will be
green 1 or 2 days after that. So the volatility persists. Unfortunately, at
this time the key word is uncertainty.
What about GOOG I was asked. GOOG
became green on Tuesday morning. It goes back to red by mid-day Wed and that
persists for a few days. One of these days GOOG will go down. The model seems
to be fixated on GOOG going down for a few days. And finally AAPL is now
looking good. It turned around at the 1:30 pm slice on Tuesday and the green
continues. Good luck to all. And come back soon.
---------------------------------------
Monday, September
15,2008
What a day! You don’t need to hear
it again. Did I see it coming? Did the model? No, we don’t predict the future.
But I had 3 of the 4 issues reversing Monday morning. I was short today the
QQQQ with an option spread. I went short Friday afternoon based on the half
hour model which anticipated a red trend today (but not 500 points). Anyway,
that’s not the point. I am glad I have left futures. I was always worried about
large moves that can wipe one out at the blink of an eye. So I am back into
options and feeling good. And there is so much more strategy one can plan.
So what about the markets? Look at
the graphics below and you may find some ‘good’ news. Take NDX as an example.
Yesterday, I had red across the future window. Today (Monday) it is mostly
green. However, we need to get by tomorrow (Tuesday) morning. Both NDX and SPX
look the same. And AAPL looks similar to NDX. You should note that the model
put AAPL in the red at the first slice on Monday. But on Tuesday it is looking
to reverse to green.
The final issue is GOOG. It’s ‘red’
continues. It is interesting because today GOOG did much better than the market.
Now the model is looking for the market to do better than GOOG.
---------------------------------------
Friday, September
12,2008
Look at NDX and GOOG. They both have
red in the future window. So for the time being – the trend is about to reverse
to the down side for the Nasdaq 100 and GOOG. They are identical. As for AAPL,
it is the opposite. Its future window is green. As a guess this has probably to
do with the fact that AAPL has taken a beating while GOOG has struggled back
up. Remember the model is not linear although it will handle a linear situation
if that’s what it is. The model has cyclical capabilities. You can see this
with the data for AAPL and GOOG. Essentially we have the model saying that AAPL
has gone down too much and is due for a bounce. Meanwhile GOOG has recovered a
fair amount and will tend to give back some of the gains. Now, remember and
this is important, my comments are for the next ‘few’ days. They are not
relevant for 2 weeks from now.
The last issue is SPX (S&P 500).
It comprises a combination of red and green. Directly ahead we have some red
and then a couple of days of green and then red. And finally, let me reiterate,
the color does NOT represent the price change even in the past window. The
color represents the trend. Good luck and come back soon.
But before I sign off, I want you to
compare AAPL and GOOG during the last few days. Here is what we had for GOOG
from the model:
|
Date |
Action |
Price |
|
Wednesday,
Sept. 3 |
Sell |
$468.51 |
|
Tuesday,
Sept. 9 |
Buy |
$424.40 |
|
Monday,
Sept. 15 |
Sell |
??? |
And here is what we had for AAPL
from the model:
|
Date |
Action |
Price |
|
Tuesday,
Sept. 9 |
Sell |
$158.22 |
|
Wednesday,
Sept. 10 |
Buy |
$151.96 |
|
Wednesday,
Sept. 10 |
Sell |
$151.61 |
|
Thursday,
Sept. 11 |
Buy |
$147.91 |
|
Monday,
Sept. 15 |
Remains a Buy |
(148.94) |
Note above, GOOG became a buy on
Sept. 9 at a price of $424.40. On Friday, it closed at $437.66. The model is now
looking to sell GOOG on Monday. Meanwhile, AAPL became a sell on Sept. 9 at a
price of $158.22. And then on Thursday, Sept 11 it became a buy at 147.91. On
Friday AAPL closed at 148.94. So now the model is looking for AAPL to continue
to move up (or at least hold its own) and GOOG to go down (or hold its own).
---------------------------------------
Thursday, September
11,2008
Today’s (Thursday) rally has caused
the model to introduce a fair amount of red in the future window. Yes that’s
correct. The fact that the market was up today takes away from the potential of
the upcoming days. The NDX had a nice run up. Yesterday, the entire future
window was green. Today, 4 out of 5 days are red. Read the following paragraphs
to find out more. The same applies to GOOG. Meanwhile, SPX and AAPL are similar
in their own right.
Let me explain a bit about the
model. The key feature is that it has cyclical capabilities. This means that it
leads as opposed to the typical mathematical model which follows the market. When
someone says they are looking at a moving average, then that individual is
following a trend. If that stock has been going down then the model will
continue to have it going down. Let’s consider GOOG as an example. Wednesday
evening I wrote:
And finally, I want to address several emails that
asked about the green and red for AAPL and GOOG. The colors represent trends –
they do not represent actual moves. The real closing prices are shown so you
can see what happened to the prices. Look at GOOG below. We have 3 red boxes
and the prices shown go from $450 to $419. Then we have 2 green boxes and GOOG
went from 419 to 414. Both these days GOOG price was down but the model has the
boxes as green. The green signifies that the trend was green (up) and that the
trend continues into the future. It allows us to visualize the moves. The model
is accurate more than 90% of the time. So when GOOG reverses to the down side
its price will be at least $419. Anyway, again for clarification, the colors
have nothing to do with the actual daily changes.
Notice that the model had painted
GOOG green on Tuesday and Wednesday and it had green for the future days.
However, it was clear that as we started Tuesday GOOG was going down. That’s
one of the differences between my model and your typical ‘linear’ model. And
yes a model that uses exponential moving averages is also linear (or if you
like a first order model).
And here is one last point about the
model and how I use it. When I show the color of the future days, the calculations
have assumed that the last actual closing price populates the entire future
window. In reality that will NOT be the case. So when you look at the future
window, keep this in mind. Suppose we have 5 green days in the future window
and then we have a large up move, you will find that the model may react by
reducing the amount of green that is upcoming. The impressive feature of the
model is its ability to stay with a trend (and sometimes lead it). Good luck
and come back soon.
---------------------------------------
Wednesday, September
10,2008
Let me go out on the limb. The
markets are starting to stabilize. Today (Wed) we did not see it because the
trading data shows instability and volatility. However, I am making the
statement based on my model. It is showing a fair amount of green in the coming
days. But when you look at the past days you see a lot of flip flopping between
green and red. So I am somewhat positive in the short term.
What about the separate issues? We
have GOOG still looking good (5 green future days). Don’t let today’s down move
fool you (or distract you). And AAPL is now similar to GOOG.
As for NDX, it too is seeing green
but there is red coming in a few days. And SPX has green in the future window
with 1 ½ days of red (Mon & Tues). So stay tuned and good luck.
And finally, I want to address
several emails that asked about the green and red for AAPL and GOOG. The colors
represent trends – they do not represent actual moves. The real closing prices
are shown so you can see what happened to the prices. Look at GOOG below. We
have 3 red boxes and the prices shown go from $450 to $419. Then we have 2
green boxes and GOOG went from 419 to 414. Both these days GOOG price was down
but the model has the boxes as green. The green signifies that the trend was
green (up) and that the trend continues into the future. It allows us to
visualize the moves. The model is accurate more than 90% of the time. So when
GOOG reverses to the down side its price will be at least $419. Anyway, again
for clarification, the colors have nothing to do with the actual daily changes.
Thanks for your comments.
---------------------------------------
Tuesday, September
9,2008
Things are bad. Is there good news?
I hope so. When you look at the graphics below you see that GOOG was green all
day today. The other 3 issues were mostly red. Let’s look at the 4 issues one
at a time.
The NDX should reverse to the up
side Wed. morning. And so should AAPL. GOOG, as I stated is already green. That
leaves us with SPX. It should reverse Wed. afternoon.
---------------------------------------
Monday, September
8,2008
Monday was something. I saw little
of it but an examination of the trading after the close made my jaw drop. I am going
to refrain from commenting. We started the day with all 4 issues in the green.
However, GOOG was green only by one slice and since the last slice is not
nailed down, the trading in GOOG by 10:30 am changed Friday’s last slice to
red.
At the close on Monday, NDX, AAPL
and GOOG will look similar. They all have green for the next week. SPX is
looking more volatile (some red and some green). I guess Monday’s trading is
partly responsible. Stay tuned and good luck and watch that volatility.
---------------------------------------
Friday, September
5,2008
Once again, the model was right on.
It reversed all 4 issues at the second slice (1:30 pm) on Friday. That was
welcome relief. The model now has all 4 issues pointing up. Moreover, all 4
issues have all their 5 ‘future’ days painted green. This outcome of having all
the future boxes painted one color (green or red) does not happen often. So I
am pleased and I look forward to next week which should be a good week for the
longs. On a personal level I went from being long 3 contracts to being long
only one contract of NDX. I was forced to liquidate (at these low prices)
because of a margin call. I’m now at about 4K. But I’ve actually become quite
optimistic. Why? One reason is because I really enjoy the model. It has now
earned my complete confidence. So I have diverted my energy from the model and
am putting it on my trading performance. But… I’ve rediscovered that futures
can be ‘deadly’ because of margin calls. I was forced to liquidate 2 of my 3
contracts for big losses at a time when the model is now pointing up. My losses
were based on 3 contracts but my gains (let’s assume there will be some) will
be based on 1 contract. So this is a big issue in my mind.
The other problem I have is that if
the markets had a melt down one can lose a lot more than one has in the
account. So if something dramatic happened you could go from +5K in your
account to -5K (yes minus) and you would have to pay this. That is OK with 5K
but what about if it’s plus a million versus minus a million. I can’t deal with
that. This issue coupled with the wild volatility has me rethinking what I’ve
been doing. Guess what. I am back focusing on options. I’ve traded options
extensively so I am up to the challenge.
The trading of options can be much
more exciting because there are so many strategies (especially those that
include credit spreads). And you cannot lose more than you have (at least in
theory). The other point is that you are not put in the position of closing out
positions at low prices like happened to me. Anyway, I’ve said this in the
past, success is achievable but it requires a viable trading strategy. At this
time I don’t think I have what it takes to succeed with futures. Do I have it
for trading options? I don’t know but I am about to find out. My target is to
go from 4K to 10K by December. At that time I will start My Journey and post my
trades as I reach for the million.
I guess it is human nature that
major events in our lives have the ability to change us. Look at 9/11 or oil
etc.. Thursday opened my eyes as to how I am trading. And I do not like what I
see. So to succeed I will need to modify my trading strategy. I think that my
modified trading strategy will focus on options. Stay tuned. Good luck and come
back soon.
---------------------------------------
Thursday, September
4,2008
How do I start? Let me confess –
there is no BS here. Yesterday, I was at about 8K and today I am looking at 4K.
Ouch. What happened? First of all I have no one or nothing to blame but myself.
If you read what I wrote on Tuesday and on Wednesday you will see that around
the close on Tuesday I went long 3 contracts of the Nasdaq 100 (NDX). As an
aside a reader pointed out that I wrote ‘short’ instead of long. That was a
mistake, I went long. Why?
Because I used the half hour model
to jump the gun. And then on Wednesday NDX did not reverse to the upside (it
stayed red) and I ignored both the daily model and the half hour model. Again,
because all I could see was the green. If you recall the driving analogy, I was
starring too far ahead and not paying attention to what was directly ahead. And
guess what – I hit an ice patch. The car went out of control. I smashed the car
and broke a leg. Otherwise, I am fine. It will take me some time to recover
from this accident. And yes I consider what happened to me today an accident
because it should not have happened. I should have been paying attention. I
should have been short and, of course, I should have liquidated my long
position – at the latest – this morning (Thurs.). I did none of the above.
I continued to hold the bag (of 3
contracts). In fact, I held all 3 contracts into after hours. And NDX dropped
some more. I sold one contract and still hold 2 contracts. Meanwhile, I have a
margin call. I will not put any money into this account so on Friday morning I
will need to sell one contact to balance the margin call. I will stay long the
other contact. Why am I doing this? Because the model has a reversal to the
upside for 10:30 am tomorrow morning. I know you have heard this before but the
odds at this time certainly favor a reversal – or am I whistling in the wind.
On another note, I forgot about stop
losses. I ignored my own rules. I went against the model. I guess I deserve to
be shafted. In all fairness, I have a pretty good idea why I blew it. I had 2
models showing red and I sat and waited for the green to come. Well it never
did. Enough complaining.
What do we have now? We have a lot
of green and we have it for all 4 issues. So things are looking good. BUT to
get to the green we have to get by tomorrow (Friday) morning. Because at the
close on Thursday all the ‘big’ arrows are pointing down. I have run the model
for all 4 issues to see how much we need at 10:30 am to make the first slice
green. Here are the results:
For NDX it closed on Thursday at
1774.8. For NDX to turn green at 10:30 am on Friday it needs to be above 1773.
If it is lower, the reversal will be delayed.
For SPX it closed on Thursday at 1236.8.
For it to reverse at 10:30 am on Friday, SPX needs to be above 1236. Otherwise,
the reversal to the up side will be delayed.
As for AAPL, it closed at 161.22. It
is set to reverse at 1:30 pm. However, if at 10:30 am it is above $162, the
upside reversal will move up to the 10:30 slice.
And, finally for GOOG it closed at
$450.26. It is set to reverse at 10:30 am if it can be at $450 or higher at
10:30 am otherwise, the reversal will be delayed to the next slice or beyond.
So as I sign off, I have learned one
heck of a lesson today. It’s put me back months, but I will do my best to come
out of this stronger and wiser than ever. I imagine there are many of you who
also suffered today. I wish you well and I urge you to take a deep breath and
get back in the game. The market is wild. We all need to be vigilant and to
stay alert. I wish I had done so. Good luck.
---------------------------------------
Wednesday, September
3,2008
Wasn’t Tuesday something! Yes! And
wasn’t Wednesday something! This market is treacherous. Yesterday I jumped a
bit ahead of the model and today I paid the price. NDX was down today. I went
short at 1852 and today it closed at 1835. But I have confidence in the
model. However, because NDX was going
down today, the model held off on the anticipated reversal at 10:30 am and has
now pinned the reversal on the 10:30 slice but for Thursday! After that the
model still sees 5 days of green. So I expect to exit this trade on the
positive side of the fence (i.e. above 1852!). On another note, AAPL did
reverse at the 10:30 slice today (Wednesday) and it has the next 5 days also as
green.
As for SPX, it reversed today at
1:30 pm and as to the future 5 days, it has 4 days of green and 1 of red. With
regards to GOOG, there is a lot of volatility. I’ll let you decide what to make
of it. Good luck. Come back soon. And keep your eye on the Nasdaq 100 because
it will recover in the coming days. I anticipate that the model will reverse it
to the upside on Thursday morning.
---------------------------------------
Tuesday, September
2,2008
Wasn’t Tuesday something! I went
short the S&P 500 at the ‘absurd’ level of 1284 near the close on
Wednesday. I was looking to get out today (Tuesday). The model had SPX as red
but it also had a reversal to the up side by the close on Tuesday. During
Monday night, SPX shot up to 1300. The Dow was up 200 points. I checked the
model – it still maintained the red. Moreover, it continued to look for a
reversal to the upside at the 3rd slice (i.e. 4 pm). Meanwhile, the
market started to go down. By the end of the day, the reversal was pushed to
Wednesday at 1:30 pm. I closed my short position after the market close at
1276. Incidentally, the futures trade 23 ¼ hours a day.
Let me explain why I closed the
short position. The half hour model had both SPX and NDX reversing to the up
side at 3:30 pm Tuesday. So I closed the short SPX and went long the NDX (the
Nasdaq 100 futures). As to AAPL and GOOG, they are both following in the
footsteps of the NDX. This means that they are reversing to the up side. Their
reversals were delayed today. Take a good look at the graphics. They hold the
key.
---------------------------------------
Friday, August 29,2008
Indecision and volatility – that’s
what we have. I’ve been telling you this for some time. I see it in the
graphics I generate. If you are a new reader, let me tell you that I generate
graphics (scroll down to see them) for 4 issues: 1) SPX (the S&P 500), 2)
NDX (the Nasdaq 100, e.g. QQQQ), 3) AAPL and 4) GOOG.
The model is doing very well as it
navigates the treacherous market waters we are in. Friday was a bad market day.
The model had anticipated it. Meanwhile, Thursday was a good day and again the
model was on top of the action. Now let’s look at the future for the 4 issues.
Let me start with NDX (Nasdaq 100). From the graphics, we see that NDX went red
on the 3rd slice on Thursday, Aug. 28. The 3 slices represent the
times: 10:30 am, 1:30 pm and 4:00 pm. So NDX went negative at 4 pm Thursday.
The model maintained the red on Friday and it is holding the red in place for
most of Tuesday. However, note the 3rd slice is green. So for now
the model sees NDX returning to green on Tuesday. Moreover, the model sees
green for the rest of the week. With regards to AAPL, it is looking very
similar to NDX. So AAPL will shed its red on Tuesday and go green. Now
remember, the forecast for Tuesday is based on not having a sharp drop at the
beginning of the day. The reversal to the upside is pinned to the 1:30 pm
slice. I have analyzed the results and found that the reversal will move to the
4:00 pm slice if AAPL is slightly lower at 169 (closed Friday at 169.53). And
if on Tuesday morning AAPL is below 168, the reversal moves to Wednesday
morning. Get the idea – there is a lot of instability. But, all things being
equal, AAPL will reverse to the upside.
For the SPX, it too is looking to go
green late Tuesday. However, the reversal will be less ‘powerful’ than that of
NDX. I guess the reasoning is that NDX has dropped more than SPX – but that is
just a guess. And what about GOOG. It is being sucked into the market down
draft. At the close on Thursday I thought Friday would be green however when
the model started using the read data on Friday GOOG went red. But on Tuesday,
it too will go green. So the bottom line is that Tuesday all 4 issues should
reverse back into green territory (for a couple of days anyway).
Remember, the model has cyclical
capabilities. It anticipates reversals. It doesn’t follow a trend. It takes the
lead ahead of the trend. Look at Friday, we were down 170 points but yet the
model was looking at the upside. Meanwhile, many other models are not capable
of doing this. As a final point, I want to thank several readers who have
posted some mention of my work on discussion forums. Whenever that happens, I
get some emails with questions. As I told one reader, my work is not really for
a long term investor. It’s more for traders and option players. So if you want
to add a bit of clarity to your view keep reading this site on a regular basis.
What my model does is the equivalent
of what you do when you drive. Your car shows the future and the past. Looking
at the back window you can see what you went through. And when you look at the
front window you see what you are up against. But there may be unknown
surprises ( a squirrel running into the road…). The view is relatively short –
a block or 2. That’s how the model works. It looks at the front window and says
– things are looking good or perhaps – things are looking bad. But keep in
mind, the view is limited. The model does not have access to a helicopter or a
satellite to give you a bigger picture. (Let me know if you have found someone
who has one.) But, like the driving analogy – the model can do very well if you
keep your eye on the road (i.e. market). Good luck and come back soon.
---------------------------------------
Thursday, August
28,2008
At the close on Wed. we had all 4
issues still pointing up. Then, on Thursday morning the markets opened strong
and some reversals like that for SPX were delayed. By the close on Thursday 2
issues had reversed to the down side. They are NDX and AAPL. NDX reversed at
the 4:00 pm slice while AAPL at the 1:30 pm slice. As for the other 2 issues,
GOOG remains green - a reversal today was not anticipated and it did not
happen.
The last issue is SPX and it is the
one I am trading. SPX was looking to go red today but it did not happen. It is
now looking at the 10:30 am Friday slice to reverse to the down side. If it
does, it will join NDX and AAPL. The holdout for now is GOOG.
As a final note, you may have
noticed that the model was right about AAPL and GOOG. Of late the model has
been positive on GOOG and negative on AAPL and today – that’s how things worked
out. Good luck and come back soon.
---------------------------------------
Wednesday, August
27,2008
It is too late for me to write much
(2 am). I updated the graphics at airports. You will note that SPX and NDX are
now aligned. The future windows for the 2 are identical (as of the close on
Wednesday). We have had a couple of days of green. And now we are looking to
have a couple of days of red and then a couple of days of green. As I’ve said
for the last while, we have indecision.
AAPL is now similar to the indices.
The next couple of days are red (like the markets). And finally what about
GOOG. Good news. After its decline of the last few days, GOOG is looking to go
back up. The future window is all green. Good luck and come back soon.
---------------------------------------
Tuesday, August
26,2008
Today (Tuesday) the markets
performed as the model had said. In the afternoon the SPX and NDX became green.
I went long the SPX at around 2:30 pm and by the close my $8K was at $8.4K. I
am pleased. I am sticking to the script (model).
The 4 issues all reversed this
afternoon. They are all pointing up at the close on Tuesday. And that includes
GOOG. It reversed to the upside at the close (even with its sizable loss). As
I’ve stated in the past, I also use the half hour model to fine tune the
beginning and the end of a move. You can’t see that data, but I think the daily
data (3 slices: at 10:30 am, 1:30 pm and 4:00 pm) is sufficient to do well.
As a final point, I want to mention
that the future window shows a lot of indecision. We have green and red mixed
up together. Unfortunately, the markets are volatile – they make navigating
them difficult. But, I am really impressed at how well the model is tracking
this volatility. I am determined to follow the script that the model is
writing. Good luck to all. And come back soon. If you scroll down a bit you
will find all the commentaries I have written in 2008.
---------------------------------------
Monday, August 25,2008
First of all, let me start by stating
that today my account closed out at 8K. And I have no position at day’s end.
This afternoon I closed my short (based on the half hour model). Enough already
– let’s get to the results. We went into Monday with all 4 issues pointing
down. The half hour model put them in the red on Friday afternoon and then this
morning (Monday) they were all made red. What followed was a rather nasty day.
So how is the ‘cyclical model’ taking this?
For SPX and NDX the model has used
today’s drop to erase some of the red it had posted after Friday’s rally. We
are back to the way we were before Friday. Remember on Friday the Dow was up
about 200 points and today it was down about 240 points. So we are back to
indecision. We have a couple of days of green and then a couple of days of red.
Such is life. I will go long the SPX late Tuesday or early Wednesday when the
half hour model aligns with the daily model. Given you can’t see the half hour
model you should focus on the daily model. Because I have 2 presentations on Wed.,
I may not be able to make the trade. Regardless, I will certainly evaluate my
strategy whether real or only on paper.
As for AAPL and GOOG, there is some
good news. AAPL’s drop today has taken out a lot of the red. Once AAPL gets
into Tuesday afternoon it is looking good. And for GOOG, it is following the
S&P 500 and the Nasdaq 100. Once it passes Tuesday morning, it then has a
couple of green days. And then a couple of red days. Good luck and come back
soon.
Incidentally, if you check out http://www.americanbulls.com you will find that they entered today with GOOG as a sell
and the 3 other issues as buys. However, today’s down draft has knocked them
for a loop. Naturally, GOOG has remained a sell but AAPL, SPX and NDX were all
made “sell-if” at the close on Monday. As I say, that’s the problem with linear
models. They are reactive – they are not proactive. They follow, they don’t
lead.
---------------------------------------
Friday, August 22,2008
Some Thoughts as I am
Flying on Sunday, Aug. 24’08
You may recall, I am away the next 3 days. I am traveling
(flying) and on my way to a conference. While I will try to update each
evening, it may happen that I may be tied up on some evenings. In such cases
you can use the small graphics that cover a week (in evolution). For those who
may not be aware, the model I work with has cyclical capabilities. This is an
important aspect of the model. It is a feature that few others have in their
models. Why is that? The simple answer (my opinion, of course) is because it is
not a simple task. Moreover, to do so with accuracy is a very difficult task
indeed.
I am writing this on a plane – flying high at 36,000 feet. I
teach fluid mechanics and it never ceases to amaze me how the curvature at the
leading edge of the wing can create lift. Bernoulli put together this
scientific principal about 250 years ago. Simply put, kinetic energy is
increased by reducing pressure energy on the top of the wing. People like
Let me take a few moments to tell you about cyclical
phenomena. Most things around us have a cyclical component. Even as I sit on
this plane as it flies through the sky, I am experiencing cyclical motion. The
plane is shaking. The weather is cyclic, night and day – a cyclic event, life
itself is cyclic. A car engine is cyclic and so is a power plant. In fact,
these processes are referred to as cycles (Rankine cycle, Otto cycle etc..). What
I am trying to say is that cyclic processes are all around us – even the
electricity we use at home is cyclic. You’ve heard of one having ‘ups and
downs’ – in other words one is going through a cycle.
I bring this up because the market is cyclic. In fact, it has
many cycles, some are more pronounced while others are not. Thus, you cannot
decipher what is going on in the markets without bringing in cyclical behavior.
That is my firm belief. The market is a complicated ‘beast’ because it
represents the overall behavior (views) of ‘millions’. Why is their behavior
cyclic? Well, it’s not for all. But, just think about it. Some are buying and
some are selling and tomorrow or next week or next month, their roles will be
reversed. If everyone was buying then life would be simple because we could use
a linear model that would simply follow the trend. Predicting under those
circumstances would be simple. But life is not simple. In fact, 2008 has been a
difficult year because of all the volatility. If someone is to analyze the
markets especially in the short term, the analysis (the model) must have
cyclical capabilities.
The model I have been working on has cyclical capabilities.
Like most good research some aspects were planned but many others were not and,
in fact were not even anticipated. I have been testing the model for quite some
time. It has been ‘enchanting’. As a scientific researcher, I am almost
embarrassed to say this but that is how I feel. I have made several hundred
trades this year. In mid Jan’08 I was at 2.5K. Today I am at 7K. But I’m just
getting warmed up. To succeed requires a strategy in addition to a model. You
need discipline and you need to reduce the anxiety level. Pulling the trigger
at the time the model says to is something that has taken me a long time to get
a handle on. It’s not easy. Human nature has us (read me) second guessing so
often. While I am still fine tuning my strategy, I now see the light in what
proved to be a very long tunnel.
I realize that many of the readers are looking at other
models. And that’s the way it should be. Ask yourself or those who run those
models what are the cyclical capabilities of their models. If their models are
linear, then don’t expect much from the markets during the coming months. In
fact, the odds are against you. Linear models were great for the late 90’s when
cycling behavior was hibernating. When it woke up, many took a bath.
As I entered this commentary in my computer I noticed that
someone I interact with on a ‘frequent’ basis (once or so a week) had posted
the link to this site on the GOOG discussion forum because that caused several
on the forums to email me. One individual suggested I revamp the Web site.
Another wondered when I would post my trades and yet another thought I was like
Barack Obama – naïve, inexperienced and doomed to fail. Such is life. Let me
address the last comment. I have no intention of failing and neither does
Barack. However, both of us need to adhere more closely to our game plan.
As to my web site, I have little time to improve it at this
time. My objective is to succeed – to grow 5K into 1 million in 2 years. The
web site is not a priority at this time. With regards to the other comment
about posting my trades and the value of my account, I will do so soon. My
target is Oct. 1, ’08. But, in reality, I want to do so when my account has
grown to 10K. So my immediate goal is to go from 7K to 10K. Can I do it by Oct
1? I think so and if I do I will be well on my way on My Journey. Stay tuned
and come back soon. And remember when you look at an analysis ask yourself
about its cyclical capabilities. Good luck.
