Financial topics

[Higgenbotham]

http://stockcharts.com/def/servlet/Favo ... =ID4511625

Here's an interesting set of charts I follow from Terry Laundry.

Going down to the 4th chart, gold has traded inside the envelopes.

In the 5th chart, stocks also traded inside the envelopes...until 2 days ago. I tried to find a similar chart going back to the 2008 crash but couldn't find one. Going back to the 2009 low, stocks did trade inside the envelopes at that point.

The second chart shows the advance decline line. In theory, the stock average normally won't make a high until the advance decline line makes a lower high. It can be seen how that happened in July and October 2007.

My thought has always been that if the stock average drops off very sharply from a peak in the advance decline line, when the advance decline line does make a lower high stocks won't necessarily make a higher high.

[vincecate]

US market off about 2% Sunday night pre-market.

http://money.cnn.com/data/premarket/

[jdcpapa]

I revisited the numbers for 2010:

Taxes and fees.........................1,296,950................1,296,950
Social security.......................... 864,795

Total sources...........................2,161,745...100%........1,296,950


Administration...........................362,323.....17%........28%
Defense, security, law enforcement...903,036.....42%........70%
Debt service..............................413,955.....19%........32%
Food stamps...............................93,829
Medicare..................................525,640
Medicaid..................................271,771
other social programs....................94,938
Total social programs...................986,178.....46%.........76%
Social security............................754,179....35%
NASA.........................................25,626..................2%
International assistance...................20,038..................1%

Total outlays.............................3,465,835

The numbers speak for themselves!

[Higgenbotham]

http://csiwallstreet.com/august-2011.htm

Like all of us, this guy isn't always right, but when he is right, it's deadly accurate. He studies the cycles like nobody else I know of (check out the rest of the site for his 2008 crash call). It shows the panic likely abating for now, then worsening in late August. My best guess is roughly the same, so thought I'd post this as a reference. From what I can remember he's a stock broker in Beverly Hills and is married to a famous actress. Nice of him to share his work because he puts a lot of effort into it. From the site: "Approximately 750,000 portfolios were created to participate in the 2008 CNBC trading contest which ended in July. I was able to finish in the top 25 by utilizing some of the market timing strategies mentioned in this website."
"2008 was characterized by a series of stock market panics, all of which were forecasted here at CSI: Wall Street well before they occurred and often to the exact day. I’ve often been asked if I’ve discovered some type of stock market Holy Grail but it’s not that simple. There is no single cycle or magic number or ratio that controls stock market panics (at least I haven’t discovered it). The only way to describe it is that the stock market gives clues by exhibiting certain “symptoms” and “tendencies” before it goes into panic and crisis mode. I’ve identified many of these tendencies after years of watching and studying the market and created indicators based upon them. When these indicators cluster heavily around certain days, it is best to be out of the market. But, as in nature, just because conditions are perfect for the formation of a tornado, that does not guarantee it will actually occur. Likewise, there is always a large element of uncertainty with the markets.
My goal in creating this site in January, 2008 was to prove that stock market panics can be accurately predicted. I think I’ve proven that and will leave this site up for a while (but other obligations will probably prevent me from updating it) so that others can learn from it, as 2009 also promises to be another volatile year. So, the next time somebody tries to tell you that it’s impossible to forecast the stock market, reply “maybe, maybe not” and refer them to this site."

[OLD1953]

If you regard the market as a complex signal which you want to decode into its basic regular components, you get papers like this:

http://www.bilkent.edu.tr/~sayan/Resear ... RPaper.pdf

Signal theory is all about separating signal from noise, and that's what you are trying to do. A good electronics engineer would likely have some mathemetical insights into the market you won't get anywhere else, assuming you can pull him away from his equipment long enough to get him to look at the market as a signal.

[John]

JP Morgan has just revised its prediction for the S&P 500 index
at the end of the year.

The old prediction was 1450.

The new prediction is 1400.

At this moment, the S&P 500 futures index is at 1168,
down 29.

The DJIA futures index is at 11144, down 258.

[JLak]

A good electronics engineer would likely have some mathemetical insights into the market you won't get anywhere else

If you ask me to isolate the signal, you have to identify what 'the signal' is, and it has to originate from a different source mechanism than the noise.

