Dow

[srowe]

It pays to take note of what others are predicting.It reflects research done by those who predicted the last crash.If your right ,you can be happy,but if the Bear comes ,youll know who to listen to next time. Either way,you can benefit.

[ananda77]

It pays to take note of what others are predicting.It reflects research done by those who predicted the last crash.If your right ,you can be happy,but if the Bear comes ,youll know who to listen to next time. Either way,you can benefit.

well said...

...and if someone does not like it in the update soup, they can just ignore it

Page 38, Dr Who will give you an idea

Kind Regards

[ananda77]

...another High *1039 for the SPX 500 in 2009 followed by another mild sell-off (transfer = bear-speak) to currently *1030'ish which looks like another consolidating attempt before trading shut-down for the week

...the trading action remains supportive as long as SPX 500 *1000/*1008/*1018 are not taken out; this floor leaves enough bullish potential in the SPX 500 for another High next week as soon as *1044 eats dirt in a bullish effort to reach *1050/*1075/*1100 (+)

...the Oct High *1072 carries the potential for the SPX 500 to probably top out at the 50% retracement of the 2008-2009 Break at *1119;

...the parameters are set so let's get on with it, knowing, that any new High may be the the one before a major sell-off

Trading Strategy: sideline (safest)

-hedge: neutral to bullish bias to *1018/*1044/*1100; no equity exposure;
-hedge: neutral to short bias with equity exposure; minimum 50% short around *1100

Long Term: THE BEAR

_no guarantees and trading strategies are just ideas_

Kind Regards

[Phaedrus]

The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?

I regard the future as essentially unknowable. Anyone can make guesses as to what might happen, but that is all we can do. Guess. Why waste time and effort futilely striving to predict what the market might do in the future? An accurate and objective assessment of the current market state is more useful than any forecast. Sooner or later, experience teaches you that forecasting is not necessary in order to react logically to changing market conditions. All you have to do is act appropriately as each day presents itself. My objective is to assess the market direction day by day without any preconceived notions as to what it "ought" to be doing. Without any Bullish or Bearish bias. My aim is to get as close as possible to total objectivity.

To this end I have developed a new oscillator, a "Market Sentiment Indicator". It is a composite indicator which is derived from a combination of other indicators. Each of the constituent indicators is itself a "compilation indicator" formed by using a very wide range of time periods on standard indicators and tabulating the results. This means that there is no backtesting, no optimisation and no search for the "best" time period for each indicator. "All" time periods are used.

The Index is charted in different colours which are controlled by the MSI plot as per the inset table.

[sharer]

It has been fascinating watching your development of this new MSI in posts over recent months on various threads, Phaedrus. The philosophy that you have succinctly summarised above as lying behind the reasoning I find very attractive (in fact totally convincing, no doubt because i agree with it!).

Obviously for presentation reasons each recent version analyses this major international Index. Will you soon be able to apply the MSI to major local stocks like BHP.asx or TEL.nzx?
Since i saw your first version posted somewhere i've been trying to imagine various charts of contemplated trades and the volumes & wondering how it might look in your new graph format, for a start. Now the MSI is emerging from the creative caves of your imagination, well, the clamour must begin - we just have to have it! Soon? Soonish?
Of course there will be limitations (i'm guessing you may be sweating behind the scenes to identify these). Will it then become available?
There must be many here like me who can hardly wait.
Thanks for the inspiration.

[ananda77]

...in terms of current market behavior:

...of course Phaedrus' new MSI (congratulations by the way) would be advice to be 100% invested because that is the present market moment in terms of optimism and bullish sentiment;

....looking at another 'The Daily Sentiment Index', it reads at present 89% bullish sentiment;
so 89% of market participants are already more or less invested in the markets and one must wonder where on earth major upward price movements should come from; furthermore, this extreme optimism coincides with prices hitting major resistance points in the US Markets;

...and as the saying goes, of course this time, it may be different, but just before the October Crash Moment, the DSI read 88% bulls and just before the March 2009 Low, pessimism was at its extreme and bearish sentiment read an extreme 98%, which left 2% bulls in the field;

...other than that, I readily agree with Phaedrus' notion: "...the future as essentially unknowable" and "...Why waste time and effort futilely striving to predict what the market might do in the future?"

...in my experience also

--if one wants to know the future, look no further than the present moment
-the next moment is totally and completely unknown but:

...markets are essentially people

-based on observations of current behavior there is potential to make likely (future) assumptions
-market risk can be minimized but never totally eradicated unless one stays out of the markets

WHAT ARE THE CHANCES OF A GREEDY PERSON TO DEVELOP GENEROSITY TOWARDS FELLOW HUMAN BEINGS (and DO be careful not to make futuristic judgements in the moments just ahead of you)

Kind Regards

[pago]

The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?