When I look at what has happened the
last couple of days, I am pleased. For the past 3 days the model has been green
for SPX and NDX. And that strategy has worked well. But now as we go into
Monday, the model is posting red for all 4 issues.
For SPX the reversal is early Monday
morning (10:30 am slice). In actual fact if SPX is 1289 or lower at 10:30 am
Monday (it closed at 1292 on Friday) then the down reversal gets pinned to the
4 pm slice of Friday. For NDX the reversal is also scheduled for Monday
(afternoon). And then there are AAPL and GOOG. They too have reversals set for
Monday (let’s say mid-day).
So, given Friday’s 200 point rise, the
markets are setting themselves up to give some if not all of this gain back.
Stay tuned. It promises to be exciting. Incidentally, the graphics for SPX and
NDX are looking ‘good’ at this time. They are showing less indecision.
---------------------------------------
Thursday, August
21,2008
The S&P 500 is caught up in a
cycle of a couple of red days followed by a couple of green days. Tomorrow
(Friday), SPX is looking to start the couple of red days cycle. How exciting.
Meanwhile, the Nasdaq 100 (NDX) is putting together a longer green streak. It
has six green days in a row. Two have been used up but 4 remain.
And what about GOOG and AAPL? Glad
you asked. GOOG is following the NDX. It has 5 days of green ahead. Meanwhile
AAPL is more like the S&P 500 (the overall market). It is undecided. It has
a couple of green days directly ahead and then it has a couple of red days.
Hang in there, things will improve.
Before I close off, I want to repeat
what I said a few days ago. It has been difficult to do well in 2008. The
swings have been too violent. When you look at http://www.americanbulls.com you find that the S&P 500 money tree was at $155 on
Dec. 20, 2007 and today Aug. 21, 2008 it stands at $158. So even ‘ab’ on paper
has not been able to make a profit with the S&P 500. Meanwhile for NDX the
money tree was also at $155 on Dec. 6, 2007 and today it is at $167. Thus, as
you can see, it has been one heck of a year. As for myself, let me share a
couple of milestones with you. Around Jan 10, 2008 my $5K sank to a low of
$2.5K after I made a serious blunder. I recovered and went up but around May
20, 2008 I was only at $4.5K (again I was dogged by some serious blunders).
Almost sounds like a political campaign – doesn’t it?
Now, on Aug. 21, 2008 I am at $7.1K.
It has been tough but I am now really feeling comfortable. I think I have
improved my control and discipline sufficiently to succeed. I am not shy to
pull the trigger and to use stops. I hope I do not have a relapse. The bottom
line is that I am having a good time. I hope to be at $10K by the end of Sept.
and will then start My Journey. Good luck to all. And thanks to those who email
me with a variety of topics. I enjoy it. Keep it up.
---------------------------------------
Wednesday, August
20,2008
I won’t say much tonight. I am much
too busy. I will be at a conference the first part of next week. OK, now look
at the comments I made on Tuesday evening. I just re-read them and I actually
found them ‘refreshing’. So what is on tap for Thursday and Friday? Let’s start
with the S&P 500. It reversed Wed. morning (10:30 am slice). It now has a
couple of days of green and then there is some red. I should add that the red
is far enough out and it is weak enough that it may change.
As for the Nasdaq 100, it is green
and it has green showing for the entire future window. On Wednesday the model
did not really like the NDX and judging from the results, the model is looking
for it to make up for lost time relative to the SPX. GOOG is similar to the NDX
– the future window is all green. GOOG was down today, so it looks like the
model wants it to catch up. And finally we have AAPL. It went green early on
Wednesday. It now is looking like SPX. It has some green directly ahead and
then there is some red. So in summary, SPX and AAPL went up today as
anticipated. As a result, the model will bring in some red in a couple of days.
As for NDX and GOOG, they did not do as well today and so the model is keeping
green for them. In the next couple of days, NDX and GOOG have more upward
potential than the other two. Good luck.
---------------------------------------
Tuesday, August
19,2008
On Monday we were down 180 and on
Tuesday we were down a further 130 points. Good news, the model has the rest of
the week as green for the S&P 500 and the Nasdaq 100, so don’t despair,
there is hope. Now mind you the model did have Monday and Tuesday as red. It’s
been an exciting ride.
Let’s look at the 4 issues and how
things look for Wednesday. I’ll start with AAPL because it is a bit different
from the rest. At the close on Monday it looked like AAPL would reverse on
Tuesday. However, it did not. Instead, the model has moved the reversal for
AAPL to Wednesday morning. For those who have been following AAPL you will
recall that the model kept on looking for AAPL to drop even when it was $179.
And drop it has.
Now on to the market averages (SPX
and NDX) and GOOG. All 3 are very similar. There is a reversal to the up side
on Wednesday morning. At this point I should add that depending on
circumstances, it is possible that the reversal can be pinned to the 4:00 pm
slice of today. That can happen if tomorrow morning the market is up. What is
interesting is that even with the sharp drops of the last couple of days, the
model will reverse the issues. In addition, the model is posting green across
the future window.
For those of you who are not
familiar with the model I manage, I want you to know that it’s not your typical
linear model. Most models follow a trend. If the market is down they continue
to point down. It is only when there has been a significant recovery that a
linear model reverses direction. Few models would signal a reversal in trend
after drops of 180 and 130 points (you can use http://www.americanbulls.com as an example). But that is what the model is now saying.
Why? Because the model I manage has cyclical capabilities. This is an important
distinction. As I’ve stated in the past, the only thing that is slowing me down
is my discipline in applying the model. But, I must say that I am making good
progress. I expect to start My Journey in a month and I hope to be at $10K at
that point.
I’ve put it in my head that I want
to grow my 5K to 10K before I start. I want it to be a confidence boaster and I
also want to have some leverage. I plan to trade only futures (e.g. S&P 500
index) like I’ve been doing for the last couple of months. I’ve convinced
myself that this is the way to go.
As I close, I want to go on the
record that I really enjoy watching the model perform. I don’t know how it
stacks up with other models, but I am thrilled with it. Even with the wild
markets of late and with my lack of control and discipline, I am up 50% from
the end of May. As I say, Stay Tuned. This is just the beginning. Good luck.
---------------------------------------
Monday, August 18,2008
Sorry about the Friday update. I
could not do it but if you read what I wrote on the weekend you know that we
were looking for some down action. On Monday we got some. The Dow was down 180
points. So what about Tuesday and Wednesday? Look at the graphics below. All 4
issues are now similar. They all have reversals to the up side for Tuesday
afternoon (the second slice is at 1:30 pm and the third slice is at 4:00 pm).
AAPL is set to reverse (all things being equal) at 1:30 while the other 3 are
at 4:00 pm. Enjoy and good luck. Pay
attention to the model. It may save you a few bucks. Come back soon. And don’t
forget to email me. I read each and every one of them. Is there something you
would like to see on this page? Let me know.
---------------------------------------
Thursday, August
14,2008
I will say little today. I’ll let
you judge for yourself. As for AAPL the model continues to look for it to go
down. I am actually finding it amazing at how tenacious the model is with AAPL
at this time.
As for the NDX, today (Thursday) was
green and tomorrow morning is set to green but then it is all red.
And now for SPX and GOOG. They are
similar if you compare the graphics. There is both red and green. Today
(Thursday) was green as we expected and the green goes into Friday. Then we
have a stretch of red (about 1.5 days worth) and then 2 days of green and then
red again. Certainly, this is not an exciting situation. Anyway, good luck.
---------------------------------------
Wednesday, August
13,2008
If you examine the graphic, you find
for the SPX and NDX that there is confusion. We don’t seem to be able to put
together a move of some duration. All we have are 1 or 2 day moves. If you look
at the SPX you see that it is red at the 10:30 am slice. However, keep in mind
that the last slice on Wed which shows as red could become green if the SPX has
a move up. I use the half hour model to gauge this probability. For your info
the half hour model is looking at 11:00 am to reverse to the up side.
Finally, I checked the overall model
to see how the last Wed red slice can become green, the SPX needs to be at 1288
at 10:30 am. It closed at 1285.8 on Wednesday. So it is a close call. Let’s see
how it does Thursday morning. If it’s weak, the reversal will happen around mid
day. If it is positive (i.e. 1288) then ‘officially’ the reversal is pegged to
the close on Wednesday.
For the NDX we have some red going
into Thursday and then 3 green slices and then some red again. You judge where
we are going. With regards to GOOG its future window is virtually identical to
NDX. And finally for AAPL we have red across the entire window. The model is
not being influenced by AAPL’s up move. I maintain that when AAPL goes green
there is a 90% probability that it will be below 177. Take this for what it’s
worth. Good luck and stay tuned.
---------------------------------------
Tuesday, August
12,2008
Go back and read yesterday’s
comments. I won’t repeat them here except to say that the model pinned today’s
moves very nicely. And that goes for AAPL and GOOG too. Let’s start with GOOG.
On Tuesday the model had all 3 slices on red. Even if GOOG didn’t go down (it
was up slightly), the next 5 days are all red at this time. And AAPL is
similar. The first red slice today was at 1:30 pm. The next 5 days are all red.
Remember the red indicates the trend and not necessarily the actual price
movement. So the bottom line is that AAPL and GOOG have made some good up moves
of late. The model is now looking for them to give back some of the gains. This
is interesting given the upcoming option expiry in 3 days. If you hold calls
you should seriously considering taking some action to protect yourself. As I
have said in the past the model can be quite accurate (90%), so the odds are
high that on Friday AAPL and GOOG will be lower in price than what they closed
out today (Tuesday). As I’ve stated in the past, the model has cyclical
capabilities. This should be clear in the case of AAPL and GOOG.
With regards to SPX and NDX, they
both are pointing down as you can see for yourself when you scroll down to the
graphics. I will let you draw your own conclusions. Good luck and stay tuned.
---------------------------------------
Monday, August 11,2008
If you think back to Friday, you may
recall that all 4 issues ended the day in the green. We also saw that reversals
to red were forecast to occur on Monday at the 1:30 slice or the 4 pm slice. On
Monday we saw that this was a good decision. So let’s look at the graphics and
see what happened today (Monday). If you look at the S&P 500, the reversal
was delayed and it is now assumed to occur Tuesday morning (10:30 am slice).
You should note that even though the last real slice (the 4 pm slice) is shown
as green, it may be revised to red IF the move is judged by the model to be
sufficient to warrant this. A number of individuals have asked me to compute
this threshold value, and I have. The value is 1304.7. The SPX closed on Monday at 1305.3. So if the
SPX is down by 0.6 or more by 10:30 am the reversal (the red slice) will be
pinned on the 4 pm slice on Monday (and not the 10:30 am slice on Tuesday).
Meanwhile, the NDX reversed at the
close on Monday (4 pm slice). The NDX closed at 1941.2. So how much would NDX
have to be at 10:30 am on Tuesday to move the reversal from Monday to Tuesday.
The answer is 1954.2. Thus, if the NDX is up less than 13.0 points by 10:30 am
the reversal at Monday’s close stands.
What about AAPL and GOOG? They are
comparable to the NDX. Both of them went red at the close (4 pm slice) on
Monday. Remember, there are 3 slices in a day (10:30 am, 1:30 pm and 4:00 pm).
So, for the next few days all 4 issues will be in down (red) trends. Enjoy. And
come back soon.
---------------------------------------
Friday, August 8,2008
On Thursday I talked about the
importance of executing the plays. Today (Friday) that is indeed an appropriate
statement. We went into Friday thinking it would be a red day. The S&P was
supposed to reverse at the end of the day (assuming ‘neutral’ movement). Guess
what, it reversed at the beginning of the day instead because of the upward
momentum at the open.
As I said, on paper that is a
brilliant move but in reality it is difficult to accomplish this performance.
The half hour model at the close on Thursday had the reversal to the upside
pegged for Friday morning before knowing what was to happen on Friday. Why am I
bringing this up? Because I am coming to the realization that what I am missing
to be successful is an exit strategy. I have the other components but the exit
has alluded me. Unfortunately, without a good exit, I don’t think I can succeed
(I have just realized this – ouch). As we all know, getting in is no problem
(think
Today’s move really opened my eyes.
You cannot win if you do not have a sound exit strategy. So how does one create
a good exit strategy. As soon as I find that answer I will start My Journey to
1 million. However, I do have several ideas. One of these ideas focuses on the
use of Stops. I did Stops a couple of times a while back – it worked well and
then I got carried away and forgot about it. The way I see things now is that
the Stop can be a part of the exit strategy. And so from now on I plan to use
the Stop. I have made many trades during the year, yet I have not been able to
do really well. I have made a bit (the broker has done well) but.. Let’s just
say I’ve stayed afloat but my forward progress has been limited. Most of the
moves I initiate are winning moves. The problem is that at some point there is
a turn and the winning position tends to evaporate. Why is that? Just look at
the markets this past year (up-down-up etc..).
I can’t blame the model. It’s right
on. It’s ME. I don’t seem to be able to pull the trigger when I have to close
the position. That’s why I think the use of Stops may make the process
‘mechanical’. I hope it works out. Because if it does – I can see success
straight ahead.
If you have your own ideas I would
be interested in hearing from you. I am convinced it can be done but how. And,
of course, a Stop requires 2 decisions (at least). One is when to place the
Stop and the other is at what price should the Stop be at.
Now to the markets. As I stated, the
model reversed all 4 issues to the up side on Friday morning. In fact, the half
hour model was right on. So we closed on Friday with all 4 issues pointing up.
Now what. The model is still looking for red and so it has all 4 issues going
back into red on Monday. Notice that the S&P and the Nasdaq 100 are now
almost identical in the future window. So it looks like Friday’s rise has now
re-aligned the 2 markets and that the next few days will trend down. The conclusion
I draw from this is that the bounce on Friday was another one of those
oscillations and not a real reversal.
Good luck. Stay tuned and come back
soon. And don’t forget to give the exit strategy some thought.
---------------------------------------
Thursday, August
7,2008
For those who haven’t heard me say
it before “I think the model is enchanting”. I am thrilled with what it can do.
But that in itself does not guarantee success. For the football fans out there,
the model is like a really good quarterback with a really good play book. Is
that enough to win? Maybe. But, you still need to execute the plays. A lot of
things need to fall into place. You call a great play – like the model can call
a great move, but you then need to execute the play. You get the idea. Right
now I am hitting my stride. The market has been very difficult. It’s up one day
and down another. That’s OK but what is difficult is the size of the moves, 200
or 300 point moves in opposite directions are no longer the exception. So, to
win requires great plays and great execution. I am almost there.
Let’s get back to the markets. On
Wednesday evening I said: “So all things being equal, on Thursday morning all 4
issues will be pointing down.” Incidentally, all my daily comments for 2008 can
be found by scrolling down this page. So there is no hiding. Not that I want to
hide. I am here to prove a point. As Obama says: “Yes We Can”. Or if modified
to fit my case: “Yes I Can”. My objective is to go from $5K to 1 million in 2
years. And then I want to use that performance to launch a hedge fund that will
knock the socks off some of the existing funds.
The S&P 500 market is confused.
Look at the graphics below. Let’s start with the past. We have about 2 days of
red and then 2 days of green and then 2 days of red. The model is projecting
that the same pattern will persist in the future. So when you look at the
future window, you have on Friday at the close that the SPX will reverse to the
up side.
For the NDX (or QQQQ if you like)
and AAPL and GOOG, the market is more well behaved. There is less green
overall. In fact, the green spans from the Monday close to the Thursday (today)
open. Beyond that we have red for a part of next week. But on next Thursday
(Aug 14) the model is projecting that all 3 issues will go into an up trend.
Remember next Friday is option expiry. So if there is a reversal next Thursday
morning there will be an excellent opportunity to take advantage of this.
Stay tuned and come back soon.
PS. Yesterday (Wednesday) the site http://www.americanbulls.com issued buy signals
for both the S&P 500 and the Nasdaq 100. Meanwhile I issued the opposite
signal. This evening (Thursday) the ‘bulls’ issued a ‘sell-if’ signal for
Friday. That’s what happens when you a linear model that follows linear trends.
You end up chasing the perceived trend. My model has cyclical capabilities so
it doesn’t do that (as you may have noticed). Enjoy.
---------------------------------------
Wednesday, August
6,2008
Yesterday (Tuesday evening) I wrote:
“What you now see when you look at Wednesday is red that enters around mid-day
for the S&P 500 and by the close for NDX and AAPL and GOOG.” And sure
enough that’s how Wednesday evolved. By the close, the S&P 500 had reversed
at the close to the downside. The 3 others (Nasdaq 100, AAPL and GOOG) are all
set to reverse to the downside Thursday morning (at the 10:30 am slice). So all
things being equal, on Thursday morning all 4 issues will be pointing own.
What is interesting is the amount of
red that appears in the future windows. If you look at the 3 technology issues,
you find that they are all virtually identical. SPX is only slightly different
but also points down. There are 2 green slices but they will probably disappear
shortly. So we are in for a period of down movement. When we reverse after the
down move you will find (90% probability) that the issues are at lower prices
than they are now. This is especially important to note if you hold August
options. If you hold puts, hang in there and if you hold calls, consider doing
something to reverse your position. While no system is perfect, you want the
odds on your side.
Yesterday (Tuesday) I referred to
the web site http://www.americanbulls.com and I told you that they like most
other services follow the trend. Given the sharp increase in the market on
Tuesday, ‘bulls’ issued a buy-if signal and then on Wednesday they confirmed a
buy for the S&P 500 and the Nasdaq 100. Meanwhile, I have had all 4 issues
on the buy side for Tuesday and Wednesday but on Thursday morning all 4 will be
pointing down (sell signals). That shows the difference between a linear model
and one that is not. The model I have developed has cyclical features. Enough
already.
Enjoy the results and remember give
some serious thought to your situation if you hold August options. Good luck
and stay tuned. Come back soon (and tell your friends). There is plenty of room
for all of us.
---------------------------------------
Tuesday, August 5,2008
I’ve had several inquiries from
people who have just seen this site for the first time. It seems one of the
regular readers posted a link on a Google board. I want to thank him for doing so.
It is always gratifying to know that people appreciate what I am doing. OK.
Let’s get to their comments. Most centered on ‘How can a model predict the
future?’
The simple answer is that the model
– let me change the word ‘predict’ to ‘project’ – projects the ‘path of least
resistance’. The model is not your typical linear model that tracks a linear
trend. If you want to see what I mean go check out http://www.americanbulls.com and you will find that all the 4 issues I track were
‘sells’ going into Tuesday and then because of Tuesday’s rally, they issued
‘buy if’ conditions for the 2 indices as we go into Wednesday. For AAPL and
GOOG they kept the sell designations. On the other hand I had the 4 in up trends
as we started Tuesday and now as we go into Wednesday the model is saying that
the path of least resistance will be to the down side as Wednesday evolves.
Americanbulls is a fine service – I like it. I am only highlighting it to show
the differences that exist between them (and many others) and myself.
The model has cyclical capabilities
as you will see based on what I will say for tomorrow (Wednesday). And it is
important to note that as new data is entered, the landscape changes. That is
the way life is. Politically, some call such behavior flip-flopping. I call it
a dose of reality. Today (Tuesday) the markets exploded upward (almost 3%). So
you would think the model will continue with the green. Unfortunate, that is
not the case. Today’s large up move was too much, too quickly (that’s how I
interpret the results). What you now see when you look at Wednesday is red that
enters around mid-day for the S&P 500 and by the close for NDX and AAPL and
GOOG.
How things change. Yesterday, we
were looking at green in the entire ‘future window’ for GOOG. And now it has
become predominantly red. These will be an interesting few days.
There is another comment I would
like to make. The SPX, NDX and AAPL have several green slices on Friday (Aug.
8) and Monday (Aug. 11). You should note that if those issues decline before
Friday, those green slices may become red. I do not know if that will happen. I
try to refrain from making such suggestions. But given today’s events I think
it is warranted.
On a personal level, I think we are
going back into a down trend on Wednesday afternoon and that applies to all 4
issues (including the markets). So, stay tuned. Good Luck. And come back soon
(tell your friends – there is room for everyone).
---------------------------------------
Monday, August 4,2008
It is Monday evening. I have made a
change to the presentation. I have removed the half hour graphics. I am now
only posting the ‘daily’, overall graphics. For each day a snapshot is taken at
10:30am, 1:30pm and 4:00pm. You can see the past 5 days and what the model sees
for the future 5 days. Naturally, slices in the future are continuously updated
as new data is entered.
And, as a special favor to several
readers, I will continue to feature AAPL and GOOG. So if you scroll down you
will see the graphics for these 2 favorites in addition to SPX (S&P 500)
and NDX (Nasdaq 100).
Let’s get down to business. Where do
we stand at the close on Monday? If you look at NDX, AAPL and GOOG you find
that green is filling all the future windows. That’s quite something. So
technology is looking good for the next week. It has been beaten down and it
should now bounce back.
Meanwhile, the model was looking to
have the SPX reverse this morning but that didn’t happen. The model has now set
the reversal at 4:00pm today. One thing to note is that the last ‘real’ slice
can change if the incoming slice causes it to. So if Tuesday morning the market
(at 10:30 am) is down enough, the model may take the last green slice on Monday
and make it red. The last slice is always subject to change because it is
computed assuming the upcoming ‘future’ slice has zero change in price. That is
the only catch. Otherwise the model is right some 90% of the time. Check it
out. Enjoy and come back soon.
---------------------------------------
Friday, August 1,2008
Friday was a quiet day. To know how
the day evolved, look at the half hour graphics below and look at Friday. For
the SPX we started the day with red (down trend) and at 12 pm it reversed to green.
For the NDX, the day started in the red and around 11:30 am it reversed to
green. Incidentally, both came into Friday from red trends that started
Thursday afternoon. The half hour model sees the green extending into mid-day
Monday.
With regards to the overall trend,
the Nasdaq 100 (NDX) has run its course of selling and is now looking at green
for the next week. This is an interesting development. For the S&P 500
(SPX), we also have green directly ahead. There is a small pocket of red on Wednesday
but look at the green that is coming. Stay tuned and good luck.
---------------------------------------
Thursday, July 31,2008
This is what I wrote yesterday (on
Wednesday evening): “But look at the overall graphics and you find that the
green in the future window is now gone. The model is saying that the up trend
has run its course for now. The model has cyclical features to it. You can now
see what I mean. The Dow goes up 400 points and the model says it is time to
reverse. Isn’t it amazing. Look at the sequence of 5 graphics for SPX and you
can see how the green moved across and how red has now come into the picture
(strongly). The other point I want you to note is that the half hour model
tells you how the 2 past days actually played out. See what the model said
about Tuesday and Wednesday. Stay tuned and good luck.” Did you see what
happened on Thursday? I will refrain from comments tonight. You pick up the
ball and run with it.
Given that I focus on the overall
(call it daily) trend, I tabulated the graphics for the past 5 days.
Immediately below you can see the 5 snapshots that were generated for the
overall graphics of both the SPX (first column) and the NDX (second column).
---------------------------------------
Wednesday, July
30,2008
Wow, another up day. In reality,
today was not all up. Look at the half hour graphics for SPX and you find that
there was red between 11:30 and 2:00 pm. But overall it was a nice up day. And
when coupled with Tuesday, we have a nice streak. But look at the overall graphics
and you find that the green in the future window is now gone. The model is
saying that the up trend has run its course for now. The model has cyclical
features to it. You can now see what I mean. The Dow goes up 400 points and the
model says it is time to reverse. Isn’t it amazing.
Look at the sequence of 5 graphics
for SPX and you can see how the green moved across and how red has now come
into the picture (strongly). The other point I want you to note is that the
half hour model tells you how the 2 past days actually played out. See what the
model said about Tuesday and Wednesday. Stay tuned and good luck.
Given that I focus on the overall
(call it daily) trend, I tabulated the graphics for the past 5 days.
Immediately below you can see the 5 snapshots that were generated for the
overall graphics of both the SPX (first column) and the NDX (second column).
---------------------------------------
Tuesday, July 29,2008
Isn’t this shaping up to be quite a
week! It’s more of the same. Wild moves both up and down. The model is enjoying
the action. It is doing very well. I, on the other hand, am simply hanging in.
I am still trying to get my act together and follow the model. Normally, I get
hammered whenever I waiver and hesitate and say something like – It will
reverse soon – let me wait. By the time it reverses and I get realigned with
the model I’ve lost a bundle. But I am working on getting my act together.
Let’s go to the markets. I won’t
delve on the NDX because it is somewhat confused. When you look at the model
you see that it is oscillating up and down. Meanwhile, the S&P 500 (SPX) is
much more stable in that it moves smoothly – look at the graphics for the last
5 days. Last week we had red boxes move through the graphics of the SPX and now
we have green boxes that have started to move through. So we are now in an up
trend.
Let me spend a paragraph to describe
what strategy I am currently focused on. I trade short term (a day or two in
length). I trade the half hour trend. My objective is to trade only in the
direction of the overall trend. The plan is to sit out moves wherein the half
hour trend and the overall trend differ. One point I have realized – things are
typically easier said than done. But I am going to give it my best shot. I am
happy with the model (in fact, I am thrilled). Now I have to get to the point
that I am happy with my trading style.
Given that I focus on the overall
(call it daily) trend, I tabulated the graphics for the past 5 days.
Immediately below you can see the 5 snapshots that were generated for the
overall graphics of both the SPX (first column) and the NDX (second column).
---------------------------------------
Friday, July 25,2008
This has been quite a week. We moved
up sharply and we moved down sharply. In the end we were little changed. But
for traders it was wild. I am referring to the S&P 500 (SPX). The NDX
(Nasdaq 100) behaved somewhat differently. In fact, this week we saw the
divergence of the 2. When you look at the graphics you can see it. Moreover,
the divergence is looking to continue for some of the upcoming week. There
seems to be a fair degree of uncertainty in the NDX. It is oscillating up and
down. Meanwhile the SPX is moving more smoothly whether it be up or down.
Let’s get back to the S&P. For
those who have been paying attention we have had waves move through time. Last
week it was red and then on Friday we went into green. You get the idea. I’ll
leave it with you. Good luck.
Given that I want to focus on the
overall (call it daily) trend, I tabulated the graphics for the past 5 days.
Immediately below you can see the 5 snapshots that were generated for the
overall graphics of both the SPX (first column) and the NDX (second column). If
you have some interesting way of presenting the data. I value the comments I
receive.
---------------------------------------
Thursday, July 24,2008
There is not much to say. The
markets are wild. They are gyrating, they are confused, they are irrational. So
where are we? Let’s focus on the S&P 500. The past 5 days show red. But on
Friday we will get back into green mode. I can’t wait. The half hour model
reversed today around 1 pm and the green feeds into the overall model.