[John]

The following is from my DJIA page:

The market had fallen 16% since it reached its peak on September 3,
but no one was concerned. In fact, pundits said that it was time to
buy. Everone believed that the economy and the market were
"fundamentally sound" (that phrase is a sure sign of trouble), and so
few suspected that anything was wrong.

Date DJIA (Change) (% of trend) (% of 1929 high)
----------------- -------------- ---------------- ----------------
Mon 1929-10-21 320.91( -3.71%) (213% of 150.23) ( 84% of 1929-09-03)
Tue 1929-10-22 326.51( +1.75%) (217% of 150.25) ( 85% of 1929-09-03)
Wed 1929-10-23 305.85( -6.33%) (203% of 150.26) ( 80% of 1929-09-03)
Thu 1929-10-24 299.47( -2.09%) (199% of 150.28) ( 78% of 1929-09-03) Black Thursday
Fri 1929-10-25 301.22( +0.58%) (200% of 150.30) ( 79% of 1929-09-03)
---------------------------------------------------------------------
Mon 1929-10-28 260.64(-13.47%) (173% of 150.36) ( 68% of 1929-09-03) Black Monday
Tue 1929-10-29 230.07(-11.73%) (152% of 150.38) ( 60% of 1929-09-03)
Wed 1929-10-30 258.47(+12.34%) (171% of 150.40) ( 67% of 1929-09-03)
Thu 1929-10-31 273.51( +5.82%) (181% of 150.41) ( 71% of 1929-09-03) (half-day)
---------------------------------------------------------------------
Mon 1929-11-04 257.68( -5.79%) (171% of 150.49) ( 67% of 1929-09-03)
Wed 1929-11-06 232.13( -9.92%) (154% of 150.53) ( 60% of 1929-09-03)
Thu 1929-11-07 238.19( +2.61%) (158% of 150.55) ( 62% of 1929-09-03)
Fri 1929-11-08 236.53( -0.70%) (157% of 150.57) ( 62% of 1929-09-03)
---------------------------------------------------------------------
Mon 1929-11-11 220.39( -6.82%) (146% of 150.62) ( 57% of 1929-09-03)
Tue 1929-11-12 209.74( -4.83%) (139% of 150.64) ( 55% of 1929-09-03)
Wed 1929-11-13 198.69( -5.27%) (131% of 150.66) ( 52% of 1929-09-03)
Thu 1929-11-14 217.28( +9.36%) (144% of 150.68) ( 57% of 1929-09-03)
Fri 1929-11-15 228.73( +5.27%) (151% of 150.70) ( 60% of 1929-09-03)
---------------------------------------------------------------------

** Great Depression and Dow Jones Industrial Average
** http://www.generationaldynamics.com/cgi ... 010.i.djia



Jeremy Siegel just said that you should definitely buy right now.
You're rarely get a chance to buy stocks so cheap.

Today feels very much like October 21,22 or 23, 1929.

John

[aedens]

http://generationaldynamics.com/forum/v ... 3610#p9159

As posted: If you are not planning the grand childrens inheritance why would they care about today alone?
Until politics figures out democrats and republicans are the issue it cannot repair itself
and the public already knows this.
I wish to be wrong on this chart...

augustdollar.png (16.85 KiB) Viewed 4932 times

[Higgenbotham]

If you regard the market as a complex signal which you want to decode into its basic regular components, you get papers like this:

http://www.bilkent.edu.tr/~sayan/Resear ... RPaper.pdf

Signal theory is all about separating signal from noise, and that's what you are trying to do. A good electronics engineer would likely have some mathemetical insights into the market you won't get anywhere else, assuming you can pull him away from his equipment long enough to get him to look at the market as a signal.

Engineers understand the concept of "trend" and "cycle" mentioned in the paper. "Step function change" is the difficult concept to incorporate into the engineer's mind.

I took courses in advanced calculus for electrical engineers, fourier series, and electrical engineering (didn't major in EE though). Those courses gave me the idea early on that I could tackle the market with "trend" and "cycle" methods.

Then I read a book called Market Wizards and one of the wizards said, "What works most of the time doesn't work in the long run." That was the "a-ha" moment. It's another way of saying what Galbraith said, basically that you can lose everything you've ever made during the short time that normal operations go haywire.

For that, enter the meteorologists, seismologists (Sornette for example), astrologers (Gann for example), Generational Theorists, assorted cranks, and anyone else I left out.