I regard the future as essentially unknowable. Anyone can make guesses as to what might happen, but that is all we can do. Guess. Why waste time and effort futilely striving to predict what the market might do in the future? An accurate and objective assessment of the current market state is more useful than any forecast. Sooner or later, experience teaches you that forecasting is not necessary in order to react logically to changing market conditions. All you have to do is act appropriately as each day presents itself. My objective is to assess the market direction day by day without any preconceived notions as to what it "ought" to be doing. Without any Bullish or Bearish bias. My aim is to get as close as possible to total objectivity.

To this end I have developed a new oscillator, a "Market Sentiment Indicator". It is a composite indicator which is derived from a combination of other indicators. Each of the constituent indicators is itself a "compilation indicator" formed by using a very wide range of time periods on standard indicators and tabulating the results. This means that there is no backtesting, no optimisation and no search for the "best" time period for each indicator. "All" time periods are used.

The Index is charted in different colours which are controlled by the MSI plot as per the inset table.

phaedrus,where or which site do you use for your charts,cheers pago

[Phaedrus]

Sharer, re running this indicator on stocks. I think you would want it in a somewhat simpler form. You really don't need to differentiate ordinary stock "market strength" into so many categories. Maybe just "Going Up", "Going Down", and "Going Nowhere". Of course, this should be obvious from the price plot, but the idea is to make these judgments totally objective.

Pago, I use MetaStock software to prepare these charts.

[beacon]

The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?

Isn't that predicting as well? Immediate rational action would be impossible unless you had a view (prediction/speculation/reasoning/intuition - call it what you will.) on where things were headed. All TA is aimed at crystal ball gazing, isn't it? And perhaps, so is FA to some extent. One builds on perception momentum, the other on performance history. But both are useful only in where and how they can help us look forward and act accordingly.

Ananda 77 deserves kudos because he stuck his neck out day after day laying bare his reasoning, as well as predictions - and so far he is winning, by my count. TA logic usually comes as hindsight (barring some instances from commentators like you, but then you too get well deserved praise for that), quite unlike Ananda 77's forward looking statements. Macdunk also got credit for his foresight as well as having the guts to voice his market crash call.

I for one thoroughly appreciate well reasoned posts, regardless of whether they were proved right or wrong by the market in the short term....

[Phaedrus]

"The main question here that we all have to answer is "What should I be doing today?" Right now, should I be buying, selling, holding or standing aside?"

Isn't that predicting as well?

No it is not. Right now, my system classifies the current market as being Strong and therefore a market that I should be in. This is not a prediction and in no way should it be viewed as one. I'm not saying it will stay strong. I'm not even saying it will probably be strong tomorrow. The classification could easily change overnight. This is NOT forecasting, which would imply a prediction of future strength at a future time. The essential point here, Beacon, is that this system is totally reactive and is dedicated to assessing the current market condition.

Immediate rational action would be impossible unless you had a view on where things were headed.

Not so. Quite the reverse, in fact. I may hold the view that the US economy is going to Hell in a handbasket, but if the current market is strong, I want to be in it. My immediate reactions would be totally at variance with my longterm view, but I would nevertheless regard my actions as being totally rational.

All TA is aimed at crystal ball gazing, isn't it?

Absolutely not! Robert Rotella in his excellent book "The Elements of Successful Trading" put it very well when he said "Technical analysis is the study of past market behaviour to determine the current state or condition of the market". That's the CURRENT state of the market - not what we think or hope or predict it might be tomorrow.

Both (TA and FA) are useful only in where and how they can help us look forward and act accordingly.

I disagree. You don't necessarily need a forward view in order to act appropriately right now. Act logically each day and your position will always be congruent with the prevailing market conditions.

TA logic usually comes as hindsight

Unfair comment. TA logic is very well documented. The situations it covers are meticulously described in great detail. For example, a common "breakout" Buy signal occurs when, after a downtrend, prices rise on high volume. This situation will either apply or it won't. Where is the hindsight? You might like to take a look at this thread. Well ahead of the event, this post documented a system that would detect any significant weakening of the market, enabling a timely exit before the crash. When the time came, it worked beautifully. No hindsight there!

Right now the market is assessed as being strong, so I want to be in it. I have no way of knowing how long it will remain strong, but so long as it does, I want to be in. When I assess the market as weakening, I will reduce my exposure to it. When I assess the market as being weak, I aim to be totally out of it. No predictions, no hindsight, no crystal ball gazing, - just appropriate, immediate rational action.