What does the model think of today.
Basically nothing. Today’s action changed nothing. We were in a down trend
which is about to reverse to the upside on Friday. Good luck and come back
soon. And to those who recall my comments about the S&P at 1255 (and at
1277). Isn’t it something to see what has happened (thus far).
Given that I want to focus on the
overall (call it daily) trend, I tabulated the graphics for the past 5 days.
Immediately below you can see the 5 snapshots that were generated for the
overall graphics of both the SPX (first column) and the NDX (second column). If
you look at the bottom of the list (the oldest) you see that we had green
directly ahead. BUT a couple of days later (move up the list) red entered the
‘picture’. We still have some red directly ahead.
Good luck to all and come back soon.
And let me know if you have some interesting way of presenting the data. I
value the comments I receive.
---------------------------------------
Tuesday, July 22,2008
What a game! Some days it’s: What a
nightmare! Can you sense my frustration? Last evening there was free fall. And
then on Tuesday morning there was some semblance of stability and then with an
hour to go the markets took off. I didn’t actually see today’s action but I saw
the graphs.
Today was a tough one for the model
– I’m referring to the overall daily one. The half hour model caught this jump
but I’ve decided as I have already stated that I will follow the overall trend.
Let’s look at the SPX and NDX. Both are in down trends. Today’s trading data
did not change that. As you can see from the graphs that follow, they have
several more days of red left. So what happened today? Simple answer. I don’t
know. But there was plenty of news which I suspect distracted traders from the
overall trend. When I look at the results for this move I see the model has
scored well with NDX but it has done badly with SPX. Now mind you, the poor
performance is only due to today’s move. Since the move is not over and SPX
went into a down trend at about 1255 (today it closed at 1277), then I strongly
suspect that the SPX will give back all of today’s gain (and more) before the
model closes this move out.
The model is not often wrong and an
error of 20 points on the SPX is rarely seen. But, while not likely it is still
possible. It certainly will be interesting to see where the SPX is when the
model reverses the trend.
Given that I want to focus on the
overall (call it daily) trend, I tabulated the graphics for the past 5 days.
Immediately below you can see the 5 snapshots that were generated for the
overall graphics of both the SPX (first column) and the NDX (second column). If
you look at the bottom of the list (the oldest) you see that we had green
directly ahead. BUT a couple of days later (move up the list) red entered the
‘picture’. We still have some red directly ahead.
Good luck to all and come back soon.
And let me know if you have some interesting way of presenting the data. I
value the comments I receive.
---------------------------------------
Monday, July 21,2008
Not that much happened on Monday and
then after hours all hell broke lose. The model is tracking the overall market
very well. We still have some red directly ahead. But by the end of the week we
can see some green. Enjoy.
Given that I want to focus on the
overall (call it daily) trend, I tabulated the graphics for the past 5 days.
Immediately below you can see the 5 snapshots that were generated for the
overall graphics of both the SPX (first column) and the NDX (second column). If
you look at the bottom of the list (the oldest) you see that we had green
directly ahead. BUT a couple of days later (move up the list) red entered the
‘picture’ and we now have a string of red directly ahead. But, don’t despair
because by Friday the green will be back. Naturally this time frame can change
as a result of market action. A good example is the trading from last Wed. We
had green directly ahead and then the market went up some 250 Dow points. What
did the model do? It replaced several green boxes with red ones.
Good luck to all and come back soon.
And let me know if you have some interesting way of presenting the data. I
value the comments I receive.
---------------------------------------
Friday, July 18,2008
I won’t comment on today’s market
action besides stating that there was both up and down movement. Before
describing what the model sees, let me state that I am still trying to figure
out how to trade – the strategy in trading that is. One time I’m trading on the
half hour results and another time I’m trading the overall model. What I have
found is that trading the half hour model has very good potential BUT (note the
capitals) there are several pitfalls. In a nutshell, the trades happen too
quickly for my liking. I don’t think I can do it. Moreover, I don’t have the
time to do it. So what is the alternative?
I think I have to trade the overall
trend. Sometimes it is hard to ignore the half hour model because it is
accurate BUT it is hard to be consistent with it alone. What I want to do is to
use the half hour model to set the entry and exit points for the overall model.
For the last couple of months I have chased after too many moves. I have had
successes and I have had failures. Not long ago I was over $9K. Today I am at
about $7.5K. One reason is the market volatility. Because I don’t watch the
markets ‘continuously’ I miss moves and end up on the wrong side. I then
hesitate to make a move and before you know it I incur losses. So I need to
trade less and let some of the intraday moves go without reacting to them.
Anyway that is my problem. As I have said in the past without a viable trading
strategy success will be elusive.
Let’s now look at the SPX and NDX
for next week. The overall model shows that both indices are in down trends
which are projected to extend into most of next week. If one was to follow my
proposed strategy, one would have sold on Thursday according to the half hour
model. The short would then be held until the end of the trend. The timing of
the exit would be fine tuned with the half hour model. I don’t know if this is
the strategy I will settle on but I am obviously running out of options. I need
to come up with a strategy that I can deal with. I had considered this strategy
a few months back but I got carried away as I saw the intraday moves and the
greed factor kicked in. So I quickly jumped ship. In hindsight, I think that
was a mistake.
Given that I want to focus on the
overall (call it daily) trend, I tabulated the graphics for this past week.
Immediately below you can see the 5 snapshots that were generated this week for
the overall graphics of both the SPX (first column) and the NDX (second
column). If you look at the beginning of the week you saw green directly ahead.
And now at the end of the week if you look ahead to next week you see red.
Enjoy.
Good luck to all and come back soon.
---------------------------------------
Thursday, July 17,2008
The roller coaster ride continues.
Up, down, up – stop, I want to get off. I bet many of you feel that way. I know
I do.
So where are we with the markets?
The overall model shows red boxes for the next 5 days. The red starts Friday
morning. However, it is very likely that the last slice on Thursday which shows
as green will be flipped and it will likely become red because of the drop in the
after hours markets. If that is the
case, then the overall model will have the reversal to the down side starting
at the close on Thursday. If you look at the half hour model you see that the
S&P 500 and the Nasdaq 100 both closed out Thursday with red and the red
extends into Friday.
So the bottom line looks like a
reversal to the downside began sometime on Thursday. For the SPX it happened at
10:30 am while for the NDX it took place at 2:30 pm. Good luck and stay tuned.
---------------------------------------
Tuesday, July 15,2008
A Life in the fast lane – what a
treat – not. So, how many more times are we going to have these ‘massive’ moves
up and down – and in the same day. It has become so bad that all I look at is
the half hour model (the bottom graphic of each pair). Trying to pin down the
trend one week from now is a losing proposition. Now mind you, I am not
complaining because the half hour model is doing wonders. I am thrilled. I am
back to $9.4 K. I could have been at double that level but it has been
difficult to stick to my trading strategy – too many distractions. But I am
getting the hang of it – heck, I am even using stop orders.
So let’s look at the markets by
first considering the half hour model. One thing is obvious when you look at
the S&P 500 and the Nasdaq 100 – they are identical. On the surface I find
this amazing especially if you consider today’s data when the S&P was down
and NDX was flat. Let’s analyze the 3 days (Mon & Tues that are in the past
and Wed which is in the future). Monday was all red. The trend was down
throughout the day. Then we have Tuesday. The down trend continued for the
first hour and then we got green. However, the down trend resumed late in the
session (around 3:00 pm) and this down trend was projected to carry forward on
Wednesday. So for Tuesday we had 2 red slices, and 8 green slices and then 3
red slices.
Let me clarify what the Wednesday
forecast of red means. Simply put, the model is negative for Wednesday. BUT,
one must realize that there are 13 data points in a day. So the red we see is
subject to change depending on how the trading evolves. Come back tomorrow to
find out what happened to the red.
I’ve brought this up because I am
considering posting a parallel page to this one where I would simply post what
I am seeing as the trading day is evolving. As an example, let’s consider today
– Tuesday to illustrate my point. This morning I traded the up move and did
well and then late in the afternoon I went short. I was following the evolution
of the trend during the day. But, let’s take a step back. Let’s pretend it is
Monday evening and we are looking at Tuesday. What did we have on Monday
evening. The forecast for Tuesday was 4 red boxes and then 9 green boxes. In actual
fact today we had 2 red boxes which were followed by 8 green boxes and the day
ended with 3 red boxes. So you can see that the forecast gets modified as
actual trading data is fed the model.
Do you have an opinion about me
posting updates during the day. Would it be of value. Would it help you. What
is your opinion. Good luck and stay tuned and let me know how you feel about
the proposal I have made.
---------------------------------------
Monday, July 14,2008
After today’s drop the markets look
rosier than they did on Friday. On the overall model the rest of the week is
green. So I have turned positive for the next few days. I use the half hour
model to time my positions in the futures. It has been difficult because of the
wild swings. If the markets were more stable, life would be really nice. But
they aren’t and so it is somewhat difficult to do well. Stay tuned and good
luck.
---------------------------------------
Friday, July 11,2008
Friday was wild. The swings were
amazing and scary. Instability is everywhere. The markets are wild. But when I
look at the model I find that it sees a good (green) week coming up. You should
also note that the S&P 500 and the Nasdaq 100 are virtually identical. I
think this week will be ‘much’ better than last week. But these markets are
volatile and they can be easily distracted by rumors, tidbits of news etc..
Stay tuned and good luck.
---------------------------------------
Thursday, July 10,2008
I will leave the analysis to you.
Remember a move starts with the half hour model and works into the daily model.
The end occurs by starting looking at the daily model and then combining with
the half hour model to determine the exit point. Since I trade the futures I
focus predominantly on the half hour model to determine the entry and exit
points. I also take into account the overall trend and try to align with it. I
have been shafted a number of times by not doing that. I hope to improve on
that aspect. As you know the markets are wild. At this time we have a couple of
green days directly ahead and they are followed by guess what – a few red days.
Such is life.
Stay tuned and good luck.
---------------------------------------
Wednesday, July 9,2008
Yesterday I said: “The S&P 500 is
wobbly (up-down-up-down)…. There is uncertainty in the air for the overall
market.” Well, I guess that sums things up. Life is rough. So if you are
trading you need a strategy. What about the markets after today’s sharp drop?
From today’s snapshot, we have the
S&P 500 having 4 good days starting tomorrow (Thursday). Naturally, we
revise our outlook everyday. But at the close today (Wednesday), we see the
half model positive for Thursday and then we have 3 green days (Fri, Mon and
Tues) from the overall model. And what about the Nasdaq 100. It is similar but
only has 3 days of positive (green from the half hour model for Thursday and
then Friday and Monday are green from the overall model).
Stay tuned and good luck.
---------------------------------------
Tuesday, July 8,2008
I am pleased with how the model is
doing. Look below to review what I wrote on Saturday. The S&P 500 is wobbly
(up-down-up-down) for the next 5 days. There is uncertainty in the air for the
overall market. What about the Nasdaq 100?
The next 5 days contain 15 slices.
It only has one slice that is green. It is the first slice (covers the 9:30 to
10:30 am time frame). The remaining 14 slices based on the data up to the close
on Tuesday is red. So the Nasdaq 100 will be abit more unstable. It will tend
to go down more. Come back soon to see how all this has played out. Good luck.
---------------------------------------
Thursday, July 3,2008
It is Saturday evening as I write
this commentary. Things are not straight forward. Five of the 6 issues are
showing green in the first part of the coming week and red in the second half.
The exception is AKAM. It is basically green all week. Let’s take this
opportunity to review each issue. Let’s look at what the issue did during the
past week and let’s also look at what the model is looking to happen to each
issue in the coming week.
The first issue is SPX (S&P 500
index). Monday and Tuesday were mostly green (except for the red slice on
Tuesday morning). And then Wed and Thursday were red. The cycle is projected to
repeat into the future. Monday and Tuesday of next week are projected as green
and then Wed and Thursday are shown as red.
The Nasdaq 100 (NDX) is similar to
SPX. Monday and Tuesday were green and Wed and Thursday were red. And next week
is shown mostly as green except for next Thursday. So NDX is looking like SPX.
Now let’s look at the Dow. It is
interesting especially given the grim news that is plastered everywhere you
look. Last week the Dow only had one red slice (in a total of 11 slices). It
happened on Wednesday – the second slice. The slice was red meaning sell at
1:30 pm and buy at 4:00 pm. At 1:30 the Dow was at 11,347 and at 4:00 it was at
11,216. So the Dow dropped 131 points on Wednesday afternoon. For the week the
Dow went from 11,346 at the close on Friday, June 27 to 11,289 at the close on
Thursday, July 3. So the Dow dropped 57 points for the week. Now you know why
the model had the week as green. For next week the Dow will join the other 2
averages. We will have green for the first 2 days and red follows for the rest
of the week.
Now to AAPL. Last week it was like
the NDX. Green for the beginning of the last week and red for Wed and Thursday.
Like the others, next week looks unsettled. Some green at the beginning of next
week and then red follows.
What about GOOG you ask – I’ll
assume you are asking. GOOG is just like the Dow. GOOG had a good week. It was
all green except for the red slice on Wednesday (like the Dow). And for next
week we have Monday and Tuesday showing up as green while the rest of the week
is red. As with last week, the coming week is just like the Dow.
And finally we have AKAM. Last week
AKAM was like the market averages (NDX and SPX). However, next week AKAM is mostly
green. So AKAM is looking to ‘break away’ from the markets.
Stay tuned and good luck. Do I need
to tell you that the markets are unstable. I didn’t think so. Come back soon.
---------------------------------------
Tuesday, July 1, 2008:
At the close on Monday I wrote: “The
markets showed some stability. I know it’s only one day.” Today that stability
went out the window. Another wild day has come and gone. This time I did very
well. I am back at $10K. ( I was at about 5K around the end of May). I am
really getting better at both assessing and executing the moves. Enough about
me. What about the markets?
There is little to say. Today’s data
was in line with the model’s expectations. So the overall model is looking at
the SPX and the NDX to continue in an up trend until later on next week.
Incidentally you should note that the S&P 500 and the Nasdaq 100 are
virtually identical when viewed on the graphics. I realize that today NDX was
up more than SPX. But on Monday the reverse was true, so on average they can be
the same. Good luck to all and see you on Wednesday.
By the way look at the half hour
data and you can see how today evolved. The first half hour (slice) was
negative. The next hour (2 slices) were positive. Then we had 3 slices (1.5
hours) that were negative, and then the rest of the day was positive. The final
positive stretch began with the 1 pm slice. And what about tomorrow? The half
hour model has the day (slices) painted red. BUT remember the overall trend is
up – that is important to note.
---------------------------------------
Monday, June 30, 2008:
What pleasant relief. The markets
showed some stability. I know it’s only one day. But I take it one day at a
time. I am presenting only SPX and NDX for now. Both are identical. We have green
that started at the close last Friday (the 27) and it extends into July 8. So
let’s see what will happen. Stay tuned and good luck.
---------------------------------------
Friday, June 27, 2008:
What a week. Everyone is saying it.
However, I am not one of them, anymore. When you look at the market graphics
below you see that Monday was red and then Tuesday and most of Wednesday was
green. Thursday was red (that was one nasty day) and then Friday was red for
the first 2 slices but closed with a green slice. And what about next week? At
this time all the future days are green. Be brave, hang in there. Things will
improve.
You may have noticed that I have
included the graphics for all 6 issues I follow. I find it amazing that all 3
indices were identical this past week. We started with red, went to green,
dropped into red and closed the week in green. You need to know that the last
slice is always subject to change. It is not really in the past – think of it
as the present. So if Monday morning the market drops, it is possible that the
reversal as signaled by the green on Friday becomes red. Such is life. But if
the 10:30 am slice is green, then the reversal holds. And even if the last
slice is converted to red, there is green in the future window that is pushing
hard to take hold.
You will note for the half hour
model that I am now presenting 2 past days and 1 future day. I think this is
better. Let’s look at the S&P half hour graphic. Look at Thursday and
Friday. You will actually see that those 2 days had nasty pockets of red but
there was also green. In fact there was more green than red. The news media is
spreading fear. I don’t see it and neither does the model. I agree that oil is
a factor. One reason why it is increasing so much is because the markets have
been down. But sooner or later that bubble will burst. Once the market
stabilizes, oil will drop. But this is for the future. Oil is currently not
priced based on supply/demand, it is priced by speculation. Large amounts of
money are hedging declines in the equity markets by going into commodities.
What about the 3 stocks? Well, the 3
stocks have behaved for the past week much the same as the markets. And the
future looks quite green. So I am positive about next week even though it is hard
to be given the pessimism that surrounds me (and you). As I write this, I
noticed that http://www.MarketWatch.com is quoting a market strategist who
is referring to the upcoming week as a ‘dangerous’ week. Stay tuned and good
luck. It promises to be exciting. Remember, if Monday morning the market holds
its own (even if it is down a bit), there will be green throughout the week.
---------------------------------------
Thursday, June 26,
2008:
Yesterday I described the market as
crazy. Today, we saw more of the craziness. I don’t have a problem with a down
day – but 3%, that’s excessive. On a personal note I broke even today. I made
some and then I gave it back. Let me explain what happened because it will help
all of us better understand the model.
Let’s start with the half hour
model. Before going any further, I will tell you that I will change the
presentation of the graphic. For those who are regulars, you know I have 1 past
day and 2 future days. I am considering showing 2 past days and 1 future day
(or perhaps one past day and 1 future day). I also want all to know that the
past day is normally quite accurate. You should pay close attention to it
because it is like the nightly news cast. It tells us what happened. Let’s look
at today’s trading as an example. Look at the S&P and you have the half
hour model saying to buy at 12:30 pm today (Thursday). Look at the Nasdaq 100
graphic (NDX) and you have the model going green at 12 noon today – Thursday.
In reality it was a bit odd because prices were lower later in the afternoon –
but such is life. I actually followed the model and went long the S&P
futures (I had no position at the start of the day). I also bought back the
QQQQ calls (July 47) I had shorted yesterday. I kept the July 48 calls (long
position).
So why did the half hour model think
that mid day was a buying opportunity. I don’t know. But in all fairness it was
the last half hour of trading that accounted for most of the additional drop
(relative to mid-day). In fact the SPX was at 1294 at 12:30 pm and at 3:30 pm
the SPX was at 1291. With regards to the NDX, it was at 1878 at noon and then
at 3:30 it was 1868. Thus, the 3:30 numbers were in line with what one might
expect on those ‘rare’ occasions BUT the closing numbers were bad. Now mind you
there is an interesting point to note and that is that the model was not shaken
by the drop at the close because we see the green extend into Friday.
And what about the overall trend
model. Yesterday it had a string of red directly ahead in the future window.
This morning the model put the red to the Wednesday close and has it extending
into Friday (mid-day). What follows after that is all green. So today’s drop
has consumed the red and we now have green. What a flip-flop! What’s the bottom
line.
Assuming Friday morning the market
stabilizes, we will be looking at a green stretch – yes the next five days. But
that is subject to change as conditions change. I went long because I saw these
results at mid-day. I think the model will prove to be right and that there was
a short term buying opportunity today. Time will tell if the model is right.
Nonetheless, I did make a mistake. I went long with the overall model pointing
down and with the reversal only appearing for Friday. In hindsight, I should
have waited. I didn’t because I felt the half hour would lead into the overall
results. Friday will be an important day because it will give us some insight
into how the model is performing.
Stay tuned and good luck.
---------------------------------------
Wednesday, June 25,
2008:
What an afternoon. I went to watch
around 2 pm to see what the Fed effect would be. Initially, there wasn’t much
and then things went crazy. The market took off. And then the market dived and
then it took off… It was wild. But I don’t think it was the Fed because after
the close the market continued its down move – especially the Nasdaq. It’s
earnings time again – blame RIMM (apparently).
Before we discuss this crazy market
let me tell you what I did. First of all, I am back in the options game and I
continue with the futures. So I am doing both. I started the day (Wed) with a
long position in S&P futures. I had also acquired July calls on the QQQQ
(the 48 strike). The overall model was pointing up. This morning the market had
a nice run up and by mid-day (around 1 pm) I closed out my long futures
position (did not go short). That turned out to be a good move. But what I am
thrilled about is my long QQQQ position. I did not close it. Instead, I sold
short the next lower strike (the 47 call). This created a bearish call spread
(credit). So that put me in a bearish position but because it is a spread, the
moves are dampened. To go back to a bullish trend all I have to do is buy back the
calls I shorted.
So what is the bottom line to the
strategy with options. Simple, really. Buy calls or puts depending on the
overall direction. Create a credit spread when the half hour model signals a
reversal inside the overall trend. OK enough about me and my strategy. What
about the markets? Well, for starters the rosieness is evaporating quickly.
Look at the graphics below. Note that the S&P 500 and the Nasdaq 100 are
identical (both the past 5 days and the future 5 days). The selling however should
be done on Friday because the half hour model is not aligned. I plan to go long
the S&P on Thursday morning (if I have the opportunity). This is based on
the half hour model and then to reverse to the down side on Friday. I will also
try to buy back my short calls on Thursday and keep the long calls until Friday
when I will sell them and buy puts. There is excitement in the air. Stay tuned
and good luck.
---------------------------------------
Monday, June 23, 2008:
Monday was quiet after Friday’s storm.
If you look at the graphics below for the S&P 500 and the Nasdaq 100 you
find striking similarities for the overall trend data. Both SPX and NDX turned
red at the 3rd slice on Thursday, June 19. However, they are looking
to go back into the green. In fact, both are looking at 5 days of green. The
SPX got its first green slice at the close on Monday. Meanwhile, NDX is set to
get its green slice at 10:30 am Tuesday morning. Because these are the first
slices in a new trend, their position on the graphic is not yet fixed. For
example, SPX has a green slice at 4 pm Monday. If SPX is up tomorrow morning,
the green slice will stay. However, if SPX is down, it is possible that the
last slice will become red and green will start on Tuesday. This is one of the
reasons I use the other data (half hour model) to fine tune the reversal.
So let’s consider the half hour
model. In both cases we ended Monday with red slices. And we know that the
overall trend is on the verge of green. So when is the half hour model turning
green? The answer is 11:30 am Tuesday for both SPX and NDX. Thus all things
considered, Tuesday morning looks like an excellent short term buying
opportunity. Let’s revisit this analysis on the weekend and see how we did.
Good luck and stay tuned.
---------------------------------------
Friday, June 20, 2008:
What a difference a day makes. On
Friday I started the day long the S&P 500 and short GOOG. The GOOG position
was an expiring spread which was already worth about zero. But the S&P was
a big loser because I lost dollar to dollar. So what happened. Easy. At the
close on Thursday we had green for Friday. Not so fast. The overnight trading
was so negative that the model changed the last slice on Thursday to red and
kept red on Friday. I decided to stay with my long position and took a hit. At
the end on Friday I was at $8.9K. Such is life. When you scroll down you will
find that I have now replaced the GOOG graphics with the NDX graphics (QQQQ, if
you like). The reasons will become apparent in the following commentary.
On Friday I did something else. I
opened up a small bullish credit put spread on the QQQQ. As many of you know,
the QQQQ is a clone of the Nasdaq 100 index. I shorted the July 48 put and
bought the 46 put. The QQQQ closed around 47.5. So the spread has an intrinsic
value of 50 cents. I got a credit of 75 cents. I may have jumped the gun a
number of months ago when I dismissed options. There is one significant
advantage to options and, in particular, credit spreads - they move more
slowly. It is easier to sleep at night. But the profit potential is very good.
If you read what I wrote the last few days, you see that I was trading options
only in expiry week. My modification will be to trade the entire month. I will
continue to trade volatility (like GOOG and AAPL) in the expiry week and
indices like QQQQ and SPY the rest of the month.
What about the markets? Well, Friday
was a mini-disaster. But on Monday the overall trend will go back to the upside
for the S&P 500 and the Nasdaq 100. And, in fact, the up move based on the
half hour model started on Friday afternoon. Incidentally, that’s why I got the
bullish QQQQ position. At this time, I would not read much into Friday’s drop.
It happened – case closed. When you look at the half hour model for Friday for
both indices you see green at the end of the day. The last point I want to make
is that while the overall trend is up at the 4 pm slice on Monday, the red in
the Monday box can be wiped out if the S&P is at 1326 at the 10:30 am slice
on Monday morning. So a rise of 8 points (about 64 Dow points) and the model
would advance the green to the point that the last Friday slice would become
green.
Come back soon. Stay tuned and good
luck.
---------------------------------------
Thursday, June 19,
2008:
Today I got my account back to $10K.
I am thrilled. It has been an amazing ride. I was reviewing what I have written
this year. I am referring to the collection of commentaries at the bottom of
this page. In particular, look at Wed. Feb. 13, 2008. If you read it you will
find that I was at $6.2K and I had come back from $2.9K. You will also note my
reference to Barack. And then on Friday March 28 I mentioned that my account
had gone to $7K. And a month later on Thurs. May 1, I was down to $5.9K. It has
been tough but I now am comfortable. I am confident and I’ve learned to better
appreciate the model.
With regards to the S&P 500 and
GOOG, we have both in up trends. GOOG is clear while the S&P has a small
red patch. However, the red is only marginal. So green may overtake the red or
maybe the reverse will happen. Let’s watch and pay attention and not try to
second guess. The red is in the Monday slice – we have time to refine our analysis.
Before I leave you, I wanted to
answer an e-mail I received a few days ago (from John?). I acquired a bearish
call spread on GOOG on Tuesday morning. At the time GOOG was at $575. So I sold
the June 580 call and I bought the June $590 call. I received a credit of
$3.40. The total liability for this spread is $10. Thus, I had to have $6.60 in
my account. The question related to why I did this. Why did I not simply buy a
put. First of all, I do not buy options. It is too easy to get ‘shafted’. The
premiums are simply too high to win consistently. My only play in the options
arena is credit spreads. Incidentally, I only trade spreads in the expiry week.
During the rest of the time I trade futures on the S&P 500. Look at the
spread I got. To break even (i.e. give back the $3.40 I received) GOOG would
have had to have gone from 575 to 580+3.40=583.40. In other words, to break
even GOOG would have had to have risen 8.40 in 4 days. Tomorrow (Friday) is the
last of those 4 days. At the close on Thursday GOOG is about 561. The spread is
worth about 20 cents. I plan to let it expire but we will see. I do not do much
analysis regarding the spread I will enter. On the weekend I was looking at the
570/580 combo. And then on Monday GOOG went up while I waited for the model to
reverse to the down side and so I moved up my spread. Had I stayed with the
570/580 combo I would have made 50% more and risked 30% less. But that is with
hindsight. I am pleased with what I did.
---------------------------------------
Wednesday, June 18,
2008:
I don’t have much to say about the
results of the model. You judge for yourself. Yesterday’s comments still hold.
But, let me tell you about what I am doing in my trades. First, let me tell you
that at this time my account is up to $9.7 K. Today was a good day. I came into
Wednesday short GOOG and the S&P 500 futures.
Around mid-day I closed my short
S&P and went net buy. So I am now long the S&P. And if you look at the
overall trend as depicted by the top graphic, you see that the S&P is now
looking at green for the coming 5 days.
With regards to GOOG, I plan on holding my position until Friday’s
expiry. And finally I want to thank all those who have written me. I enjoy your
comments and, yes, I appreciate your criticisms. Stay tuned and good luck.
---------------------------------------
Tuesday, June 17,
2008:
As I stated the last 2 days, I went
short the S&P 500 futures and I also got a bearish call spread on GOOG. If you
look at the graphics below, you will see (hopefully) what I am seeing. I will
go long the S&P 500 on Wed. morning. I am currently short (opened the
position on Tuesday morning). I will reverse my position for a day.
And for GOOG, I will continue to hold
the spread. My plan is to hold it until expiry. But each day is a new day. Good
Luck and stay tuned.
---------------------------------------
Monday, June 16, 2008:
I don’t have much to say today. What
I said on the weekend still holds. I am about to short the S&P 500 and I am
going to short GOOG via a June credit call spread. For details see what I wrote
on Friday. And given my focus on GOOG (for this week) I will continue to
feature its graphics. Incidentally, the graphics tell the story. There is red for
the rest of the week (overall model). So good luck and stay tuned.
---------------------------------------
Friday, June 13, 2008:
Friday was a terrific day. The
market followed the model very well – or should I say the model followed the
market very well. At this time I am not sure – the model is doing such a good
job. It has lifted my confidence greatly. I was out of the market on Friday –
just missed getting in and then I was tied up most of the day. But that is
irrelevant. What is important to me is the model’s performance. And that is
something I am very happy with. I remain at $7.8 K.
What about Monday (and the week)?
For starters, when you look at the graphics below you will find not only the
S&P 500 but also GOOG. Why GOOG? Because. There are 3 reasons: 1) GOOG, in
the coming week, will look much like the S&P – both will trend down, 2) it
is the week of options expiry, and 3) a bearish call spread is an interesting
and potentially quite profitable play for GOOG in the above environment.
So the bottom line is this. I plan
to get in on Tuesday morning with a bearish call spread on GOOG and a short
position on the S&P futures. The spread I am planning to get is
(tentatively, of course): a) short the June 570 call ($10.00-10.30) and b) go
long the June 580 call ($5.50-$5.70). The spread should be worth a credit of
about $4.50 or so at last Friday’s evaluation.
Stay tuned and good luck. It
promises to be exciting.
---------------------------------------
Thursday, June 12,
2008:
Today (Thursday) was a nice day. We
went up in the morning and pulled back some in the afternoon. I was pleased. I
was long going into Thursday and then I used the half hour model to close the
long to hold no position. Why no position? Because the overall trend is up. So
my account is at $7.8 K.
What does the model see for Friday
and beyond? If you look at the top graphic you see that the overall model is
pointing up. In fact, this morning the model took the last slice in the
Wednesday window and made it green. So Thursday is all green. And at this time
the green is one week long. Meanwhile the half hour model is looking to become
green again (first slice on Friday). It is important to note that the green can
move to the last slice on Thursday or it can move to later, on Friday. That
depends on how the market does. The future slices you see are computed for a
FLAT market. If the market moves up, the last slice (on Thursday) will become
green. Otherwise, the green will be delayed. Stay tuned and good luck.
---------------------------------------
Wednesday, June 11,
2008:
Ugly. That’s how Yahoo described
today. I agree. I got caught long and took a hit. My $8.2K went to $7.1K. Ouch.
OK, enough talk – I will survive. What is important is to understand what happened
and how to take this into account in the trading strategy. Let’s get down to
business.
If we turn the clock back we find
that at the close on Tuesday we had the half hour model in down mode but with
an even market it would go green on Wednesday morning at 10:00 am (the first
slice). Well, guess what happened – it did not go green at 10 am. It eventually
went green at the 12 pm slice. You can see this if you look at the half hour
graphic below (the second graphic).
What about the overall model. What
happened. Let’s review. Tuesday at 4 pm the model had the last slice green. Now
mind you the model did so by assuming the next slice (Wed 10:30 am slice) would
correspond to a FLAT market. When the 10:30 am data was entered into the model.
The last slice on Tuesday was converted to red (we had it initially as green).
As I say, such is life. And the red persisted. We will have green at the 1:30
pm slice tomorrow (Thursday). So today was nasty because things happened too
quickly. It was difficult to react.
As I was writing this I asked myself
what was the problem. Initially, I told myself my trading strategy was the
problem. After some thought I concluded – not so fast. The problem was the
green slice the overall model put at 4 pm on Tuesday. It did so in good faith.
There was nothing wrong with that. By 10:30 am both models (daily and half
hour) were pointing down. But I held my long instead of going short. Had I gone
short it would have been a neutral day. So I am at fault and not the model.
Days like today are unavoidable. We have to learn to deal with them.
What about Thursday? Well, things
are looking good for the next few days (5). I know I said that yesterday and
the market tanked. But I will not back down from reporting what the model is
saying. And I am investing as best I can with the model. Stay tuned and good
luck.
---------------------------------------
Tuesday, June 10,
2008:
Tonight as I write this, I decided
that we should explore a few new things. So I want you to focus on the half
hour model graphic that follows this commentary. In the graphic, the left box
tells you what happened today as decided by the model. The model had green (up
trend) until 1:30 pm. Then for the 2 pm slice we see it colored as red. At the
close on Monday we had Tuesday as green all day. However, as the trading data
on Tuesday was fed into the model, it reversed to the down side by 2:00 pm.
This down trend continued until the end of the day. Incidentally, I resisted
getting out of my long position for reasons that I will tell you later in this
commentary. Note that on Wednesday (all things being equal) there is some
green.
Meanwhile, the overall model (top
graphic) has green in the future window for the next 2 days. My struggle in
formulating a trading strategy is how to couple both models. I have yet to
satisfy myself that what I’m doing is the best strategy. In fact, I don’t think
it is the best. When I finalize my strategy I will start My Journey. I am not
here to lose, I am here to succeed. Incidentally, all this flip-flopping by the
market has left me at $8.1 K. I hope to get to $10 K by the time I start My
Journey. So stay tuned and good luck and thanks for your messages.
But, before I leave you I want to
share another graphic with you. It is from the half hour model and it shows the
results of the last 4 days. I also show the corresponding moves that the half
hour model indicated. I’ve tried to trade these short moves but.. My conclusion
is that it is too difficult, too time consuming and too stressful. I am leaning
to using the half hour results only to fine tune the entry and exit points for
the overall trend. If you look at the overall trend you find that the trend
went to the down side at the end of the day on Thursday June 5. Thus, according
to the half hour model I should have shorted at 1396.7 on June 5 at 12:30 pm
(the first red slice). The short should have been held until Monday June 9 when
one could see that the overall model would go green by the end of the day.
Thus, looking at the half hour results, I should have closed the short and gone
long at 3:30 pm on Monday June 9 with the S&P 500 at 1354.7. This, I think,
will be the trading strategy I will adopt. When I do I will let you know.
---------------------------------------
Monday, June 9, 2008:
We saw some relief on Monday. It was
welcome after Friday’s nasty drop. If you look at the half hour graphic below
you see that the model was pointing up (green) until 1 pm when it went into
down (red) mode. The red persisted until 3:30 pm when it became green again.
And the green persists into Tuesday. So this is positive for the market.
Now let’s look at the daily model
(top graphic). We see that today (Monday) at the 4 pm slice the trend turned
green. I should also point out that the red in the June 12-13 is only
marginally on the verge of red. It can easily become green. So the next week or
so is looking good for the market.
What do you think. Let me know. I
will make an effort to answer you on this site. So stay tuned and good luck.
---------------------------------------
Friday, June 6, 2008:
Wild! That describes Friday. Those
who follow what I write (and what I do) know that even though the market had
been up over 200 points on Thursday, the model had told us that there was
little up side left. The model said to go short with any sign of weakness on
Friday morning. As it turned out, the model was right. Now mind you I hate this
market. It is difficult to be consistent. I went into Friday short the S&P
500, however at mid day I closed the position and went long. The Dow was down 270
points at the time. That was not a mistake because that is what the half hour
model was saying. I am still long because I decided not to follow the short
signal. The reason can be found when you examine the graphics that follow.
Look at the half hour model below
and you see 2 days of green. You also see some green coming up on Monday in the
overall model. So the model is saying to expect some relief. We can expect some
up side movement. Naturally, this is based on Friday’s data and with Monday’s
data things may change. But we should not second guess. We should take things
one day at a time.
On a personal note, I am now at
$8.4K. I am getting closer to starting My Journey. But I want to continue to
refine my trading strategy. I am getting there but I need a bit more time. And
finally, I received several emails about my political comments. I will skip the
rhetoric – I am an Obama/Clinton supporter. Case closed. I gather a number of
readers do not like my judgment. Obviously, I can say the same. So it is a draw.
Let’s move on.
While the markets were scary on
Friday, the model is telling me that we are seeing volatility and not to panic.
Friday was marked by a culmination of a bunch of negative news. Such is life.
Monday is a new day. Stay tuned and good luck.
---------------------------------------
Thursday, June 5,
2008:
Thursday was quite a day. The
S&P 500 was up 2%. The overall model had green as of this morning but the
half hour model had gone green Wed. afternoon. I was long as we started the
day. However, because the day started strong, the last slice (4 pm) of Wed.
went from red to green. That happens because the last slice in a sequence is
controlled to a certain extent by the next slice. Such is life.
So what about Friday (tomorrow)? As
we start Friday we should be long. The long position should be converted to a
short position around 11 am Friday. For those who are really paying attention
you will recall that on Wed. we were looking at 4 days of green directly ahead.
And why are we not seeing green after Thursday’s trading. Simply put, today’s
strong up move is interpreted by the model as satisfying, to some extent, the
up movement it was looking for. So for now we have some red taking hold of the
situation. In fact, if we have a drop of about 40 Dow points after the first
hour of trading, the model will move the down reversal point to today’s last
slice (i.e. 4 pm Thursday).
There is a lot of instability in the
market of late. It makes the forward analysis that much more difficult. But in
the end, if one puts aside one’s emotions, success will follow. I am still
working on controlling my emotions. And speaking of emotions I had someone
write to tell me that I should keep my political comments to myself. They show
‘poor judgment’ I was told. It was likely sent by a Republican who is not
thrilled with Obama. Must be someone who wishes to continue our
And what about this little known
event? On March 2 and 3 of 2008, someone visited
And let me finish off by telling you
about our neighbor to the north,
And finally, this is my site. I pay
for it. I maintain it. You are free to visit or not BUT don’t tell me I can’t
express my political views on it. It’s called freedom of speech.
---------------------------------------
Wednesday, June 4,
2008:
As we went into Wednesday (today),
the model was showing green (started at 4 pm on Tuesday). Well, we stayed green
at the 10:30 am slice but by 1:30 pm (2nd slice) the overall model
was back in red (down) mode. You can get a magnification of what happened by
looking at the bottom graphic (half hour model). You can see that the red
started at 12:30 pm today. You can also see that the half hour model turned
green at 3:30 pm. This would be a buying opportunity as the overall model is
green as of Thursday morning.
As a final point, you can see that
the model is constantly adjusting as new data is analyzed. I trade the overall
trend but I also use the half hour model to time my entries and exits. In addition,
I may trade the overall trend several times by getting in and then closing the
position (based on the half hour model) and then re-establishing the position.
I have learned that the trading strategy is very important. But it is not
always easy to be disciplined because of emotions. For example, I should have
closed out my long position today at 12:30 pm but I did not because of my
emotion. And then I held the position until the end of the day because I was
looking at a ‘green’ Thursday. Stay tuned and good luck.
On a personal note, I am doing much
better. I am getting control of my emotions. I am following the model. As a
result I closed out today at $7.4 K. If this keeps up I will soon restart My
Journey. Stay Tuned. I am now looking at June 16.
---------------------------------------
Tuesday, June 3, 2008:
Congratulations, soon to be
President, Senator Obama. I always believed in you. And to Hillary – you were
impressive. I do hope you are chosen as the VP candidate.
Now let’s look at the market. Don’t
let today distract you. The model picked it off nicely. And now the model has
green for the next 5 days. While things can change, we need to take them as
they come and adjust as warranted. For those who are regular readers, I would
guess you have a very good idea about how to read the graphics. When you look
at the overall trend (top graphic), you see that the trend is now up. Stay
tuned. And good luck.
On a personal note, I am doing much
better. I am getting control of my emotions. I am following the model. As a
result I closed out today at $7.4 K. If this keeps up I will soon restart My
Journey. Stay Tuned. I am now looking at June 16.
---------------------------------------
Monday, June 2, 2008:
Monday was an interesting day. If
you read my comments on the weekend, you would know that all 6 issues were in
down trends as we went into Monday. The market took a hit which is in line with
the model but what is really interesting is that the strong down draft on
Monday seems to have cleaned out the negativity. If you look at the S&P 500
graphic, you will find that by the end of Tuesday (based on the overall trend)
or by early Wednesday (based on both the half hour and daily models) we will
reverse to the up side. So this down trend was strong but it looks to be short
lived.
On a personal note, I am doing much
better. I am getting control of my emotions. I am following the model. As a
result I closed out today at $7.1 K. If this keeps up I will soon restart My
Journey. Stay Tuned. I am now looking at June 16.
---------------------------------------
Friday, May 30, 2008:
It is Sunday. I have run all 6
issues through the model. You will find all the results (the graphics) below.
You will also find a link to get the complete PowerPoint file. So how does it
look for the coming week? For starters all 6 issues have red arrows as of
Friday. At this time this week is starting in a down trend. For most of the
issues a reversal to the up side will occur on Friday. A couple of them are
looking at Thursday. These comments also apply to AAPL and GOOG. Enjoy the
graphics and plan accordingly. Good Luck. And come back soon.
---------------------------------------
Thursday, May 29,
2008:
For those who are new to this page,
let me say a few words about what you can find here. Following my daily
commentary (this section) you will find 2 graphics. The top one is what I refer
to as the daily model. In fact the term daily is not correct because the model
considers 3 snap shots during the trading day. These are taken at 10:30 am,
1:30 pm and 4:00 pm (NY time). So when you look at the output you find 3 slices
for each day.
You should also note that the
graphic is divided in 2. The left portion is the past and the right is the
future. The past shows you where we have been (as computed by the model). The
future tells us where the model expects us to go (in terms of trend only). So
if we consider today’s graphic, we see that the 5 past days were all colored
green to indicate an up trend. And then we have on Friday (around mid day) red
taking hold. The red extends across the 5 day viewing window. This implies the
market is reversing to the down side. In fact, the reversal seems to have
already taken hold. I say this based on the lower graphic. It shows the day
divided into 13 slices (each half hour starting at 10 am). The graphic shows 1
past day and 2 future days.
If you look at the half hour graphic
carefully you find that today (Thursday) around 1 pm green turned to red and
the red stretches into Friday. I use the half hour model to time the start and
end of the overall moves. That’s why I have the reversal pegged at lunch time
on Thursday. I should add however that the results from the half hour model can
tend to change as new data is entered and so they are not of that much use to
you (because you cannot see the updates throughout the day). For example, as we
started today the reversal was looking to happen around 11 am. But because of
the market moving up, the model delayed the reversal until 1 pm. The overall
model is much more stable. It has been focused on Friday for the down side
reversal for the last few days. Why am I telling you all this? Because, you
should be focused on the overall model. In fact, if I was you, I would not
worry about the half hour model, for now. Your comments are welcome. Good Luck.
---------------------------------------
Wednesday, May 28,
2008:
I’m sorry about yesterday. I forgot
to upload this web page. I only realized it this morning. Well, I’m early this
evening – I want to make it up to you. So let’s look at the S&P500. The
overall model (top graphic) based on 3 data slices shows green going for 1 more
day and then on Friday we have red coming into the picture.
If you are looking at the half hour
model to time the reversal to the down side, note that it looks like the down
turn will start on Monday. I say this because Friday afternoon is green (half
hour) and red (daily). To initiate a move, the 2 models should be aligned. This
should happen on Monday. My plan is to go short on Monday according to the
models. But we still have some time before the reversal, so stay tuned. Good
luck to all. And thanks for your comments.
---------------------------------------
Tuesday, May 27, 2008:
As I’ve stated (yesterday) I am
using a very slightly modified version of the model. I am not going to show the
‘old’ results. I will only show the ‘new’ results. You can judge for yourself
where we are going. Stay tuned and come back soon. Good luck.
---------------------------------------
Friday, May 23, 2008:
It is holiday Monday evening and
before the trading week kicks off I want to share a couple of points with you.
Given the day, I want to thank all the military personnel who are risking (and
have risked) so much. Many have sacrificed their lives and many more have been
wounded. You are the heroes. On a personal level I have been against the
One point I want to share with you
is that I have made a small adjustment to the model. The reason for doing this
was to reduce fake outs. Remember, my objective is to succeed. So I need a
strategy that reduces fake outs because they are what keeps me from success.
My plan is to go with the ‘new’ (it
is not new – it is simply modified) model for both the daily and half hour
versions. On another note someone asked if I could publish a threshold level
for the upcoming slice of the daily model. That is a good idea – so here it is
for Tuesday. Remember, I am focused on the new model. On Friday the S&P500
closed at 1375.9. For a reversal to be initiated on the first slice (i.e. 10:30
am) of the overall model would require that the S&P500 be below 1373.8 at
10:30. However, for the reversal to take hold would require the S&P to
continue dropping. It should be noted that there are 3 slices in the daily
model. They are at 10:30 am, 1:30 pm and 4:00 pm. So a reversal can happen at 3
times and not just in the first slice. Such is life. Stay tuned.
On Thursday I mentioned that data in
the future window can change as new trading data comes in. That’s what happened
on Friday. If we recall Thursday, we closed out the day thinking that Friday
would be the start of an up move. Well when Friday began we had a strong down
draft. It put the green on hold. Friday’s early trading caused the last slice
on Thursday to become red and the first slice on Friday to also become red. But
even with Friday’s sharp drop, the model is un-nerved. The coming 5 days are
all green. So we are in an up trend that based on the past window began at the
second slice (1:30 pm slice) on Friday.
I should point out that it is very
useful to pay some attention to the past window. It gives us a very good idea
of what has been going on. If you recall, last weekend the model was looking to
the week to be a down week. Now look at the past week once analyzed by the
model. What we see is that the red began at the 1:30 slice on Monday and turned
green at the 1:30 slice on Friday. And yes we had a fakeout – the 1:30 slice on
Thursday.
Now, as we go into the week of May
27 we have green – let’s see where this takes us. Stay tuned and good luck.
---------------------------------------
Thursday, May 22,
2008:
Today. the model reversed to the up
side. If you look at the future window all you will see is green. Need I say
more. Now mind you, the boxes are green – as of today. But they are subject to
change as new trading data comes in. Stay tuned and good luck. Remember, on the
weekend I will analyze all 6 issues.
---------------------------------------
Wednesday, May 21,
2008:
Yesterday I thought we would not see
much more down side. At the close on Tuesday the overall model was still
pointing down but it was looking to reverse at the close on Wednesday. Well,
today’s down action has pushed the reversal to Thursday morning. And the half
hour model is in agreement. We now have in the future window 5 green boxes. So
the down trend is about to end for now.
Before I leave you, I wanted you to
know that the model is dynamic. Whatever you see in the future window is
computed based on little change. If however there is strong change taking
place, the model will react accordingly. One of the more interesting features
of the model is its cyclical ability. For example, consider Tuesday and
Wednesday. The market has been battered (the Dow lost over 400 points in 2
days). On the weekend the model said that this would be a ‘red’ week. But now
as we go into Thursday the model is reversing itself. It is looking for green
come Thursday morning. Remember I am pointing to the morning based on relatively
flat performance. If the market takes a drop on Thursday morning the reversal
will be pushed a bit further out. Stay tuned and good luck and let’s see what
this reversal will bring us.
---------------------------------------
Tuesday, May 20, 2008:
I will skip the commentary today.
But, I will tell you that the model did very well at picking the bottom today.
It keeps on amazing me. But of course there are negatives. One is that the
model readjusts as each new piece of data is analyzed. Thus, on Monday evening
it looked like the reversal on Tuesday would happen early on. It actually
happened around lunch time. This was in part a result of the down market. The
model held off. Before I let you go, I would like you to note that the red in
the future window almost disappeared today. I guess the drop was large enough
that the model now thinks there is not much left on the down side. Good luck.
---------------------------------------
Monday, May 19, 2008:
Monday was unbelievable. The upswing
at the start of the day caused a revision to the closing Friday results. So we
now have green at the close on Friday and that extends into Monday. But, by
mid-day Monday the trend was red again. We were premature with the start of the
down trend. It now looks like it started today (Monday) at mid-day. Note the
future window is all red. So in the short term we are looking at a down market
for the next week or so. It was amazing to watch the model today as it picked
off the reversal point (yes, before it happened). Stay tuned and good luck.
---------------------------------------
Friday, May 16, 2008:
As I stated a few days ago, I will
analyze all 6 issues on weekends when I have a bit more time to spare. So if
you scroll down you will find graphics for all 6 issues – yes that includes
AAPL and GOOG.
Let’s look at the 6 issues. The
overall trend for the S&P 500 is down until Thursday. Before I continue all
must understand that the projections are constantly being re-evaluated. And we
know that the model will react if it is warranted. When we look at the Dow
Industrial Avg. we find the equivalent results as those for the S&P. And
the 3rd index is the Nasdaq 100 which is virtually identical to the
other 2 indices.
As for the stocks we have AAPL and
GOOG with a couple of days of red boxes. By Wed morning they are looking to
reverse. And finally we have AKAM. It is now the weakest of the bunch. AKAM
went into a down trend on Friday and for the coming week all we see is red. So
AKAM should give back some of its gains (which were sizeable). Come back soon
and Good Luck.
---------------------------------------
Thursday, May 15,
2008:
Yesterday, I called the model
‘enchanting’. I mean it. Today I used the model to time my trade. I have
struggled of late because of a lack of discipline and because of a lack of
trading strategy. But I feel good this evening because I think I am starting to
master my emotions.
Let me replay what happened today. I
started today (Thursday) short the S&P 500 futures contract. Yesterday I had
the half hour model looking at a down draft for Thursday starting at about
11:30 am. Meanwhile, the daily model had us in a down trend. So I followed the
half hour model and closed my position (did not go long). Meanwhile, the daily
model at 1:30 pm (there are 3 points in the daily model) went positive but it
was clear it would be a short lived ‘one-day’ rally.
When you look at the daily graphic
below you will find that Thursday was in fact green and this coincided with the
half hour model. But on Friday morning both are going red. Yesterday it looked
like it was a part of the down trend and then today the model made it a one day
up trend. So today was one of those days. What I am really thrilled about is
how the model tracked the data. It was something to see. I want to go short the
S&P again on Friday morning and will do so if I can get to use my computer
(I will be traveling).
My strategy is coming together. I
use both models. I am not always invested. I use the daily model to decide
whether I will be long or short. I then use the half hour model to create a
position and to close it and then to reopen it. For example, on Friday morning
(assuming I can) I will go short based on the half hour model which will
validate the daily model. When the half hour model reverses (say on Monday) I
will close my short and wait. I will not go long if the daily model is still
pointing down. This was my big mistake of the past. I will not make it again.
Stay tuned and good luck.
---------------------------------------
Wednesday, May 14,
2008:
Today, I believe was a turning point
for me. You have listened to me (patiently, I hope) about formulating a trading
strategy. As I’ve stated on a previous occasion, the model is ‘enchanting’.
Yes, that is the word I will use to describe it. However, I have also
complained about the fact that I have yet to master how to use it. Well, today
I took a big step forward. I won’t go into the details at this time but I feel
I am on the verge of having found a viable trading strategy. Stay tuned because
I think you will find the model/strategy interesting.
Before looking at today’s trading, I
want to thank all of you who have written to me. I know there are quite a few
who follow AAPL and GOOG. That made me think. I am not updating them because of
time constraints. However, I do have some time on the weekend. So guess what. I
will update all 6 issues on the weekends. I will also make accessible the Power
Point file for the entire week. While it is not the best solution, it is a
partial alternative, nonetheless.
What about the markets, you ask. If
you look at the graphics, you will find that today (mid-day) we had a reversal
to the down side. The model advanced the reversal to the down side because of the
sharp opening up move. Remember, the model has elements of analyzing ‘cycles’.
If you look at the daily model (top graphic) you can now see that the future
window is completely red. This means that the up trend we have experienced
during the last few days has come to an end. Good Luck to all and come back
soon.
---------------------------------------
Tuesday, May 13, 2008:
Before looking at the market at the
close on Tuesday, let’s look at it as of the close on Monday. Following this
paragraph is my graphic from Monday. There is also a graph I found on
MarketWatch which shows the hourly moves of the S&P as of the close on
Monday. So, both graphics end at the close on Monday. The comparison of the 2
is interesting
Enough with the past. Let’s come
back to reality. Today’s graphics (Tuesday) are found in the usual place. Look
at the daily graphic (the top one). You can see that the green slices are
moving from the future window to the past. Red is about to fill the future
window. So come Thursday we will enter a down trend. Now isn’t this
interesting. Good Luck.
---------------------------------------
Monday, May 12, 2008:
As we saw on the weekend, the daily
model is looking for some up movement. Today, we got some relief with the Dow
up 130 points. This up trend started on Friday and is now extending into
Thursday. You will note that I now show the daily model with 3 slices. These
are generated at 10:30 am, 1:30 pm and 4:00 pm
On a personal note I am coming to
realize that I cannot trade the half hour trend. I thought I could – but I
can’t. So my next step is to trade the daily trend and to use the half hour
model to refine the timing for getting in and getting out. This will reduce my
trading and should make it easier to perform. As I’ve stated so many times,
succeeding requires discipline and a strategy (in addition to a model). I have
really worked on the model and I am happy with it. Now, I need to work on ‘me’.
I am targeting June 1 as the start of My Journey. Stay Tuned and Good Luck.
Before I let you go, I want to share
one of my conclusions with you. The markets move too quickly and too abruptly.
To reduce this effect requires that one trade over a longer time frame. The
trades generated by the half hour model are typically less than a day in
length. That is too fast. So as I stated above, I will now trade the overall
trend and will enter and exit each trade with the help of the half hour model.
The next couple of weeks should tell me if this is the strategy I am looking
for. I hope it is because I am running out of ideas.
---------------------------------------
Friday, May 9, 2008:
It is Saturday as I write these
comments. Friday was an interesting day. The markets were down but it could
have been worse. I am convinced, more than ever, that what I need is
discipline. For me the model is now ‘enchanting’. It does not cease to amaze me
at how well it picks up the trends and, even more importantly, how well it maps
them into the near future. If I do not succeed, I will not be able to blame the
model.
Some have asked me to bring back the
analysis for AAPL, GOOG, etc.. I cannot at this stage. I am overloaded with
work. Maybe in a few months when my situation is more stable. I want to thank
all those who have written with comments and suggestions. I didn’t think there
were so many readers.
As of today, I have updated the
results you see from the daily model. While I refer to it as the daily model,
it is in fact a model that assesses the data 3 times per day. You should note
that the half hour model looks at the day at 13 different times. Up to now I
was showing the results on a daily basis but, in reality, the day was cut into
3 segments. So I will show the complete results. The first slice is analyzed at
10:30 am, the second slice is analyzed at 1:30 pm and the third slice at 4:00
pm. These are all New York times. So when you look at the daily model you will
get a better idea of when things happened (or will happen). As an example,
let’s consider Friday. We have the daily model reversing from the down to the
up at 1:30 pm (the second slice). The values of the index that are shown are
closing values. As before, the half hour model is used to show the ‘secondary’
movements within the primary trend. Stay tuned and good luck.
---------------------------------------
Wednesday, May 7,
2008:
Oh, what a day. I went into
Wednesday short the S&P 500 (at 1422). I am following the bottom graphic
which is generated by the half hour model. Things were looking good. The market
was down about 90 Dow points around noon, and it looked like the model would
reverse in an hour (or 2). So I jumped the gun and went from short to long.
Well, guess what? The model did not reverse (and you probably know why). It
reversed only at the close (assuming a stable open tomorrow). Note the green
half hour slice at the close on Wednesday.
My worst enemy has been not
following the model and jumping the model. I am upset with myself because I see
so much potential but I seem to waste the opportunities because of my lack of
discipline. Even with today’s shave I am at $6.4K. However, I will not start My
Journey until I have the confidence in myself. At this point I have confidence
in the model. As for myself, I need a bit more control over myself. I need to
improve my discipline.
Enough about my problem, let’s get
back to the market and specifically to the S&P 500 as of the close on
Wednesday. Well the daily model is starting to look real good. As a matter of
fact if we couple the daily and half hour models we can see that the coming 5
days will be in an up trend. So don’t let today’s drop fool you. The trend is
just reversing to up. Take advantage of it and come back soon. Good luck.
---------------------------------------
Tuesday, May 6, 2008:
I will defer from making comments
tonight. I am caught up with the Dem. primaries. My congratulations go out to
Barack. Some of the regular readers know I strongly support him. Good luck to
all.
---------------------------------------
Monday, May 5, 2008:
Monday was a ‘strange’ sort of day.
From what I can see, the market was up early and then it was down and it stayed
down. As we went into Monday we had the overall trend as down and then up on
Tuesday and down on Wed. etc.. The markets are confused and it is showing on
the fluctuations in the overall trend. At the close on Monday we have for the
overall trend in the future window 2 green boxes and then red boxes. So we
still have fluctuations.
Now when we look at the half hour
model we find that Tuesday and part of Wednesday are red. So the daily model
says up and the half hour model says down. Someone wrote to me and asked about
this. All I can say is, such is life – there is instability. On a personal note
I am now following only the half hour model as I trade the S&P 500 futures.
Trying to follow both is simply not possible – that’s my conclusion. Stay tuned
and Good Luck.
---------------------------------------
Friday, May 2, 2008:
Today is Sat. May 3 as I write this
commentary. As I stated on Thursday, I am revising what I am posting. For the
time being I will only cover the S&P 500. For my rationale, read what I
wrote on Thursday.
I am very close to starting My
Journey. I am nailing down my trading strategy. It now looks like I will simply
trade based on the half hour (HH) model. I will not use the daily model. But
note, not because I don’t like the results because I do like them. However,
when trading futures and when one is trying to optimize performance, I will
need to trade in a refined manner hence the HH model.
On a personal note, I am very
confident. I think that once I get myself aligned in the next couple of weeks,
the sky will be the limit. So stay tuned. And many thanks for your comments.
They are much appreciated. Suggestions are very helpful. Thanks again.
---------------------------------------
Thursday, May 1, 2008:
Today was May 1. I think it was a turning
point for me. I was at home and I had the opportunity to watch the market and
assess my performance. Let me start with myself. I blew it. Why? Because, I did
not take my own advice which I wrote on this page yesterday. Look below at what
I wrote on Wednesday. I held onto my short all day – a costly mistake. But as
the day was unfolding I realized that I am trading short term and I am being
blinded by the daily model. The daily model was wrong as we went into Thursday,
but the half hour (HH) model had it right.
In fact, the half hour model is rarely
wrong. It is quick to align itself to the current trend. I didn’t reverse my
position this morning because the daily model was pointing down. I said to
myself “Forget the half hour model. The daily model is pointing down.” Had I reversed my short this morning and gone
long, I would be at $8K. Instead I am at $5.9K. incidentally, this has happened
to me a number of times during the last time. Today’s was one of the more vivid
examples.
I have been struggling with
developing a trading strategy. Today opened my eyes. I reached several
conclusions today:
1)
I
will only follow the S&P 500. Many of you probably realize that it
represents the other issues quite well.
2) I will only generate the graphic for the half
hour model. This will simplify my life tremendously at a time when I need
to devote more time to my trading
strategy.
3)
I
will trade the S&P futures based on the HH model.
I believe that this strategy will
allow me to be most productive. If you look at the HH graphic for the S&P
that I produced on Wednesday you see that the model had green taking hold at 11
am on Thursday and extending into Friday. The revised graphic produced at the
close on Thursday is immediately below this commentary. What we find is that
the model advanced the down reversal to 3 pm Thursday afternoon and is looking
for all of Friday to be red. On Friday (or whenever the model says to) I will
reverse my short position into a long position. I hope that today I finally
nailed down a viable trading strategy. Remember, I am not looking for an
investment strategy, I am looking for a trading strategy.
My objective remains to take 5K and
build it into one million by trading. As soon as I have finalized my strategy I
will officially begin My Journey. I have resisted doing so because I realize
that I have yet to develop a strategy I am happy with (comfortable). However, I
do hope that what I learned today will form the basis of the strategy I am
looking for. Stay tuned and Good Luck.
---------------------------------------
Wednesday, April 30,
2008:
It is Wednesday evening. The model
told us that we have some red directly ahead. Today we saw a sharp runup in the
market and then we saw it given back. In fact, if you look at the half hour
model you see that someone who is using the 2 models in coupled mode would have
gone short at lunch time. That’s what I did. And given the half hour model I
will close the position Thursday morning. I am also contemplating going long at
that point in accordance with the half hour model. And then on Friday morning I
will reverse my position and go short. This kind of trading is proving to be an
interesting strategy. I hope to make it my dominant strategy for trading
futures.
Let’s look at the 6 issues and
summarize where we stand. The Dow and the S&P500 are essentially identical.
They are looking to reverse to the upside on Tuesday May 6. Meanwhile, the
Nasdaq 100 has red until the end of next week. AAPL is like the Nasdaq 100 and
so is GOOG. And finally we have AKAM and it too is like the Nasdaq 100. So AAPL,
GOOG and AKAM have at least 5 red daily boxes in the ‘future’ window. Now isn’t
this exciting. Stay tuned and good luck.
---------------------------------------
Monday, April 28,
2008:
When you look at the top graphic for
each issue you see that the next five days are basically red for 5 issues. The
exception is GOOG. It has a couple of green boxes before red appears. So the
current week is not shaping up as a good one for the longs. Stay tuned and good
luck to all.
---------------------------------------
Friday, April 25,
2008:
Because of a very busy schedule this
weekend I will defer my comments to another time. I will let you may your own
conclusions. Good Luck and come back soon.
---------------------------------------
Wednesday, April 23,
2008:
Thanks to everyone who wrote to me.
I was actually surprised at how many there were. I received many useful
comments. I will try to act on them soon.
At this time the markets are
confused. I am actually having difficulty trying to figure out what is happening.
We are see changing attitudes. As an example look at the Dow. We had green for
Thursday but then we are looking at red on Friday (and Monday) and then we have
one green and then one red, one green and … There is indecision in the air.
Stay tuned and good luck.
---------------------------------------
Tuesday, April 22,
2008:
We went into Tuesday with me saying
that we are in a down trend. That’s what I said and the markets were down a
fair amount today. However, the consequence of today’s decline is that the
remaining down trend has been shortened. If you look at the graphics, you can
see that the daily model only has 2 red days remaining. You probably know that
this does not mean the days will be down – it simply means that the overall
trend is down. So by Thursday afternoon we are back into an up trend. The green
starts in the half hour model and continues in the daily model.
What about the 3 stocks – you may be
asking. AAPL’s drop today (Tues) has changed AAPL’s fortunes. It is negative on
Wed but then after the earnings AAPL will be positive (on Thursday) like the
markets. GOOG and AKAM are comparable. The daily trend will reverse to the up
side on Monday. Today GOOG was up a fair amount. According to the model that
was not justified. So we may see GOOG give back some of the gains it made
today.
And finally you may recall that I
said yesterday that AAPL’s gain was not justified. Well, today it gave back the
gain as I had suggested it should. The good news for AAPL diehards is that AAPL
is about to reverse to the up side. Stay Tuned.
---------------------------------------
Monday, April 21,
2008:
I will be brief. Today, the daily
model took hold of red. Now mind you, based on the half hour model, the down
trend started on Friday afternoon. But now it is in full swing. It will last
until the end of the week. When we look at the individual issues we have them
all in a similar position and that includes AAPL. However, today AAPL shot up
dramatically (up $6). But, the model has not changed its outlook for AAPL. So
how do I interpret this?
I think AAPL will give back today’s
gain and more. I think it will go down after the release of earnings (and maybe
before). The model is saying down. I believe it. So don’t expect much from AAPL
in the coming days. Today’s up move is one of those events (upgrade) that is
not predictable. But now that the model knows of it, the model is maintaining a
down trend for AAPL. Good Luck and Stay Tuned.
---------------------------------------
Friday, April 18,
2008:
Isn’t it impressive. Last Friday we
were down in the dumps. The market was down 250 points in part because of GE.
Everyone was worried. This is a portion of what I wrote then – the 11th
(scroll down to see the entire text):
For
the 3 indices we have green in the overall trend (top graphic for each issue)
for the entire week. Friday’s drop has been digested by the model. Its response
has been to increase the length of the up move. So my interpretation of what
happened on Friday is that it was a drop that occurred in an overall up trend
and NOT the resumption of the down trend. My guess is that by the end of the
week the Dow will have recovered all of Friday’s drop (and probably more).
So when you look at what I wrote
last Friday evening you find that I said this week would be green. And
furthermore the drop of 250 points would be recovered during the coming week.
Well, I was right. So let’s move on and analyze the current state of affairs.
This morning (Friday -18th)
was interesting. The model was showing a reversal to the down side Friday
morning (half hour model). The daily model had signaled at the close on
Thursday that a reversal was being formed. But then Friday morning came along.
The up move was strong enough that the reversal got pushed to lunch time. So
what we ended up with was a reversal to the down side for all 6 issues. The red
started on Friday (lunch) and it carries into Monday when the daily model takes
over.
This has been a truly amazing ride
(the last month or so). I am finalizing my trading strategy. I will put aside
options and only focus on futures (for the indices, especially S&P500). At
this time I am very confident that I can do what I set out to do. When I start
My Journey I will post my trades on this web page. You will get the opportunity
to see in real time my progress (and I hope it will be progress and NOT a lack
of it).
And finally I want you to be aware
that the coming week is populated by a string of red. So we will give back some
(maybe even all – this time I do not know) of the gains that were made this
week. Incidentally, even GOOG is in this boat and so is AAPL. The down trend
for all 6 issues started around lunch on Friday. Based on what we can see the
down trend will dominate throughout the week. How strong will the down trend
be. I don’t know. However, it is clearly visible. Let’s revisit these
statements next weekend. In the meantime, Stay Tuned and Be Brave.
---------------------------------------
Thursday, April 17,
2008:
Today (Thursday) was a quiet day for
a change. But then after the close GOOG blew the lid off. Earnings as you are
aware can cause large swings. I do not take positions in stocks when earnings
are to be released. Let’s put this aside and move on.
The 3 market indices I follow today
went into down trends. In actual fact they will go into down trends on Friday
mornings if we use the half hour model (bottom graphic for each issue) to
pinpoint the move. In addition to the 3 indices, we have AAPL which is
virtually identical to them. It too goes into a down trend Friday morning. That
leaves us with GOOG and AKAM. Based on the daily model they will go red on
Friday. You can use the half hour model to pin point when in the day. I realize
these are just estimates but they are better than nothing.
So the bottom line is that on Friday
all 6 issues will be pointing down. Now isn’t that exciting. Stay Tuned and
Good Luck.
---------------------------------------
Wednesday, April 16,
2008:
Think back to last Friday.
Everything seemed to be falling apart. The Dow was down 250 points. And what
did the model say: ‘Don’t worry – be happy’. Well not quite. But it did say
that the coming week would be dominated by green. And today (Wednesday) the
market shot up by a similar amount to what it lost on Friday.
Timing is so important to succeed.
It is so important if you want to keep your sanity. The model is doing so well
– it has me baffled. Enough already, let’s discuss what the model now sees.
First of all, today’s sudden jump has caused a significant change to the outlook
for the coming days. Yesterday it looked like the reversal would occur early
next week. But now (as of Wednesday evening) the reversal to the down side is
set for tomorrow – Thursday. In addition, if you look at the half hour model
(bottom graphic for each issue) you will see that the reversal to the down side
is set to occur around lunch time on Thursday. This applies to all 6 issues.
Even GOOG which is slightly different also has a sell on Thursday afternoon. So
the current up move has run its course. We are now starring at a down trend for
the next few days. Stay Tuned and Good Luck.
Finally, I noticed that someone on
the AAPL (Google board) made a reference to my work. Actually, (s)he gave me a
whole thread. Thanks for the plug. And, keep your eye on AAPL. You may find
that Risky (a poster on the board) will have something to cheer about in the
next few days. I hope that someone reads this and tells him that this is coming
but that does not mean the end of the world. We take things one day at a time.
Remember, yesterday I told you to enjoy the upcoming up side. Today, we got our
up side. Now we need to stand up and deal with the down side. Hopefully it will
be shallow and short lived. Be Brave.
On a personal note, I will short the
S&P500 futures at lunch time on Thursday.
---------------------------------------
Tuesday, April 15,
2008:
On Tuesday the markets were up and
then down but ultimately finished up. The swings were modest. On Monday evening
I posted the updated graphics but no commentary, so you had to make up your
own. I hope that was alright.
If you recall after last Friday’s
close I said that this week would be dominated by green daily boxes. I am glad
Friday’s decline did not continue (for now anyway). When we look at the
graphics below (the top one for each issue) we find that green extends until
about Tuesday of next week. So relax and enjoy the upside – you deserve it. And
don’t forget another wave of selling is only 4 days or so away. Such is life.
However, I cannot comment on the size of the moves – just the direction. At
this stage though I have become very much at ease with myself (and the model).
In the next couple of weeks I will restart My Journey. Stay Tuned and Good
Luck.
---------------------------------------
Monday, April 14,
2008:
I do not have time to add my
comments now. Will try to do so later. Meanwhile enjoy the graphics. Good luck
and come back soon.
---------------------------------------
Friday, April 11,
2008:
Friday was a disappointment for the
longs. And given that the model (daily) had the overall trend as up, the drop
on Friday was ‘painful’. However, you simply cannot use one day of data to
describe a model. Incidentally, the half hour model was pointing to a drop in
the afternoon. But let me not look for excuses. Let’s be honest and say it the
way it is. The model had the indices in up trends but the move on Friday was
down. So the model was wrong BUT it was wrong for the day and NOT for the
overall trend. That decision has yet to be made. An overall trend comprises
both up and down days and is defined by the net overall change – not micro
changes. Enough rhetoric. Let’s look at the coming week.
For the 3 indices we have green in
the overall trend (top graphic for each issue) for the entire week. Friday’s
drop has been digested by the model. Its response has been to increase the
length of the up move. So my interpretation of what happened on Friday is that
it was a drop that occurred in an overall up trend and NOT the resumption of
the down trend. My guess is that by the end of the week the Dow will have
recovered all of Friday’s drop (and probably more).
I received an email from someone who
asked me if I could expand the half hour results to show results for TWO days
into the future. Excellent idea. I decided to keep one day in the past window
and have 2 days in the future window. So I went back to my previous post of the
page and amended it to include the new graphics (and of course this paragraph).
Enjoy.
And what about AAPL, GOOG and AKAM?
Guess what. All 3 are comparable to the indices. There is green for the entire
week. All in all the coming week looks good. I know that is contrary to most
other views. But, I trust my model more than any other I am aware of. In fact,
I noted a site http://www.alphaking.com
that pointed to a reversal to the up side on Thursday for all the six issues
that I follow and then by the close on Friday did a flip-flop back to the down side
for all 6 issues. So we have alphaking with all 6 issues pointing down and I
have all 6 issues pointing up (in the near term). It will be interesting to see
how this plays out.
How do the other 2 models stand
after Fridays drop. The results are shown below. Stockpickreport made no
changes to its 6 ratings as a result of Friday’s down draft. Now mind you, 4 of
the 6 ratings were ‘sell’. They had ‘buy’ ratings for GOOG and AKAM and they
remained. Meanwhile, americanbulls had a ‘buy’ label for the Dow and the
S&P500. On Friday they added a ‘sell-if’ to both for Monday. Also, AAPL had
a ‘sell’ with a ‘buy-if’ going into Friday. Well you guessed it, the ‘buy-if’
got wiped off. Meanwhile, the Nasdaq100, GOOG, and AKAM remained unchanged with
‘sell’ ratings. It looks like I may be standing alone as early as Monday. AB
could easily have all 6 issues pointing down if Monday morning is down, and SPR
may also be predominantly down (only GOOG and AKAM were pointing up at the
Friday close). And, of course, alphaking has all 6 issues pointing down. Wow.
This is really quite a challenge. I will make it a point to review this posting
next weekend to see how things went. What do you think will happen? I read, on
occasion, the AAPL (Google board) but do not post there. However, if you want
to post your comments there, you are welcome to do so.
|
|
Hybrid Timing Model |
||
|
Dow Industrials |
UP |
buy (sell-if) |
sell |
|
S&P500 |
UP |
buy (sell-if) |
sell |
|
Nasdaq 100 |
UP |
sell (buy-if) |
sell |
|
AAPL |
DOWN |
sell |
sell |
|
GOOG |
UP |
sell (buy-if) |
buy |
|
AKAM |
UP |
sell |
buy |
If you have been following my graphics
for a while, I would be very much interested in knowing what you think and how
you are using the info. Be Brave. Good Luck. Stay Tuned.
---------------------------------------
Thursday, April 10,
2008:
If you are one of those who has been
following the graphics for the past few weeks you may have noticed how accurate
the model has become. It has me fascinated. I am thrilled. And, I am grateful
to the Almighty for giving me the insight (and perhaps even helping me – if
that is possible – although I can choose to believe that it is). I am just
about at the point where my investing is mechanical. My aim is to do that.
Anyway, let’s get to the markets.
I am finding it truly amazing how
all 6 issues are similar. They are all in up trends until late next week. The 3
market indices and the 3 stocks are all moving together.
Now let’s look at tomorrow. We have
red coming into the picture in the afternoon (check out the bottom graphic of
each issue). But some will say, we are in an up trend. Correct. But within the
overall trend we have pockets of opposing trend. If you trade futures (on the
market indices), this is a terrific feature that I am pinning high hopes
on.
If you have been following my
graphics for a while, I would be very much interested in knowing what you think
and how you are using the info. Good Luck. Stay Tuned.
Before leaving I want to compare
what I was saying at the close on Thursday with several others. I have
mentioned 2 commercial websites that generate analyses for stocks (and indices).
At the close on Thursday (April 10’08), this is how the ‘Hybrid Timing Model’
stacked up against the 2 other models on the web. I will leave you to draw your
own conclusions.
|
|
Hybrid Timing Model |
||
|
Dow Industrials |
UP |
buy |
sell |
|
S&P500 |
UP |
buy |
sell |
|
Nasdaq 100 |
UP |
sell (buy-if) |
sell |
|
AAPL |
UP |
sell (buy-if) |
sell |
|
GOOG |
UP |
sell (buy-if) |
buy |
|
AKAM |
UP |
sell |
buy |
---------------------------------------
Wednesday, April 9,
2008:
Yesterday I said: “I will be brief
today – I have a cold.” Well I am still sick. But life goes on. Today was a good
day. I closed out my shorts and am back at $7K. I am getting my confidence back
and I am applying the model with less emotion.
If you have been following the graphics for the 6 issues I analyze, you
will know that a reversal to the upside ‘officially’ occurred today
(Wednesday).
All 6 issues look quite comparable.
For some of them there is a bit of instability (indecision) for Thursday – but
that’s the market for you. And now as we go into Thursday all 6 issues are
pointing to the up side. Now isn’t that exciting. Good Luck. Stay Tuned.
---------------------------------------
Tuesday, April 8,
2008:
I will be brief today – I have a
cold. If you have been following the graphics for the 6 issues I analyze, you will
know that a reversal to the upside will ‘officially’ occur tomorrow
(Wednesday).
The first 5 issues (the Dow, the
S&P 500, the Nasdaq 100, AAPL and GOOG) are all similar. What we find is
that the half hour model will go to the up side around lunch time tomorrow
(Wed.). That green will carry us into Thursday where we find green in the daily
boxes.
The only issue that is slightly
different is AKAM and that is because the half hour model flashed a buy (green)
at 1:30 pm today (Tuesday). That green carries across Wed. and bridges with
green of the daily model. So as we started Tuesday all 6 issues were pointing
down. And now as we go into Wednesday all 6 issues will reverse to the up side.
Now isn’t that exciting. Good Luck. Stay Tuned.
---------------------------------------
Monday, April 7, 2008:
Monday was another one of those days
that featured indecision. The market went up and then came back to the
baseline. As we entered Monday, you may recall the model had the markets in a
down trend. Moreover, the half hour model made the point that the markets are
confused with green at mid-day and red by the end of the day. While the
forecast was not perfect, it was reasonable.
Let’s look at Tuesday. If we look at
the 3 indices we find that they are looking at a trend that has 2 more red
daily boxes. And then on Thursday the indices will go into up mode. But for now
we are facing red. Moreover, the half hour model (bottom graphics) has red
across Tuesday. Based on what I see in front of me, I would anticipate a
sizeable drop during the next 2 days to make this move a ‘winner’. If you look
at the daily graphic for the Dow you can see that this down move so far has
yielded little. It is for this reason that I can see a drop of a couple of
hundred points in the remaining 2 days. But that is pure speculation on my
part. It is simply based on past observations in similar circumstances.
Now let’s move on to GOOG and AKAM.
They are comparable. They each have 3 red daily boxes directly ahead. Both are
looking to reverse to the upside on Friday. On Tuesday, GOOG is all red based
on the half hour model. For AKAM we have green Tuesday afternoon.
And finally, what about AAPL? Its
red stretches for the rest of the week. Don’t let Monday’s up move throw you
off. For Tuesday, the half hour model is also red. So AAPL has gone up a fair
amount and it will linger and give back some of these gains during the week.
---------------------------------------
Friday, April 4, 2008:
Another interesting week has come to
an end. I am glad that it has because it has been tough. There is much
volatility and indecision. Let’s put it behind us and let’s look at next week.
The 3 market averages (the Dow, the
S&P 500 and the Nasdaq 100) I follow are almost identical. In fact, the
Nasdaq 100 is a bit stronger in that when you look at the top graphic for each
issue you find it has 4 red boxes while the other 2 have 5 red boxes. But all 3
indices are looking to reverse to the up side next Thursday (the 10th).
They are currently in down trends. Another point to note is the bottom graphic
of each of the 3 issues. This graphic is based on half hour data. What you find
for Monday is red with a pinch of green (3 or 4 green half hour boxes) followed
by red. Again this shows the indecision. In fact, we had a similar scenario on
Friday with the exception that the green stretch of boxes in between the red
was longer. The model actually predicted this on Thursday evening. And on
Friday the market actually performed this way – in a notable way.
Let’s now look at AAPL. In the
overall trend, its green ride has run its course. You can see starting Monday,
4 red daily boxes and then when you look at the bottom graphic based on half
hour data you see that AAPL turned red at 2pm on Friday. The red extends into
Monday. Thus, a strategy might be to short AAPL starting Friday afternoon until
next Thursday or Friday (tentatively, of course). Alternatively, one may simply
sell some holdings with the hope of buying back at a lower price.
Looking at GOOG we can see that the
overall trend turned negative a couple of days back. And the red continues
until next Thursday. On the short term model (bottom graphic) we had GOOG as
green on Friday (as of 10:30 am). The green extends into Monday morning but
then the red takes hold again and GOOG resumes its down trend.
And finally we have AKAM. On the
overall trend (top graphic) it is like AAPL. In addition it is also like AAPL
on the half hour model (bottom graphic). So naturally that is interesting – to
have AKAM latching onto the AAPL trend. On Friday at 3 pm AKAM turned negative
in the half hour model (bottom graphic). This down turn carries it into Monday.
When we look at the overall trend, we see that AKAM like AAPL has 4 red daily
boxes coming up.
So the bottom line is that we are in
a down trend (all 6 issues) that will take us to the end of the week (let’s say
Thursday close). Beyond that I don’t know but if you come back on a daily basis
you will be able to follow the progress. Finally, I am putting off the
‘official’ start of My Journey until May. In the market, patience is a virtue.
I wish I had more of it. But, I am working on it. Good luck to all and Stay
Tuned.
---------------------------------------
Thursday, April 3,
2008:
At the close on Thursday we have the
indices showing as red in the overall graphics (top ones). The first green
appears in the next Thursday (10th) box. With regards to Friday
based on the half hour model, you will see that the day has red, then goes
green and then finishes with red once again. There is indecision in the air. On
a personal note, I will hold my short S&P position (entered at 1375.25).
What about AAPL? Much has happened
to it in the last 3 days. On Monday it was at 143 and by Thursday it was at
152. The overall graphics show some red next week but there is not a strong
pattern. Moreover, the half hour model has both green and red. Once again,
there is indecision in the air. With regards to GOOG, it is like the market
averages. The trend is down until the end of next week. And finally for AKAM,
it is in an up trend that will come to an end later on Friday (the 4th).
At that time the lower graphics turns red going into Monday and then on Tuesday
the overall trend turns red. So AKAM has had its run up and is now ready to
take a break for a few days. Good luck and stay tuned.
---------------------------------------
Wednesday, April 2,
2008:
The graphics are now up to date. You
will note that the current up trend for the markets is looking to come to an
end on Thursday (the 3rd). In reality, the down move started today
(Wed) around lunch time. This is because when you look at the half hour model
(the bottom graphic for each issue) you see that red appeared on Wednesday
(around lunch) for all 3 issues.
Meanwhile, GOOG is like the market
averages. The reversal to the downside started today (Wed) around lunch time.
AAPL is a little bit different but not much. By Monday we will be looking at a
reversal to the down side. And finally we have AKAM. It is like GOOG. The
reversal to the down side started around lunch time on Wed. The overall trend
is about to reverse to the down side.
On a personal note I am still short
the AAPL call spread. This afternoon I shorted the S&P500 futures. The half
hour model flashed the short term down – and the daily model is looking to
reverse to the down side tomorrow. However, when the half hour model reverses,
I will close my futures position and wait to get back into the position when
the half hour model gives the signal. Naturally, I am assuming that the daily
model is cooperating. So I will wait and see where I will go. Stay tuned and
good luck.
---------------------------------------
Friday, March 28,
2008:
To close off this week, I would like
you to go to the comments of Tuesday, March 25 that you can find below. At that
time, I told you that the rest of the week did not look good. Those that follow
the markets know that was the case. So what’s the outlook for next week. Keep
reading.
Let’s start with the 3 market
indices. I follow the Dow, the S&P500 and the Nasdaq100. What I am seeing
is that the overall trend continues red for most of the coming week (first week
of April). But there is hope. The first green box in the overall trend has now
appeared in the ‘future’ window. It is located on the Friday April 4 box. So we
have to get by 4 red boxes first. Below each of the daily trend graphics (top
one for each issue) is the half hour graphic. It gives you an idea of how the
upcoming day is shaping up. Moreover, it gives you an opportunity to ‘fine
tune’ an entry and an exit from a position. If you look at the Dow or S&P
you see that a good part of Monday is looking green based on the short term
half-hour model. This data is of use if you trade on a daily basis. If you
don’t, then this half hour model is of use only when you initiate or close a
position. For example, if we look at next Friday and see green we can time that
with the half hour model. The actual buy may come on Thursday, Friday or
Monday. Typically, we should look at the green in the half hour model to
validate the daily model. So, if on Thursday afternoon at 2 pm the half hour
model goes green and the daily will be green on Friday, then the buying point
would be on Thursday afternoon.
Now what about AAPL. Incidentally, I
shorted AAPL a couple of days ago when AAPL was at $145. I did so by getting
into a credit call spread (the April 145 and 150). I am short the 145 call and
long the 150 call (only 5 contracts of each). I received a credit of $2.30. I
have watched AAPL go up and I’ve watched it go down. But, in the end AAPL is
moving with the markets – look at the overall trend graphic. It does not
necessarily align on a daily basis. Look at Friday, AAPL was up and the market
was down. But then if you look at Thursday, AAPL was down substantially and the
market was flat. At this point, my account is at about $7K. I went back into
the archive on this page to see what I wrote and found that on Wed Feb 13 below
I was at $6.2K. So the last month and one-half has not been kind. As I said, I
am now only at $7K. Such is life. The volatility has been too extreme.
Nonetheless, I survived and if I can get a better handle (become more
comfortable) on how to use options (coupled with futures) I will be on my way.
What about GOOG. On Monday, it takes
on the appearance of the markets. By the end of the week, it too will reverse
back to green. And finally, AKAM is similar to GOOG on the overall trend. It
like GOOG and the markets are looking to a red week with green appearing on
Friday. So while the coming week doesn’t look good, it will become better by
the end of the week. Stay tuned and luck.
---------------------------------------
Thursday, March 27,
2008:
Unfortunately, I am tied up this
evening and will not write this column. However, I have updated the graphics. I
will let you draw your own conclusions. But you should note that today’s action
is simply an example of what the model has been saying. The next week or so
will bring more of the same. You know as well as I do that there will be up
days and there will be down days. The overall trend is precisely what the label
implies – it is the dominant trend. And at this time the overall trend is down
(for the markets). So, stay tuned and
good luck.
---------------------------------------
Wednesday, March 26,
2008:
As I stated in the past, this market
is not for the faint of heart. There is way too much anxiety. Many are in some
state of ‘shock’. They are under pressure and they are acting irrationally.
Speaking of acting irrationally,
let’s look at Hillary and J.P. Morgan. Hillary was ducking bullets as she ran
off the runway with her daughter in toe. She joins fellow NY’er – say one thing
but do something else. When are these people going to get their acts together.
And even her daughter Chelsea disappointed me. She was asked about the Monica
incident – her reply – none of your business. The
And what about J.P. Morgan? They too
were claiming to be dodging bullets coming from Bear Stearns. Well, there’s
another example of misrepresentation. They valued BS at $2 and then turn around
and offer $10. What the hell is going on?? This is outrageous. You can’t trust
anyone any more. Bill was playing with cigars in the White House. Hillary was
dodging bullets.
At the close on Tuesday (yesterday)
I wrote: “After Monday’s close I said that we should not expect net up side
movement for the rest of the week. We have the daily model being populated in
the ‘future’ window of the graphics by red boxes. And as this is happening we
have the half hour model holding on to red. This is true for the indices and
AAPL. GOOG is a close cousin and AKAM is only slightly different in that it is
a bit delayed in its behavior.
It would appear that we are being
set up for another wave of selling. I have no idea of the magnitude. It may be
a non-event or it may be sizeable.” Today (Wednesday) I feel the same. We are
entering a period (5 to 8 days) where the overall trend is down. Be patient.
Someone (Z) sent me an email asking
me to activate link#5. Thanks for the heads up. As soon as I have the time I
will do so. Stay tuned and good luck.
If you spend some time with the
graphics and try to understand what they are saying, you will see that there is
much to be gained. If you know of a system that I can compare my results with,
let me know. I would be grateful. As I stated a few days back, I am using these
couple of weeks to determine whether My Journey is viable with the model I am
using. So far it is looking great. I plan to restart My Journey in early April.
Stay tuned and visit often. Yes it is possible to grow one’s wealth very
quickly. Just watch me.
---------------------------------------
Tuesday, March 25,
2008:
After Monday’s close I said that we
should not expect net up side movement for the rest of the week. We have the
daily model being populated in the ‘future’ window of the graphics by red
boxes. And as this is happening we have the half hour model holding on to red.
This is true for the indices and AAPL. GOOG is a close cousin and AKAM is only
slightly different in that it is a bit delayed in its behavior.
It would appear that we are being
set up for another wave of selling. I have no idea of the magnitude. It may be
a non-event or it may be sizeable. Today I will refrain from making an analysis
of the 6 issues I follow. What really would be nice is if you were to generate
your own interpretation and to then e-mail your analysis to me. Anyway, that is
just a thought. Stay tuned and good luck.
If you spend some time with the
graphics and try to understand what they are saying, you will see that there is
much to be gained. If you know of a system that I can compare my results with,
let me know. I would be grateful. As I stated a few days back, I am using these
couple of weeks to determine whether My Journey is viable with the model I am
using. So far it is looking great. I plan to restart My Journey in early April.
Stay tuned and visit often. Yes it is possible to grow one’s wealth very
quickly. Just watch me.
---------------------------------------
Monday, March 24,
2008:
These are interesting times. Monday
was a great day. It caused the model to become more green. However, there still
remains a fair degree of instability. If you look at the Dow and the S&P500
and focus on the half hour model (bottom graphic for each issue), you see red
for the indices. But then when you look at the daily (top graphic) model you
find only 2 green boxes. So the Dow and the S&P have little room for up
movement after Monday’s run up. The next week or so does not look very good.
Now for the Nasdaq 100, we have a
bit more breathing room (it is a day behind the Dow). However, there is red
coming to the forefront. AAPL is similar to the market averages. GOOG is offset
by a couple of days. It has more upward potential. And finally AKAM is
comparable to GOOG.
Things are definitely interesting.
Stay tuned and come back often. Soon I will start documenting My Journey. You
will then get an idea of the type of strategy I am developing (and starting to
use).
If you spend some time with the
graphics and try to understand what they are saying, you will see that there is
much to be gained. If you know of a system that I can compare my results with,
let me know. I would be grateful. As I stated a few days back, I am using these
couple of weeks to determine whether My Journey is viable with the model I am
using. So far it is looking great. I plan to restart My Journey in early April.
Stay tuned and visit often. Yes it is possible to grow one’s wealth very
quickly. Just watch me.
---------------------------------------
Thursday, March 20,
2008:
Yesterday I said: “The volatility
just keeps increasing. On Tuesday, we were up 420 points and today we were down
300 points. This market is not for the faint of heart.” And on Thursday the
market was up 260 points. This is unbelievable. On Wednesday I told you there
would be volatility. But honestly, this is ridiculous. Anyway, let’s try to
make the best of it.
Let’s look at where we stand at the
end of the week (Thursday evening). First of all the 3 indices and AAPL are in
the same boat. What I say about one issue applies to the rest. So let’s use the
Dow as the example. On the top graphic we have red but on the half hour
(bottom) graphic we have green. Thus, one should be sitting out this segment of
the move. Now look at Monday the 24th. Again we have red in the top
graphic and green in the bottom graphic. As red enters the bottom graphic we
see green entering the top graphic. So there is too much volatility. At this
time my guess is to wait until Thursday (27th) when red
re-establishes itself in the daily graphic. This strategy covers 4 of the
issues.
Now on to GOOG. Its graphics are
almost identical to those of the indices. The difference I see is that the 27th
box is green. So I went back to the data and I found that the 27th
box was almost a red box. There was only a minor difference. The bottom line is
that GOOG is also in the volatile category.
This leaves us with AKAM. If you
look at the overall trend you see all of next week as green and going into
Monday we have green in the bottom graphic. So AKAM looks to be a long – in
fact the buy actually started on Thursday (20th) at 3pm based on the
start of the green in the half hour results. At that time, AKAM was at $30.24.
As I close out this column, I want
to point out that the model missed the 260 point jump on Thursday. However, in
all fairness, Thursday needs to be coupled with Wednesday because the down leg
of the down move includes the 2 days. On a personal note, I did very well but I
went short on Wednesday morning before the market dropped. Thursday’s rise
simply cancelled most of the down leg from the previous day. Such is life. Stay
tuned and good luck.
If you spend some time with the
graphics and try to understand what they are saying, you will see that there is
much to be gained. If you know of a system that I can compare my results with,
let me know. I would be grateful. As I stated a few days back, I am using these
couple of weeks to determine whether My Journey is viable with the model I am
using. So far it is looking great. I plan to restart My Journey in early April.
Stay tuned and visit often. Yes it is possible to grow one’s wealth very
quickly. Just watch me.
---------------------------------------
Wednesday, March 19,
2008:
The volatility just keeps
increasing. On Tuesday, we were up 420 points and today we were down 300
points. This market is not for the faint of heart. All things considered, I am
thrilled with the model’s performance in this market environment. Let me review
why.
On Tuesday we were long the market
for the big jump. Last night (Tuesday) the model said to look for a reversal
today around noon for all 6 issues. And today that’s what happened. We now have
all 6 issues pointing down. But look at the graphics and study them because
they are telling a story. There will be instability in the coming days because
we have 2 red days, then 2 green days and then a red day. That’s the volatility
for you. So pay attention or you will be taken for a ride.
With regards to myself, I am finally
getting the hang of how to follow the model. Today at around noon I shorted
GOOG as I mentioned I might last night (via a credit call spread). At the time
GOOG was about $444. I got $4.95 for the $10 spread which expires tomorrow. At
the close today, the spread was worth about 60 cents. Now that’s a home run.
Anyway, let’s see how the model does in the coming days. On another note, I am
gearing up to start My Journey. When I start I will tell you what I am trading
and how. At this point I can see that I will be trading both futures and
options. I have come to realize that options do have a place in my investment
strategy. The question that remains is how to use them. But, I am working on
it. Good luck and Stay Tuned.
If you spend some time with the
graphics and try to understand what they are saying, you will see that there is
much to be gained. If you know of a system that I can compare my results with,
let me know. I would be grateful. As I stated a few days back, I am using these
couple of weeks to determine whether My Journey is viable with the model I am
using. So far it is looking great. I plan to restart My Journey in early April.
Stay tuned and visit often. Yes it is possible to grow one’s wealth very
quickly. Just watch me.
---------------------------------------
Tuesday, March 18,
2008:
Oh, what a day. The Dow was up over
400 points – but I bet you know that. What is amazing is what has been going on
of late. Sunday evening the markets were in freefall. There was gloom and doom
around the world. As trading started on Monday morning in
OK, so we are now at the close on
Tuesday, what now? Good question. Let’s start with the 3 indices. They are all
virtually identical. If we look at the overall trend (top graphic for each
issue) we see a reversal for Thursday (in reality it is for Thursday morning).
But when we look at the half hour trend (bottom graphic for each issue) we see
that there is a reversal to the down side around lunch time on Wednesday. The question
is what to do. On a personal note, I will go short with the half hour model and
keep my eyes on the daily model. My guess is that the half hour model will lead
the daily model into a reversal to the down side. I may actually go short GOOG
(or maybe AAPL) by getting a credit call spread (bearish) for the March options
which expire at the close on Thursday. I will let you know Wednesday evening.
Now mind you the down trend at this
time appears to be of short duration (2 or 3 days). But given the market
gyrations, you simply don’t know what that will mean in size. I am trying to
follow the model as best I can. I must admit given the wild swings, it has been
difficult (nerve-racking). But a large positive from all this is how right the
model has been. I am excited and encouraged and I am now working on extending
my futures trading to include options again. Good luck.
If you spend some time with the
graphics and try to understand what they are saying, you will see that there is
much to be gained. If you know of a system that I can compare my results with,
let me know. I would be grateful. As I stated a few days back, I am using these
couple of weeks to determine whether My Journey is viable with the model I am
using. So far it is looking great. I plan to restart My Journey in early April.
Stay tuned and visit often. Yes it is possible to grow one’s wealth very
quickly. Just watch me.
---------------------------------------
Monday, March 17,
2008:
Yahoo called today a ‘remarkable
day’. I agree. The gyrations were wild. I was tied up most of the day and only
caught a few minutes during the day. But what I did see was something. Let’s
recap where the model was at. The overall trend for 5 of the 6 issues I follow
is up. The exception is AKAM. However, since nothing goes up in a straight
line, I have the half hour model that provides some guidance on timing intraday
moves. At the close of last week, the model said that the S&P500 and the
Nasdaq100 had turned red in the last half hour on Friday. The red was to continue
until early Monday afternoon (around 1:30pm). And sure enough that is basically
what happened. I am really taking comfort with the model.
Now let’s look at Tuesday. First of all,
for the 5 issues (excludes AKAM) the overall trend is up but we are now faced
with a reversal to the down side on Wednesday. The good news is that this
upcoming down move is looking to be only about 3 days in length. But that
doesn’t mean the market can’t go down a thousand points in that time span (just
kidding).
And what about the short term trend
(half hour model). Look at the bottom graphic for each issue. What you will
find is that the first 5 issues (Dow, S&P500, Nasdaq100, AAPL and GOOG) are
all pointing up as we go into Tuesday. The green remains for the entire day and
it looks like it will become red on Wednesday. This will coincide with the
reversal of the overall trend. So far the model has done very well. I am most
definitely pleased. Given the difficult market conditions, it has been on top
of what is going on. Not only has it done well with the indices, it has also
done well with the 3 stocks. In addition, it has been able to pick up that AAPL
and GOOG are simply following the market where the market encompasses the
S&P500 and the Nasdaq100.
With regards to AKAM, the model has
reserved some additional red for it. And we now see why. AKAM is now below $30.
If we look at Monday at 2:30 pm for AKAM we see green in the half hour model.
At that time the trader would close a short position in AKAM and sit back and
wait. For Tuesday, the overall trend is red and the half hour trend is green –
thus do nothing. On Wednesday AKAM will probably be in short territory like the
other issues.
On another note, I have looked for
comparable trading systems to my hybrid timing model. I have already mentioned
several of them, however, I am convinced my results are more accurate. As an
example, look at americanbulls.com and what they have at the close on Monday.
They posted a ‘buy confirmed’ for the Dow and at the same time a ‘sell
confirmed’ for the S&P500. If you look at the graphics below you will see
that I have the Dow and S&P500 in identical scenarios. Doesn’t that make
more sense?
If you spend some time with the
graphics and try to understand what they are saying, you will see that there is
much to be gained. If you know of a system that I can compare my results with,
let me know. I would be grateful. As I stated a few days back, I am using these
couple of weeks to determine whether My Journey is viable with the model I am
using. So far it is looking great. I plan to restart My Journey in early April.
Stay tuned and visit often. Yes it is possible to grow one’s wealth very
quickly. Just watch me.
---------------------------------------
Friday, March 14,
2008:
This has been a wild week. The
market gyrations are unbelievable. Stops are being triggered and creating even
more pain. Many are taking a bath. Let’s review what is going on. At the
beginning of the week we had a 400 point rise. And then on Friday we were down
almost 300 points in the afternoon – with a close of about 200 points down. The
model had the indices pointing up this week. The model was doing well until
Friday came along. Does that say something negative about the model? Not
really. Because the overall trend has superimposed on it a short term trend
curve. (Look at link #4 where I use the weather as an analogy.) Let me explain this by digressing a bit and
looking at my specific example. I use the combined model that includes the half
hour model (bottom graphic). Because it was red I had closed out my long
position a day earlier and was waiting until 11:30 am Friday morning to go long
again. That is what I did. At the time when I went long, the Dow was down about
170 points.
By the end of the day (Friday) I was
only slightly negative. But what to do now? Let’s review the issues by starting
with the 3 indices. The overall up trend remains in place (until Wed. March
19). This is indicated by the top graphic for each issue. In addition, AAPL and
GOOG are in the same boat. Now let’s look at the half hour model. We had green
for most of Friday. In reality, this is interesting because if you check out
these issues at 10 am, for instance, on Friday and compare them to their
closing values, you find there is little difference. So the issues dropped
early on and then gyrated the rest of the day on Friday.
The all important question is ‘What
about Monday?’. Well, in all fairness, we have red for the first half of Monday
and then after lunch we go back to green. Now I realize that forecasting on a
half hour basis is virtually impossible, nonetheless, we can do so because the
model is mathematical. Incidentally, the 5 indices are all in similar positions.
Check out the graphics below. With regards to myself, I am long as we go into
Monday. On Sunday evening I will decide if I should close the position and wait
until Monday afternoon. At this time, I am not sure.
The last (6th) issue I am
following is AKAM. It is moving against the markets. It has been in a down
trend but will reverse to the up side on Tuesday. Something seems to be going
on with AKAM. I do not know what. Stay tuned and good luck.
Before leaving I want to compare
what I was saying at the close on Friday with several others. I have mentioned
2 commercial websites that generate analyses for stocks (and indices). At the
close on Friday (March 14’08), this is how the ‘Hybrid Timing Model’ stacked up
against the 2 other models on the web. I will leave you to draw your own
conclusions.
|
|
Hybrid Timing Model |
||
|
Dow Industrials |
UP |
sell (buy-if) |
buy |
|
S&P500 |
UP |
buy (sell-if) |
buy |
|
Nasdaq 100 |
UP |
sell (buy-if) |
buy |
|
AAPL |
UP |
sell |
buy |
|
GOOG |
UP |
sell |
buy |
|
AKAM |
DOWN |
sell |
sell |
---------------------------------------
Thursday, March 13,
2008:
Another wild day has come and gone. The
markets were taking a beating at the start of the day. But then they recovered
to end the day – up. Let’s review how this fits in with the model. The overall
trend is up until late next week – so a positive close was welcome. The short
term (half hour) model had red for today. Let me explain what that means. Given
the overall trend (top graphic) is green and the bottom graphic was red, it was
a signal to sit out the move. As I said yesterday this is what I did. Think of
the weather analogy (you can read about it in link #4 below).
I am now looking for the half hour
model to turn green and align with the daily model. That should happen on
Friday morning around 11 am. I realize it is impossible to pin point a time –
but this is a mathematical projection (just like forecasting the weather). When
that happens I will go long (once again).
With regards to the 3 stocks, 2 of
them are more or less identical to the market indices. These are AAPL and GOOG.
They are pointing up and the short term model will reverse to the up side on
Friday morning. The last issue is AKAM. It is somewhat different from the rest.
It is moving against the markets. Its overall trend is down (for the next
couple of days). So it will reverse shortly to the upside but the markets will
be reversing to the down side. All I can conclude is that there are other
forces at play with AKAM besides the overall market.
Let’s see how we do with this move.
So far this week the model has done very well even with the wild market
gyrations. I am pleased. Will I feel this way tomorrow night? Stay tuned. As I
stated a few days ago, it is important that the model proves its worth before I
restart My Journey. Good luck.
---------------------------------------
Wednesday, March 12,
2008:
The market continued its climb this
morning and then faded in the afternoon. Why am I starting with this statement.
Because that is what the model said yesterday that the market would do. So what
does the model say about tomorrow (Thursday). If you look at the graphics that
follow below you can see that the overall up trend remains intact until the end
of next week. However, this afternoon we entered a pocket of weakness
(turbulence). If you look at the graphics (the bottom half hour ones) for the 3
indices, you will find red for tomorrow.
By the end of Thursday (tomorrow) or
early Friday our short term model should be flashing some green and the daily
model will also have green. I plan to re-establish my long position at that
time. My strategy is to hold a position (regardless of whether it is long or
short) when the 2 models are aligned.
With regards to the 3 stocks, we
have both AAPL and GOOG behaving like the market averages. Like the markets,
they were both up this morning as the model had suggested. And they both
declined in the afternoon. They are both in up trends but they are now facing
downward turbulence. The last issue is AKAM. It is in a down trend however it
has had green in the half hour (short term) model. It is now facing red in both
the half hour and daily graphics. Thus, AKAM is now looking at a down pocket.
At this time, when you look at the overall trends you find that AKAM is moving
against the markets.
Come back tomorrow for an update.
Let’s see if the model can nail a few of these moves in a row. If it does, it
will be a time for celebration. Stay tuned and Be Brave.
---------------------------------------
Tuesday, March 11,
2008:
What a day! If you were long, it was
truly fantastic. I am thrilled. I went long last night after posting the
update. It is amazing to see, after the devastation of the last few weeks, a
day like today. So much had been liquidated and there is so much money on the
sidelines that a spark can set it off. If you look at yesterday’s comments you
see that the model was calling for a reversal (the magnitude is not
predictable). As we started the day we had 5 issues pointing up and one
pointing down. At the end of the day (Tuesday) we had the same distribution.
All are pointing up except for AKAM.
So where do we stand. That depends.
If you are looking at the ‘longer’ term trend which is indicated by the top
graphic for each issue, the trend is up (except for AKAM). However, if you look
at the half hour model (the bottom graphic) then we can see some red creeping
into tomorrow afternoon. In trading futures, I closely follow the bottom
graphic. It allows me to get out of a position and wait to get back in.
Let me focus on the 3 indices. Their
overall trends are all up (top graphic). But the short term trend (half hour model)
will turn red around 1 pm on Wednesday for the Dow and the S&P500 and
around 3 pm for the Nasdaq100. These are just mathematical estimates and should
be taken with a grain of salt. When the short term turns red, I will close out
my long position and wait for the red to pass. I will then, once green
reappears, reopen a long position. It is that simple. And with futures there is
no hassle and a trading window of about 23 hours.
Anyway, I am not here to sell you on
futures trading. I am here to develop and test a viable trading algorithm that
can grow one’s wealth. I am here to document My Journey. And for those who do
not know what it is, let me restate it. It is to grow $5K into 1 million in 2
years.
My first 15 months were not
successful. However, I survived and learned along the way. I am now up to the
challenge. On April 1 I will start showing my trades and my worth. I will use
the next couple of weeks to straighten myself out. One thing I have realized is
that it takes more than a model to ‘make it’. That’s why I want a few more
weeks before I launch ‘My Journey’. Good luck to all and Stay Tuned. The fun is
just beginning.
---------------------------------------
Monday, March 10,
2008:
Today’s strong down draft had the
model scrambling to reassess the situation. There is some good news. All 3
indices are green as of Tuesday morning. If you look at the graphics you now
see green in the future boxes. You also see green in the half hour model
(bottom graphic) as Monday came to a close. So the indices will now be pointing
up.
So what about the 3 stocks. Let’s
start with GOOG. It, like the indices, has green in the future window and it
has green as of 12:30 pm on Tuesday March 11 in the half hour model. So GOOG is
also looking up as of Tuesday.
With regards to AAPL, it too is
about to reverse to the up side tomorrow morning (Tuesday). And finally we have
AKAM which now has red across the future window. Now isn’t this exciting. Stay
tuned.
---------------------------------------
Friday, March 7, 2008:
I am glad this week is over. I am
sure many of you are in agreement. Sometimes we are faced with obstacles that
are thrown our way as we move along the path that leads us to our objective.
Look at Barack or look at Hillary or look at me. We are all having our ups and
downs. Enough about politics. Let me focus on my results and specifically about
the model.
This was a week for reflection. We
went into this week and I was saying that the week would be up. Wrong. So I
asked myself: Why was I wrong? Being wrong is not the issue. But being in
engineering, one always looks back at data when one is wrong. You have to ask:
Why? In most cases, there is no definitive answer. But once in a while there is
something to be learned.
I did that on Friday and I came up
with something that has me kicking myself in the butt. About 10 days ago I
re-configured the combined model and I put aside the criteria (filter) for
confirming the overall trend. Well, that was a big mistake. When I looked at
the data I realized that I should never have done that. In fact, I don’t know
why I eliminated the confirmation (i.e. filter). I had done well with it in
place and I will again do well by re-instating it. So today, March 8th,
the confirmation filter is back in place. The overall effect is that the up
trend for the markets last week was not real. Ouch. So be it. Live and learn. I
can feel that I am rapidly converging on a viable model. In fact, if pressed, I
would go on the record as stating that by the end of March I will be in full
swing. I will be starting at the end of March to grow $5K into 1 million in 2
years. I now am convinced I can do it. And more importantly I will do it.
For the past year I have worked hard
to get back on my feet after an initial burst of success. The model is substantially
better than it was last year. Even though I did well, there were several
factors. One was that the market was more predictable. As the market grew
volatile during 2007, it became increasing difficult to succeed with the ‘old’
version of the model. At the beginning of 2008 I came up with the combined
model which was working well. And then as I introduced the half hour model, I
neglected a key filter. The result was the model was pointing up while the
indices were taking a beating. That should not have happened (I am referring to
the model) and I think in the future you will see ‘terrific’ performance. So
stay tuned and keep reading. I want you to succeed (almost as much as I want to
succeed).
Let’s use some of this space to
review what the model is now saying. And yes this is the model with the filter.
Given the update (i.e. inclusion of filter) I have made to the model, let’s
look at each issue individually. If you look at the top graphic (daily model)
for the Dow index, you see that the overall trend is down. The past five days
are all red boxes and the future 5 days have red boxes. Now, let’s look at the
bottom graphic which is based on the half hour model. You can see that there
was red coming into Friday. So someone who is doing fast trading (futures and
options) would have been short on Friday until 3:30 pm. At that time the half
hour model went green and it went against the daily model. Thus, at that time
the short position was closed and no position was initiated. When the half hour
model becomes red again (and assuming the daily is still red) then one should
initiate another short position.
With regards to the S&P 500 and
the Nasdaq 100 indices, they are virtually identical to the Dow. So we are in down
trends and we were short going into Friday. Towards the end of the day, we
closed the short position and sat on the sidelines. Based on what we can see,
we should remain with no position until Tuesday (at least). When the half hour
model shows red again, we can then initiate a short position (assuming the
daily model remains red).
Now, let’s look at GOOG. It is
virtually identical to the market indices. The overall trend is a string of 10
red boxes. The half hour model went green at 2:30 pm on Friday. At that time
one would close out short positions. When the half hour model becomes red
again, then one would re-initiate a short position.
The last 2 issues are AAPL and AKAM.
They are both in up trends (green boxes). Meanwhile the half hour model is just
going green. So on Friday we would have been out of AAPL and AKAM because the
daily and half hour models were at odds. As we go into Monday we have both
models in green mode. This implies that we would re-instate a long position on
Monday morning in AAPL and AKAM. We would close the position when the 2 models
disagree.
So let’s summarize the outlook for
Monday. We closed out (late Friday) our shorts in the Dow, the S&P 500, the
Nasdaq 100 and GOOG. As we go into Monday we hold no position. Meanwhile, we opened
long positions in AAPL and AKAM at the close on Friday. As a final comment, one
who does not want to trade ‘so frequently’ would simply follow the overall
trend (the top graphic). However, I would use the half hour model to get into
the position initially and I would use it to get out of the position. Good luck
to all.
I think the next 3 weeks (the rest
of March) will tell the tale. The model will be making a number of moves in a
difficult market environment. If it does well – I will resume My Journey. The
current model (including filter) is what I will use. I will not change it. I
will stand by it and at the end of March will issue my judgment. I am convinced
that the conclusion will be that the model is performing well – go for the
million. Stay tuned and Enjoy. This time I think you really will enjoy the
performance. But in the event that things do not work out by the end of March,
I may call it quits.
---------------------------------------
Thursday, March 6,
2008:
Ouch. I can feel the pain that is
out there. Long term analysis is out of my league. I don’t know where
ultimately we are headed. All I can tell you is about the short term (as
measured in days).
I have graphics that are shown below
for 6 issues. Three are for market indices and 3 are for stocks. I will refrain
from an analysis of the stocks. You can do your own analysis on the graphics
today. But, to help you along, let’s look at one of the indices and detail what
happened.
Let me choose the S&P 500
because that is the index I focus on. When you look at the top graphic for the
S&P you see that its overall trend is up (even after today’s drop).
However, it is set to reverse to the down side in a few days. Because of
today’s drop, this move is showing a sizable loss. But, the move is not over
yet. I thought this week was going to be positive. At this point (Thursday
evening), it does not seem likely.
Now, let’s look at the results of
the half hour model for S&P (the bottom graphic). We had (as was
anticipated yesterday) a localized down draft that was to end today (Thursday)
at 1:00 pm. And sure enough, the half hour model maintained that signal and
today (Thursday) at 1 pm the model said to re-establish a long position. You
will note that someone following the model had no position going into Thursday.
At 1:00 pm the S&P was at about
1314. The afternoon was a tough grind but by 3:30 pm the S&P was still at
1314. However, in the last half hour the S&P lost 10 points. Ouch. At the
close today the model (half hour) has the S&P in an up trend that is
aligned with the daily model for essentially all of Friday.
I hope that the model will be able
to recoup some of the loss it incurred in today’s final half hour. By the way,
the Dow and the Nasdaq 100 are in similar positions. So, stay tuned.
---------------------------------------
Wednesday, March 5,
2008:
I have taken your comments and your
interests into consideration. I have brought back the graphics for AAPL, GOOG
and AKAM. When you look at the graphics that
follow below, you see for each issue a top graphic and a bottom graphic. The
top graphic is based on daily analysis. It indicates the overall trend. The
bottom graphic shows the short term trend which is derived from a half hour
analysis.
There are 2 ways to use this data.
You can simply use the top graphic and follow the overall trend. The other
possibility is to use the half hour model for trading the overall trend. So
when the 2 models are at odds, you sit the move out (hold no position).
Let’s consider today’s data for the
Dow (or the S&P500). You can see that the overall trend went into up mode
on Tuesday March 4. If you could see the data (half hour) you would find that
the reversal to the up side occurred at 2:30 pm when the Dow was at 12,060. Now
if you look at the half hour graphic, you see that there is a ‘close the long
position (NOT short)’ at 12:30 pm the following day (Wednesday the 5th)
when the Dow was at 12,296. So the long position is closed and it leaves one
with no position. A new long position is to be established at 1:00 pm on
Thursday, March 6 (tentative, of course).
You should note that since the
overall trend is up, only long positions will be opened and closed. Once the
overall trend reverses to the down side, then only short positions will be
opened and closed. This is an especially good strategy for trading futures.
Others may use the data to fine tune their entry and exit points.
---------------------------------------
Tuesday, March 4,
2008:
Aren’t the markets something. Yesterday
(Monday) the model issued a ‘go long’ (buy, if you like) for the 3 indices (the
Dow, S&P500 and Nasdaq100) that I follow. And then today (Tuesday) came
along. I was tied up most of the day but when I looked I saw the Dow down 200
points. Things were not looking good and then in the last hour there was a wave
of buying that cancelled out a large part of the losses. So the model hung in
there nicely.
At the close on Tuesday, what does
the model think? It maintains the up trend (the daily model). Moreover, the
half hour model also remains pointing up. As I’ve stated before, I trade the
futures on the indices. The daily model (top graphic) sets the overall trend.
The half hour model is what I trade. For example, if you look at the S&P
500 index daily graphic, you see that the overall trend is up. So, I am long
while the half hour model points up. When the half hour points down, I simply
close the position and wait for the half hour to realign with the overall
trend. When it does I will go long again. The strategy is relatively simple.
Now let’s see what I can do with the model in my sail. Stay tuned.
Incidentally, I am planning to bring
back AAPL, GOOG and AKAM. I have received a number of messages about this
situation. I am however dropping the Russell 2000 Index (IWM). Good luck to
all.
---------------------------------------
Monday, March 3, 2008:
Last Friday after a drop of 315
points, the model said ‘Look to the next week with an eye to buying beginning
on Monday’. The model today (Monday) took the 3 issues, the Dow, the S&P500
and the Nasdaq100 and reversed them to a short term buy.
If you look at the graphics, you see
green on the daily graphic starting on Tuesday. However, the half hour model is
used for fine tuning and for filtering out contradictory moves. Thus, the buys
started on Monday at lunch time because the half hour model is leading the way.
Given that I trade futures, the
trades are relatively short in duration and there is typically a no position
segment between moves. I have entered the moves into link 6. You will note I
used the label ‘open long’ which is a term used in futures trading. When I
close it out (i.e. sell it), the label will be ‘close long’. And when I go
short, the label will be ‘open short’.
And finally, I have received a
number of emails from readers who are asking me to bring back AAPL, GOOG and
AKAM. Given the outpouring of emotion, I am planning to do this in the next
couple of days. Stay tuned.
---------------------------------------
Friday, February 29,
2008:
Today (Friday) was a special day –
only exists every 4 years. The markets are wild – hope every 4 years also
applies. We have huge swings in both directions on consecutive days. If you
have read what I’ve written in the last few days, you may recall that I am
formulating a trading strategy that focuses on index futures (S&P500, for
example). In addition, the strategy is geared towards short moves (a day or 2
in length) and it allows for sitting out (holding no position) a day or so
between moves. I am in the process of starting to trade this way.
I am telling you this because this
site is supposed to reflect my strategy. And so starting today, it does. I can
tell you one thing. If this strategy works out – it will be phenomenal. Anyway,
let’s wait and see to determine how the model performs. Remember, I have the
combined model which incorporates 2 models. The first is what I refer to as the
daily model. Those are the graphics I showed in the past and I will continue to
show them. However, I will also show some of the results from the other model
(half-hour basis). So for each issue there will be 2 graphics. Given I only
trade the indices, I am removing 4 of the issues I was following. I am leaving
only the Dow, the S&P500 and the Nasdaq100. Whether or not I will bring
back the 4 issues will depend on your feed back. On a personal level, I do not
trade them. So, for now let’s focus on the 3 indices and see how they do.
Let’s consider the graphics for the
second issue (the S&P500) which is what I trade. If you scroll down and
look at the graphics for the S&P500 you will now see 2 graphics. The top
graphic is like the one I have shown in the past. It shows the past 5 days and
the future 5 days. It gives us the overall trend. Confirmation by the half-hour
model is no longer the issue it was in the past.
Below the ‘daily’ graphic we have
another graphic that is based on the half hour data (i.e. 10am, 10:30am, 11am
…. 4pm). There are 13 data points in a day. This graphic shows how I trade. My
strategy is to trade when the two models are aligned. In other words, they are
confirming each other. If you could see the data, you would find that the
half-hour model became red at 12 pm on Wed. Feb. 27 when the S&P was 1388.
At that time, the daily model also had Wed as red. Thus, I would have shorted
S&P at that time had I been following the model. Now look at what is coming
up for Monday. We have green in the Monday box and we have green in the 12:30
pm half-hour box. So on Monday, the forecast is for a reversal to the upside at
lunch time. Naturally, this is a dynamic analysis and subject to adjustment as
new data comes in Monday morning.
Another point worth noting is that
the results of the half-hour model for all 3 issues are identical – a reversal
to the up side at 12:30 pm. In addition, all 3 daily models are comfortable
with this. Even the Dow which has green on Tuesday in the daily model qualifies
for a reversal at 12:30 on Monday. The logic is simple. The half hour model is
more dynamic and is the fine tuning for the daily model. So if the Dow shows
green (daily model) for Tuesday, then it is fair to begin the move on Monday
and have it carry into Tuesday because the half hour model extends into
Tuesday.
Before I leave you to assess this
new format and to send me your comments and to see if you can use my approach
to make a profit, let me tell you what I have done in my trading account.
Because I am in the process of nailing down my strategy to achieve My Journey,
I haven’t done as well as I could have, but I have certainly survived and held
my own. Now let me tell you what I am holding.
On Friday afternoon around 2 pm I
went long the S&P 500. I had been short the S&P but closed it too early
Wed evening because I was still studying my approach. I did not initiate a new
position then. One reason I bring this up is because the half hour model had
the reversal for about 2 pm on Friday. But because of the sharp drop in the
market, the model started to delay the reversal and as you know it is now set
at 12:30 on Monday. Such is life – as they say: ‘You can’t always get what you
want’. The bottom line is that next week is looking better for the markets.
Note the green daily boxes in the ‘future’ windows. If you look around, all you
find is gloom and doom. The hybrid model does not see it that way for next.
Here we go again – another great test of its capabilities.
I think I feel like Obama. Each day
seems to bring the immediate objective a bit closer. We are fine tuning and
adjusting but we are making progress. Stay tuned and let me know what you
think. Good luck (and to you too, Barack).
---------------------------------------
Thursday, February 28,
2008:
It is Thursday evening. Another wild
day at the market. I did not see it myself but the charts look like there is a
lot of instability – maybe even a touch of panic. I have held my own with all
this. I could have done better but I am glad to be at 6.0K all things
considered.
I did not update the graphics with
Thursday’s data. There were too many things going on. From a personal
perspective, I am 95% convinced that the trading of futures on the S&P500
is the best strategy for me. Some of the reasons are: 1) it trades over 23
hours a day, 2) the commissions are very low, 3) the spread between bid and ask
is usually only one tick, 4) the trading volume is very high, 5) the time
premium is almost negligible, 6) the leverage is very large (deposit is about
5%) and 7) the index is more predictable to trade than a stock.
Over the last month I have tried to
refine my trading strategy. Initially, I focused on option spreads but now I
find that I don’t have the nerve to trade them. At this time, my strategy has
evolved to the point that the daily model sets the overall trend while the
half-hour model determines when I should be invested in the overall trend. So
if the overall trend is up – I only go long and I do so with the half-hour
model. When the half hour model reverses against the overall trend, I sit out
the move. I am keen about this strategy and it appears to be as good as it
gets. My problem at this time is that I get too excited and inevitably make
decisions that are counter productive. But I am on my way to altering my way of
doing things. I figure if I can get a grip on myself, I will succeed in My
Journey. The potential is there. Stay tuned.
---------------------------------------
Wednesday, February
27, 2008:
I was busy tonight and did not have
enough time to write an exhaustive analysis. What I can say is that nothing reversed
today – even if I thought the reversals would have happened today. We still
have 5 issues pointing up and 2 issues pointing down. Now mind you, a number of
issues can reverse to the down side as early as tomorrow (Thursday). But, we
will only know once we get some more data. So stay tuned and come back tomorrow
to find out. Good luck.
---------------------------------------
Tuesday, February 26,
2008:
The last couple of days have been
good to the markets. For the last little while we have had all 4 indices
pointing up and that was appropriate given the moves we have had. But we also
had GOOG pointing up and that turned out to be a bad strategy. BUT the move is
not yet complete. In fact, none of the moves are complete because I did not
enter (today) any reversals in the table in link #6.
Let’s review where we are at. At the
close on Tuesday we had 5 issues pointing up and 2 pointing down. Tomorrow will
likely bring some wholesale changes. We should have all 4 indices reverse to
the downside. Note the word ‘should’ – nothing is definitive until it happens.
So the model has digested the latest moves and is now saying: “This is it”. We
will now go into a down trend for some time. Look at the graphics for the 4
indices. What you see are green boxes to the left of the central marker and you
have red boxes to the right (i.e. in the future window). So the model thinks
that for now the up momentum is about to run out of steam. This is my
interpretation of the results.
The 5th issue that was
pointing up at the close on Tuesday was GOOG. The forecast for GOOG defies all
logic. For the last couple of days, the model has been wrong about GOOG. It had
it pointing up but GOOG went down. So what does the model now say? This thing
will recover – your best bet is to be long. This is one gutsy forecast given it
has the indices about to reverse to the down side.
That leaves us with AKAM and AAPL.
Let’s start with AKAM. It has one green box in the future window. That box
should be wiped out tomorrow – so AKAM should remain pointing down. And finally
we have AAPL. AAPL, like AKAM, has been pointing down for a while. At the close
on Tuesday, AAPL has 3 green boxes directly ahead in the future window. But,
given the inability of the half-hour model to confirm, these boxes will simply
disappear during the next couple of days.
So let’s recap. Tonight is an important evening because we
sit on the verge of a reversal for the 4 indices. They will join AAPL and AKAM
to the down side. So, all things being equal, I am anticipating that tomorrow
evening 6 of the 7 issues will be pointing down. If that happens, I will need
to make 4 entries into the table. Moreover, the lone issue that will be
pointing up will be GOOG which, of course, has been a ‘disaster’ in the last
couple of days. It went against the markets in the last few days and now it
looks like it will go against the markets in the upcoming days.
As I say, Stay Tuned. The excitement
should be amazing. I have laid my analysis on the table. What you do with it is
totally up to you. Good Luck.
Before I close, you probably know
that I am a prof. I am always looking at examples to explain theory and how
things work. There will be much to be learned about the model in the next week.
Let’s make it a date to review what I wrote today in the next week or two. It
will be fascinating to see how the model will perform. Until tomorrow – hang in
there.
---------------------------------------
Monday, February 25,
2008:
We still have 5 issues pointing up
and 2 pointing down. However, the issues that are pointing up are now looking
at reversals to the down side in the next day or two. I don’t have much time
this evening. Will write more tomorrow.
---------------------------------------
Friday, February 22,
2008:
Wow. What a finish. I was at a
meeting between 3 and 4. When I checked at 3 pm, the market was down 100 points
and then at the close it was up 100. The markets are wilder than they were a
year ago. Let’s review where we are at.
We started Friday with 5 of the 7
issues I follow pointing up. They are the Dow, S&P500, Nasdaq 100, Russell
2000 and GOOG which are pointing up. The 2 issues pointing down are AAPL and
AKAM. At the close, nothing had changed – 5 pointing up and 2 down. You may
have noted that of the 7 issues today, 2 were down and 5 were up. Guess which 2
were down – if you said AAPL and AKAM, then you are probably following
(closely) what I am writing (or what the model is saying).
In the past, I have mentioned 2
commercial websites that generate analyses for stocks (and indices). At the
close on Friday, this is how the ‘Hybrid Timing Model’ stacked up against the 2
other models on the web.
|
|
Hybrid Timing Model |
||
|
Dow Industrials |
UP |
sell |
sell |
|
S&P500 |
UP |
sell (buy-if) |
sell |
|
Nasdaq 100 |
UP |
sell |
sell |
|
Russell 2000 |
UP |
sell |
sell |
|
AAPL |
DOWN |
sell |
sell |
|
GOOG |
UP |
buy |
sell |
|
AKAM |
DOWN |
buy (sell-if) |
sell |
Several people have written nice
letters to me. They want more info about how I invest and how the model works.
Rather than write to them directly I will post their letters and my responses on
this page this weekend. So stay tuned and come back to see what I have written.
I will post it in link 4.
---------------------------------------
Thursday, February 21,
2008:
Today (Thursday) saw a sizeable move
to the down side. Regardless, little has changed. Five issues continue to point
up and 2 continue to point down (AAPL and AKAM). I won’t add comments today –
instead I will wait until tomorrow.
---------------------------------------
Wednesday, February 20,
2008:
Yesterday (on Tuesday) I said that
the reversals to the down side were probably fakeouts and that the up trend
would likely resume in a day or 2. Well that process started to happen
today. We had the Nasdaq 100 and the
Russell 2000 reverse to the up side after spending only one day on the down
side. Such is life. That leaves us with 2 issues pointing down. They are AAPL
and AKAM and they too can easily reverse. In fact, these 2 issues have
identical graphics. Take a look. You can see the times and prices of the
reversals in link #6 below.
So for now, we are looking at an up
trend. Enjoy. And stay tuned.
---------------------------------------
Tuesday, February 19,
2008:
Tuesday was another one of those
days. It started off strong. It led me to believe that we could avoid having
reversals to the down side. But that was not to be because as the market faded,
we got some reversals. In fact, we got 4 reversals to the down side. I should
add that these appear to be short term reversals that can be easily overcome in
the next day or two. We will have to see. So for now in link 6 below you will
find the listing of the 4 reversals – both when they occurred and at what
price. If you look at the graphics below you can also tell which 4 issues now
have downward pointing arrows.
As I stated, these reversals should
go back to up trends in the next day or two. My feeling is that this is a fake
out – but you never know. So, in the end, the model will be the judge. Good
luck and stay tuned.
---------------------------------------
Friday, February 15,
2008:
Friday was an average day. Nothing
too extreme. Now let’s get down to business. Where will the 7 issues I follow
go now? Incidentally, to those who are new to this site, I follow the 7 issues
that are listed further down this page where you will find a graphic for each
of the issues. The graphic gives you a snap shot of where we have been and what
may be in store for the coming week. The graphic you see is only ‘half the
picture’. I do not show the other half which is used to confirm the anticipated
moves.
At the close on Friday, the graphics
for all 7 issues are comparable. They are all pointing up, but… We have a
couple of red boxes which are followed by green boxes. BUT the half-hour model
is set to create red boxes of its own on Tuesday – and that applies to all 7
issues. So on Tuesday (Monday is a holiday for those not in the
When I look at the data for Tuesday
this is what I see. If there is ‘little change’ on Tuesday morning, then there
will be reversals to the down side for all 7 issues. The projected times that
they will occur are – no don’t laugh this is simply a projection like a weather
forecast: the S&P500, the Nasdaq100 and the Russell 2000 at 11:30am, the
Dow at high noon, and AAPL and GOOG at 2:00pm. That leaves us with AKAM. It
leads the pack with a reversal set for 10:00am.
BUT, it is important to note the ‘little change or down scenario’ for
the reversals to take hold. Otherwise, if the issues are up, we can have the
situation where the half-hour model is delayed as the red boxes in the daily
graphic disappear. If that happens there will NOT be reversals. So at this
point, things are ‘touch and go’. We will simply have to wait. There is too
much instability in the air.
So, at the close on Tuesday I MAY be
putting 7 new entries (sell) into the table found in link 3 below. Now won’t
that be something. Stay tuned. Good luck. As a final note I may write some
additional notes this weekend and I will post them if I do. Visit often and
tell your friends. Help yourself and then help others make it in the investing
arena.
I added the following paragraph as an
after thought. If we look at the 4 indices I follow, we find that at the close
on Friday all are pointing up but all 4 are likely to reverse to the down side
on Tuesday. Now let’s look at http://americanbulls.com.
On Friday they said that the Dow was now a ‘sell’ and the Russell 2000 is now a
‘sell’. That is fair enough. I may have both become sells on Tuesday. However,
it is the other 2 issues that I have some difficulty with. The 2 issues are the
Nasdaq100 (the QQQQ) and the S&P500.
They have the S&P500 as a ‘sell-if’. That again is a reasonable
decision. However, they have the Nasdaq100 as a ‘buy-if’. I disagree. They have
it as a sell and it should remain that way. It is difficult to get a handle on
what is happening when you have a divergence of directions. They have 2 sell
confirmed, 1 sell-if and 1 buy if. Meanwhile, I have all 4 going into Tuesday
pointing up but with reversals to the down side for all 4 as
possibilities.
And what about the 3 stocks? ABulls
has AAPL and GOOG both as sells. That is reasonable. I may have them as sells
on Tuesday. But they just confirmed a buy for AKAM – they made AKAM a buy on
Friday. Meanwhile, I had AKAM as a buy for the past week or so but on Tuesday,
AKAM may, like all the rest of the issues I follow, go into a sell trend. That
will be interesting to watch.
Another site that also provides
short term analysis of stocks is http://stockpickreport.com.
According to SPReport the Dow, S&P500, Nasdaq 100, AAPL and GOOG are in buy
territory. The 2 remaining issues, Russell 2000 and AKAM are in sell territory.
So they have 5 buys and 2 sells. I will be watching to see what these 2 sites
do next week. They provide a reasonable challenge for me. As I say, Stay Tuned
and Be Brave.
---------------------------------------
Thursday, February 14,
2008:
This week is almost over. It has
been something to watch the swings. Today, the Dow was down about 175 points –
so what’s new. We are seeing large moves both up and down. But, let’s put that
aside and let’s focus on the markets.
To start, all 7 issues continue to
point up. The last few days have been interesting. The issues don’t want to
reverse to the down side. The half hour model is propping them up. And, in the
meantime, the red boxes are being squeezed out of the future windows by green
boxes. So this is shaping up to be a very interesting move. If the markets can
survive the next couple of days, the up trend will pick up vigor. Stay tuned.
Be Brave.
---------------------------------------
Wednesday, February
13, 2008:
Wednesday was a good day. All 7
issues are pointing up and today all of them went up. As we go into Thursday
you will see on the graphics a lot of red. BUT, remember for the red to take
hold, the half-hour model needs to confirm the reversal. At this stage, the
half-hour model is not ready to confirm any reversal. So we remain with all 7
issues pointing up.
What we have is a delicate
situation. Will we have reversals to the down side – I don’t know. If the
half-hour model hangs in for the next few days, we will have the red boxes in
the future windows becoming green again. The bottom line is we need to look at
the issues one day at a time. For now enjoy the upside momentum. Good luck.
As a final point, I just reread link
#3 ‘A New Beginning’. Wow, I love it. When I wrote that piece I was at $2.9K.
But it was a new beginning both for me and Barack. With regards to Barack, he
has done GREAT. He will be the next President. And I have done really well. I
am at $6.2K. The model is really performing. Stay tuned.
---------------------------------------
Tuesday, February 12,
2008:
Tuesday was another wild day. The
Dow was up a fair bit, while the Nasdaq was not. We saw a split personality
again. As we started the day we had 5 issues pointing up. But at 10:30am the
other 2 issues, the Dow and IWM, both reversed to the upside. The moves are
noted in link #6 below.
So at the end of the day, all 7
issues are pointing up but because the green boxes in the future windows are
almost gone, the half hour model will become the focal point. When it confirms
a reversal it will be noted. Until that time the up trend will remain intact.
For now everything is pointing up. I will try to avoid making statements like I
did yesterday. Let’s just focus on the results of the model and let’s not try
to second guess it (like I did yesterday). Stay tuned and good luck.
---------------------------------------
Monday, February 11,
2008:
On the weekend I said that we would
see some buy signals and sure enough we saw some today. This morning (Monday)
we started with GOOG and AKAM as buys from last week and they were then joined
by the S&P500, the Nasdaq100 and AAPL. However, the Dow and the Russell
2000 held out. They remain pointing down. If you look at link #6 below, you can
see what the ‘official’ prices were for the reversals. Now let’s look at the
future.
Unfortunately, the future does not
look good. Why you may ask. Because the boxes in the ‘future’ windows have a
lot of red. At this time this up move is looking like a short up move (a
fake-out). Obviously, I can’t tell for sure but it has a ‘bad look’ to it.
Let’s look at the issues in order of appearance.
Dow: At this point it does not look
like the Dow will reverse and even if it does, it only has 2 green boxes left.
S&P500 and Nasdaq100: They both
reversed to the up side today but they may reverse to the down side as early as
Thursday.
IWM:
Is pointing down (like the Dow). And the green boxes are being consumed
by oncoming red boxes.
AAPL: Is just like the S&P500 and the
Nasdaq100.
GOOG: Has run out of green boxes. Can reverse to
the down side at any time.
AKAM: Like GOOG, AKAM has run out of green boxes. A
reversal to the down side will occur if AKAM suffers some intraday weakness.
It would appear that the reversals
to the up side we have are very short term – they may be taken back in the next
couple of days. However, no one really knows until the model says so. Now isn’t
life exciting. Come back tomorrow to find out what the model is seeing. Good
luck.
---------------------------------------
Friday, February 8,
2008:
We went into Friday with 2 buy
signals in place. (Note the sell signals had been instituted at the end of 2007).
We had GOOG and AKAM as buys. The other 5 issues I follow are AAPL and 4
indices. On Friday, the market had a split personality. It had the blue chips
moving down and technology moving up.
So at the close on Friday we have 3
indices and AAPL all set to reverse to the up side on Monday morning if the
prices are flat or up a bit. Even if they are down ‘a little bit’ that should
be alright too. Thus, if we assume that nothing drastic will happen on Monday
morning, we will see the S&P500, the Nasdaq 100 and the Russell 2000 along
with AAPL reverse their trends and go into up trends. The last time this
happened was in late 2007. The remaining issue is the Dow. It is lagging a
little bit. It will need some positive movement (about 40 points) on Monday to
cause it to reverse to the upside. Thus, it too can ‘easily’ reverse to the up
side.
As you can see, next week promises
to be quite something. I actually may be able to populate the entire table in
link 6 with buys. Stay tuned and good luck.
---------------------------------------
Thursday, February 7,
2008:
I could not post on Wednesday. As it
happened, the first buy of 2008 happened on Wednesday. It was by GOOG at 3:00
pm at a price of $502.05. And today, Thursday we had the second buy of the
year. It was by AKAM at 10 am on Thursday at a price of $30.91.
When we look at the other 5 issues
we see green boxes directly ahead, however, the half hour model is not
confirming. If the half hour model sees sufficient stability, then a bunch of
other buys will appear. So stay tuned. This is one heck of a ride. Be Brave.
---------------------------------------
Tuesday, February 5,
2008:
What a day – Dow drops 370 points.
The instability is unreal. We started the day with all sever issues pointing
down. As we go into Wednesday, all 7 issues continue to point down. Let’s look
at the markets. All issues continue to point down but there is a light
appearing in the tunnel. If you look at the graphics below you will see that
the 4 indices and AAPL are virtually identical. The indices are all looking for
reversals on Thursday, Feb. 7. So at the start of the week, it did not look
good for the model but 2 days later and after shedding 500 Dow points, the
model looks pretty good. I say it looks terrific but I am bias. Good luck.
Then we have GOOG which can reverse
to the upside any time but the half-hour model is refusing to confirm. So for
now GOOG remains pointing down but a bit of stability could cause it to reverse
to the up side, so stay tuned. And finally we have AKAM. It has 2 green boxes
left but the half-hour model refuses to confirm. Thus, AKAM remains pointing
down. If something positive doesn’t happen in the next 2 days, AKAM will be
looking at a bunch of red boxes. Come back tomorrow to see how things are
playing out. On a personal note, I am using the half-hour model to make
multiple trades with futures. It’s going great. Be Brave.
---------------------------------------
Monday, February 4,
2008:
I just finished watching Hilary C on
David L’s show (tomorrow is the ‘really big’ Tuesday). She was great. Some of
you know Barack is my man but Hilary is great. My wish is that the 2 of them
form the ticket as a team – you know my preference but I can live with the
alternative. Now let’s get back to the markets. All issues continue to point
down but there is a light appearing in the tunnel. If you look at the graphics
below you will see that the 4 indices and AAPL are identical. And they are all
looking for reversals on Monday, Feb. 11.
Then we have GOOG which can reverse
to the upside any time but the half-hour model is refusing to confirm. So for
now GOOG remains pointing down but a bit of stability could cause it to reverse
to the up side, so stay tuned. And finally we have AKAM. It has 2 green boxes
left but the half-hour model refuses to confirm. Thus, AKAM remains pointing
down. If something positive doesn’t happen in the next 2 days, AKAM will be
looking at a bunch of red boxes. Come back tomorrow to see how things are
playing out. On a personal note, I am using the half-hour model to make
multiple trades with futures. It’s going great. Be Brave.
---------------------------------------
Friday, February 1,
2008:
What a week. The markets were up big
time, especially on Thursday and Friday. All week long the model has kept all
seven issues in down trends. That continues as we start the first week of
February. In fact what is interesting is that the model seems to be convinced
that the trend is still down. Look at
the graphics. You have the first 4 issues (the indices) all showing red in the
‘future’. AAPL is the same. It too is showing red across the board. AKAM has 3 green boxes but they are not yet
being confirmed by the half hour model. So for AKAM there is little positive at
this time. I realize that given the buyouts scenario, AKAM could end up being a
target. But mathematically, it could turn positive but it would need to do so
in the next couple of days before ‘red’ sets in. Finally we have GOOG. It may
just end up in an up trend very soon. It is interesting at this time. But we
are not there yet. So, stay tuned. Be Brave.
---------------------------------------
Thursday, January 31,
2008:
Today (Thursday) was a nice up day.
It didn’t look good premarket. During the night, the Dow was down about 150 points.
But the afternoon brought sizeable relief for the longs. Now that (i.e. the
relief) does not apply to the model because the model had all 7 issues in a
down trend at the start of the day.
So where are we at the end of the
day? We still have all 7 issues pointing down. And because of today’s advance
the anticipated reversals have been delayed. The bottom line is that the model
is not convinced by today’s up action. To recap, we have all 4 indices in down
trends with reversals about 1 week away (at least – if I am to guess). AAPL
today used up its only green box. Thus, AAPL is starring at red. GOOG remains
in a down trend. And AKAM can reverse to the up side but it needs to wait for
the half-hour model to provide confirmation and that is not forthcoming at this
time. So, the bottom line is we go into Friday with all 7 issues pointing down.
Good luck and Be Brave.
---------------------------------------
Wednesday, January 30,
2008:
The market is remaining volatile. It
is up – it is down. It is all over the place. Anyway. Enough rhetoric. All 7
issues are pointing down. The reversal I posted several days ago for GOOG was a
mistake on my part. Sorry about that. One of the reasons for the mistake is the
fact that I have to combine the results from 2 models. I need a bit more
practice.
So all 7 issues (4 indices and 3
stocks) are pointing down. They have been that way from the end of 2007. I have
not been able to log any buys in 2008. But they will happen. I just don’t know
when. If you look at the 4 indices, you
can see green boxes in the ‘future’ windows. The green is not far off. With
regards to the stocks, we have AAPL which has wasted its green boxes and now
has red boxes filling the future window. Thus, on a short term basis AAPL is
deviating from the markets. It is weaker than the markets. And finally we have
AKAM and GOOG. If you look at their graphics, they look very comparable to the
graphics of the indices. So AKAM and GOOG are now tracking the markets. Stay
tuned and good luck. Be Brave.
---------------------------------------
Tuesday, January 29,
2008:
NOTE: It is Tuesday night.
I cannot update the site tonight – however, I have run the data through the
model. The first thing to report is that I ‘screwed’ up with GOOG. It had not
reversed as I thought. I made the mistake. I am really sorry. GOOG like all the
other 6 issues remain in down trends. Maybe that explains why it looked strange
that the model had GOOG pointing up. It was NOT pointing up. I made the error.
So I will have to remove the buy from the table in link #6. Anyway, such is
life – there is little else I can say. The bottom line is that all 7 issues
continue to point down. Stay tuned. I should be back Wednesday evening. I hope.
To top things off, I cannot upload my stuff to ‘tripod’. So if you tried
accessing recently, you got an error message. Oh, what a life. So I am in a
double sorry situation. Ouch. Good luck.
---------------------------------------
Monday, January 28,
2008:
The market is back to its old tricks.
Down 170 on Friday and then up 170 today. Obviously, this market behavior makes
tracking it difficult. We went into Monday with 6 issues pointing down and 1
pointing up. And so what happened – I got all 7 wrong. The issue that I had
pointing up was GOOG and it went down. The others were in down mode and they
all went up. So, what happened, you ask. Well, for starters, nothing changed
today. We still have 6 pointing down and one pointing up.
There are days which go against the
trend. What is important is the net change over a span of time. What will
tomorrow bring – I don’t know. But I do know (or at least I think I do) that
there will be more down action than up action before we reverse. My comments
from Friday still hold at the close today. Stay tuned and good luck to all.
Incidentally, I am not side stepping
the performance of the other 2 sites. They did well today. They certainly did
better than I, but the game is longer than one day, so let’s not jump to
conclusions just yet.
---------------------------------------
Friday, January 25,
2008:
My field trip is almost over. We
come back Saturday morning. It is Friday night – the students are partying and
I am writing this commentary. Let’s review what we had the last few days. Both
Wed and Thurs were strong up days for the Dow, however, the model kept all 7
issues in down mode. This has been true for the entire month of January. But,
today, Friday, we had the first change in trend – even if it looks like it may
be short lived. We have GOOG in an up trend. You can go to link #6 below to get
the time and price when this happened.
So let’s review where we are at
after the close on Friday. If you review the graphics below you find that the
four indices (Dow, S&P500, Nasdaq 100 and Russell 2000) all have red boxes
in the ‘future’ windows. Thus, the coming week is not encouraging.
We have AAPL pointing down (because
of the half-hour model at this time). And we have AKAM also pointing down (like
the market indices). The only issue that deviates from this general tendency is
GOOG. It is now in an up trend but it can quickly revert back to the down side
– look at the graphics.
So, the bottom line is that we are
not out of the woods. We are still faced with down trends. And even GOOG’s up
trend can be easily reversed. I just checked and found that GOOG reports its
earnings on Jan 31 after the close. What is interesting is that the model has
GOOG reversing to the down side just before earnings (possibly). Another
interesting test for the model is upon us. Stay tuned. Be Brave.
On Sunday I added the following
section. Let’s review where we stand after the close on Friday and where http://www.americanbulls.com (AB)
stands. For the Dow and the S&P500 and the Nasdaq 100, we have them
pointing down while AB had all 3 pointing up on Friday but then issued a
‘Sell-If’ for Monday for all 3 indices.
For the Russell 2000 we had it
pointing down on Friday and so did AB.
For AAPL, we have had it pointing down
for some time. AB had AAPL pointing up but then on Friday they posted a
‘Sell-Confirmed’ for AAPL.
For AKAM, we have had it pointing
down for some time and so has AB.
For GOOG, we had it reverse to the
upside on Friday. Meanwhile, AB has GOOG pointing down. Let’s see where we go
with this. Stay tuned. So the bottom line is that while AB has 3 indices
pointing up it may reverse them to the down side on Monday.
Another site I have assessed over
time is http://www.stockpickreport.com
(SPR). My general feeling is that it is less accurate than AB. So what is SPR
saying? It has all issues as strong buys except for AAPL which it has as a
sell. Note the difference between SPR and AB and also between SPR and myself.
Note: I cannot update this site on Thursday
evening; however, I have run all 7 analyses. The bottom line is that all 7
---------------------------------------
Thursday, January 24,
2008:
Note: I cannot update this site on Thursday
evening; however, I have run all 7 analyses. The bottom line is that all 7
issues remain in down trends. Yes they are close to reversing to the upside,
however, it has not happened yet. Let’s look at the 7 issues individually. We
have SPX and NDX that are identical. At this time there is only one green box
left in the future window and then we have red. However, the half hour data is
still negative. Thus, the trend remains negative. Meanwhile the Dow and IWM
today had their last green box consumed. Thus, starting Friday, the futures
boxes are red. And the half-hour continues red. Thus, the trend continues in
down mode.
AKAM
continues in down mode – even with its large jump today. AAPL and GOOG are in
down trends because of the half hour model. Their daily model results are now
pointing up – this means that the upcoming boxes in the future window are
green. But the overall trend remains down.
Given
the large jumps in the market in the last couple of days, it is making this
call interesting to say the least. Let’s see how the market comes out of this.
Where is that elusive buy?
---------------------------------------
Wednesday, January 23,
2008:
NOTE: I cannot update this site on Wednesday
evening. I have arrived with the students – it is midnight and to top it off
the router for my room is not working. I am writing this from another
connection in the lobby. I have checked the Dow and it has stayed in a down
trend. I will admit it was close but the bottom line is that it remains in a
down trend. I will assume the S&P did the same. The NDX surely stayed in a
down trend. The IWM – I do not know. With regards to the 3 stocks, we had AAPL
and GOOG down today, so you can safely assume the down trend continues for
them. And then we have AKAM. Given the red it had in the future window, it is
safe to say it also stayed in a down trend. Thus, the bottom line from what I
can see (and the only analysis I could run was for the Dow) is that the down
trend remains intact for all 7 issues that I follow. This is definitely very
exciting stuff but given that I am away, I am at a disadvantage. I will be back
home on Saturday afternoon. Thus, if all else fails, I will have the site
updated by Sunday morning. I will do my best to update it on Thursday evening
but cannot make any promises. I will however try to post at least a few
comments – like this evening. Good luck.
---------------------------------------
Tuesday, January 22,
2008:
What a day. There was much
anticipation of a dramatic drop. Initially it materialized and then Ben B.
stepped in. I hate when the Fed does that. It acknowledges that there are
massive problems. It gives false hopes which in the end back fire. Anyway,
enough about the Fed. Let’s look at the markets.
Last Friday we finished the week
with all 7 issues I follow in down tends. In reality all 7 issues have been in
down trends from the end of 2007. I haven’t been able to log a buy in 2008. But
it will come. The question is when. With regards to the 7 issues, they are all
still pointing down at the close on Tuesday. As time passes the green boxes in
the ‘future’ window of each graphic are being squeezed by red upcoming boxes. I
won’t try to speculate what will happen. For now the trend is down and that
applies to AAPL.
At the close today, AAPL reported
its earnings. I have had AAPL in a down trend from a level of about $195. Today
it closed at about $155. But with the release of earnings, it went below $140.
There are many on the AAPL board who took quite a bath today. It is disturbing
to see so many investing money they can’t afford to and then being taken to the
cleaners. But there is little I can do about it.
At this juncture we need to take the
markets one day at a time. Moves can be extreme and volatile. I am confident
however that the model will keep us focused and on track. Good luck to all.
As a final note, I will be traveling
tomorrow evening. I am on a field trip with the students for several days. I
will try to update this site late Wed. evening. In the meantime, hang in there.
Sooner or later we will see a light at the end of the tunnel we are in. Stay
tuned. Be Brave.
Before I close out the evening, I
would like to point out that http://www.americanbulls.com
today issued a buy for AAPL and it also issued a buy-if for the Nasdaq 100. I,
of course, have both in down trends.
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Friday, January 18,
2008:
What a week it has been. If you were
long, you took a sizeable hit. If you were short, you made a few bucks but you
too are worried about the outlook. I was short going into the week and I’m not
happy. The current situation is too extreme, too volatile, and too worrisome. I
would like to see much more stability in the markets.
Friday’s trading was erratic. There
were substantial moves both up and down. So what does the model see? All 7
issues remain pointing down. One issue, AKAM, differs from the rest in that
it’s locked into a short term down trend. Note the term ‘short term’. I use it
because that is all the model can analyze. As I’ve stated forecasting (or if
you like – tracking) the markets is like forecasting the weather. The term
forecast is not correct. The weather person does not forecast – he/she tracks
(that’s my preferred word) the weather patterns. It’s is no different than
tracking a package with UPS. I do the equivalent with the markets. It’s all in
the algorithms.
So where are we? The 4 indices and 2
stocks could reverse to the up side but to do so they need the half-hour model
to confirm such a reversal. And the half-hour model refuses to do so.
Meanwhile, the green in the future window is being compressed by up coming red.
Thus, if reversals don’t happen in the next day or two, we will enter another
down leg of this correction. At this point, we need stability and a bit of
upward action. If we don’t establish an up trend soon we will see more downward
pressure by week’s end.
Stay tuned and good luck. Be Brave.
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Thursday, January 17,
2008:
Today (Thursday) was another bad
day. It is hard to believe we are down as far as we are. Who would have thought
that we would be down to 12K on the Dow. Anyway enough. On a personal note I am
with the model on the down side (options that expire tomorrow). But I want
stability – I don’t want ridiculous moves. Now that I got that out of the way,
let’s get on to business.
As I stated yesterday, there is
light on the horizon, at least for the daily model. But the half-hour model is
not ready to confirm an up trend just yet. It is looking for some stability. So
hang in there. Keep your eyes on the graphics below. As we go into Friday, we
have all 7 issues pointing down. Options expire tomorrow. Maybe that will help
add a bit of stability. I don’t want up 300 and down 300. I want up 40 and down
40. I hope we will get back to those days. I’m sure we will – but when?
Stay tuned and good luck. Be brave.
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Wednesday, January 16,
2008:
Today (Wednesday) was a bit better
than yesterday. Technology still had a tough time (carry over from Tuesday)
but, overall it was alright. As some of you know, I post my past commentaries
at the bottom of this page (i.e. following the graphics). Let’s put the past
behind us – let’s focus on the upcoming days. If you look at the graphics you
see a fair amount of green in the future windows. I’m sure most are happy to
hear that. One issue differs from the rest. It is AKAM. So what is in store.
Not much positive to say about AKAM at this point. AKAM has one green box left
and it will not likely be confirmed by the half-hour model but regardless, it
is followed by red. Thus, for AKAM the short term future does not look
good.
Let’s now look at AAPL and GOOG.
They are both set to reverse to the up side. All they need is confirmation by
the half-hour model. We need to focus on them one day at a time. It can happen
any time. However, when I look at the data I suspect that it will not happen
this week – but that is just a guess. When we look at the four market averages,
we find that they too are comparable to the 2 stocks (AAPL and GOOG). Reversals
to the up side are directly ahead, however, they need to be confirmed by the
half-hour model. I should add that the half-hour model is currently negative on
all 7 issues. Thus, I know the reversals will happen but exactly which day – I
don’t know. So stay tuned every day and good luck.
This has been a difficult start to
the new year. It has been anything but happy to date. However, I think we are
very close to some relief. Hang in there. Be brave.
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Tuesday, January 15,
2008:
For the technology stocks, this was
Black Tuesday. Things were bad going into the close, but they got ugly after
the close with INTC’s report of earnings. The Nasdaq 100 was down about 4.5%
(in total) last time I checked. That’s frightening. When I think of the
futures, a drop of about 5% wipes you out. An expiring option can also wipe you
out but that would happen much more slowly. What I saw today has me rethinking
the viability of the trading of futures. In fact, I am formulating a strategy
which couples the buying of options and the selling of credit spreads as the
alternative. Things are looking really good. A large part of my optimism is the
combined, hybrid model. All I can say is ‘Wow’.
Today (Tuesday) was a down day – a
very negative day – about 270 points. Yesterday (Monday) was a strong up day –
about 170 points. At the close on Monday I said (you can scroll to the bottom
of the page to read it again) that all 4 indices and the 3 stocks (AAPL, GOOG
and AKAM) remained entrenched in down trends. As one reader emailed me –
“that’s a bold move”. What is interesting is that all 7 remained in down trends
(not 1, not 2 but all 7). Thank God, because obviously that’s where they
belong. BUT and note the capitals, the model is now seeing some light on the
horizon. Reversals to the up side can start happening as early as Friday.
Naturally, as I’ve stated in the past, the daily model which is what I present
in the graphics below needs to be validated by the half-hour model. That aspect
you don’t see but I run both models every day and I post the outcome (and take
into account the validation component).
If you look at the graphics below,
you will see some green appearing in the ‘future’ window. If we can get the
green to cross the central divide, then we will have ourselves a ‘short term’
reversal to the up side. I know that the current down draft coupled with the
expiration of options and the use of margin has created pain for some. I was
looking at the message boards for the 3 stocks I follow and I was amazed at
some of the stories especially for AAPL. Many have taken sizeable hits. I wish
them well.
Before I close out my commentary
today, I want to remind you that I am an engineering professor who has worked
on quite a few research projects. Many of the times things do not work out as
well as anticipated but once in a while you hit on something that is exciting,
and when you do – you know it – even though you don’t have it all figured out –
you know it is a significant find. I say this because that is the way I feel
about the model. It has done remarkably well with this down trend. When I
created the combined model, I could see that this was one of those times when
you yell out ‘Yes’.
Soon the model will reverse to the
up side. Now won’t that be exciting, especially in light of what has happened
recently. If it can nail the reversal to the up side, then it becomes clear
that it is a viable, short term trading tool with ‘vast’ potential. Stay tuned
and good luck to all. Be brave if you are long, hang in there because ‘some’
relief should show up soon.
Incidentally, your comments are
always welcome. One individual asked about the availability of the results of
the half-hour model. The short answer is: I have no plan to do so. Another
individual (Mary S.) sent me a nice email. I acknowledge her message and wish
her luck with her holdings. And, I encourage her to continue to do what she is
doing.
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Monday, January 14,
2008:
Monday was quite a day – up 170
points. The swings are awesome. As we went into Monday, the model had all 7
issues in down trends. You can verify (i.e. check) what I have said on previous
days by scrolling to the bottom of this page. There you will find my past
commentaries. So what effect did today’s up move have on the model. Basically,
none. It continues to have all 7 issues in down trends. So, the bottom line is
that today’s up move for the 4 indices and 3 stocks I follow is not seen as the
start of the next up trend. It is simply one of those oscillations that keeps
the game ‘honest’.
Naturally, the model will reverse
coarse if it deems that this should be done. However, when I look at the data,
I see that starting tomorrow we are going into the next leg of the down move.
It certainly will be interesting to see how this plays out. If I had to
speculate I would say that we will be in the red for the week. Given today’s
substantial up move, we will need to give it all back for me to be right.
That’s the way I see it at the close on Monday. When we do get a buy signal, I
will post it in the table found in link #6. Until tomorrow, good luck to all.
I realize that there are a number of
individuals with call options (AAPL etc..) that are out of the money and which
expire on Friday. Take what I say with a grain of salt. I realize that MacWorld
etc.. starts on Tuesday and everyone is hoping for a ‘big’ bounce for AAPL.
However, the model does not see it. What to do is up to you – be brave – good
luck.
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Friday, January 11,
2008:
Another painful day has come and
gone. I realize most are long and such dramatic drops cause hardship,
especially in light of the fact that there have been quite a few dramatic down
days of late. The regular readers know that the model has had all 7 issues I
follow in down trends. It has done very well. I am still waiting for buy
signals so that I can start populating link #6 where I will show the up and
down moves the ‘combined’ model generates. For the last few weeks all 7 issues
have been in down trends. Thus, there are no entries in the table. Don’t
despair. The reversals will come but we will need to wait for a while. Let’s
take it one day at a time.
If you look at the graphics below,
you will find that the ‘future’ windows for all 4 indices are now completely
red. In other words, the boxes in the ‘future’ window (on the right) are all
red. So next week does not look encouraging. On another note, I have started to
collect the past commentaries at the bottom of this page (after the graphics).
The latest commentaries are first. I add to the top of the list. I am pleased
with the model. Thus, I am now going on the record with my comments and my
moves. My objective remains to reach the million mark in 2 years (from Jan 2008
to Jan 2010). I am currently at about $4K. Incidentally, I am back to options,
however, I may also trade futures. Time will tell. I want to document ‘My
Journey’ as I attempt this ‘feat’.
To round out the analyses after
Friday’s close, we have AAPL and GOOG looking like the markets. The difference
is they still have a touch of green in the future window. However, the half
hour model is negative and so the remaining green will simply be consumed by
upcoming red boxes. AKAM is in a similar position, however, it has a few more
green boxes (3 in total) that it can convert to a short up move if the half
hour model gives it the go ahead. But, don’t hold your breath. The bottom line
is that things have degenerated this past week. The possibilities for reversals
have been reduced dramatically. But, as I said before, there will be reversals.
Keep the faith. Stay tuned and good luck.
As a final point, if you look at
yesterday’s comments you will note that americanbulls (AB) at the close on
Thursday came out with buy recommendations for all 4 indices. Well, at the
close today (Friday) they issued sell-if recommendations for 3 of the indices
(Dow, S&P500 and Russell 2000). They kept the buy for the Nasdaq 100. In
addition, yesterday they issued buy-if recommendations for AAPL, GOOG and AKAM.
Today, they cancelled all 3 buy-if’s. It is nice to be able to compare my
results to something. Your suggestions are welcome.
Finally, I received several e-mails
from readers who are holding Jan call options for AAPL and some indices. This
week they saw their funds evaporate. Unfortunately, there is little I can say
that will help. Options are a difficult game. The big winners are the
‘writers’. If you are buying options, you need a system – you need a strategy.
If you don’t have one (that you can trust), leave options alone. There are too
many pitfalls.
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Thursday, January 10,
2008:
The markets were ‘wild’ once again
today. There is too much anxiety and uncertainty. However, in all fairness, I
am not complaining. It is exciting and it is an excellent opportunity to test
the ‘combined, hybrid’ model. I am now back to trading credit spreads.
Now let’s look at the model. You
have 7 graphics below. The first 4 are identical, and the next 2 that follow
the first 4 are the same and then we have #7 on its own. So what are the first
4. They are all market indices: Dow, S&P500, Nasdaq100 and Russell 2000.
They have been waiting to get into an up trend but the clock has just about run
out. The green on the right side (the ‘future’) is all but gone. On Monday,
there will not likely be any green boxes left. Thus, all the 4 indices are
looking at some more down side action. They will remain in down trends for some
time to come.
The next 2 issues are AAPL and GOOG.
They too have identical graphics. They are in down trends like the indices and
hope for a reversal to the up side has all but faded. They each have 2 green
boxes left and then red takes over. The last issue is AKAM. It has the best
opportunity for a short reversal to the up side but given the way it’s been
hammered, I don’t think it will do it. And even if it did, there are red boxes now
coming into the ‘future’ window.
Today is an interesting point in
time to compare the model to http://www.americanbulls.com (AB). Look at the 4 indices first. They have
had the S&P500 in a buy for several weeks. They have taken a loss on that
stance. At the close on Thursday, they maintained a buy rating. Meanwhile, I
have had a sell on the S&P500 and that strategy is about to be reinforced
by the model. I have high regard for AB. I think they are one of the better
trading packages (free version). I enjoy looking at their site and do value
their views.
The other 3 indices (the Dow, the
Nasdaq 100 and the Russell 2000) were all converted by AB to ‘buy confirmed’
status at the close today (Thursday). I, on the other hand, have the model
saying that a new down leg (short term) is about to begin for all 3 of these
indices. For the 3 stocks (AAPL, GOOG and AKAM) americanbulls today issued a
‘buy-if’ recommendation. And again I have all 3 in down trends with little room
for upside potential.
Today, I started collecting the past
pages at the bottom of this web page. So for those who would like to see what
was said in the past, you are in luck because I have now started posting the
past pages (I have started with yesterday’s). If you go to the bottom of this
page you will find yesterday’s comments. Take a look.
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Wednesday, January 9,
2008:
Another ‘wild’ day has come and gone.
As we started Wednesday all 7 issues I follow were in down trends. Now, it
looks like there will not be an up trend because the green boxes in the
‘future’ space of the graphics are being squeezed out by red boxes. That’s the
way things also looked at the close on Tuesday. On Wednesday we had to deal
with a loss by Barack and a jump of 150 points by the market. I’m just kidding
about Barack – he put in a splendid performance. But Ms.
Now let’s get back to the markets.
They finished very strong today (Wednesday). So what does the model think. The
results are unchanged. All 7 issues continue to point down. Moreover, it is
actually starting to look ‘worse’ because the half hour model will flash a
‘sell’ around lunch time on Thursday (tomorrow). This is what I see with Wed’s data.
In addition the daily model has given us some hope with the green boxes we see
in the graphics below. But, those green boxes are being eaten up by oncoming
red boxes. The bottom line, if I am asked to speculate, is that today’s up move
is not the signal of a change in down trend. There is more down action on the
horizon.
As a final point I visited http://www.americanbulls.com and found
that they still have a divergence between the Dow and the S&P500. They have
had the Dow point down for a while. Today they said the Dow is now a ‘buy-if’.
On the other hand they have had the S&P500 pointing up for quite a while
and today they issued a ‘sell-if’. How they can have the 2 indices with such a
divergence for so long is baffling. I have the Dow and S&P as virtually
identical. Good luck and stay tuned.
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