My Market Indicator
20 06 2007
I have not been posting mainly because the market is boring for me right now. It is too extended to buy and too tricky to short. So in the meantime, I’ve been working on some new indicators that I’ve come across and making some pretty interesting discoveries.
I recently posted about how I reproduced the TD Ratio indicator invented by Tom DeMark. I did some visual backtesting and found a pretty good performance record. I was intrigued and went to the library to check out some of DeMark’s books to learn more. I quickly became interested in his TDST lines and TD Sequential and TD Combo indicators.
The primary purpose of these tools is to identify periods of price exhaustion where the risk to long and short entries are minimized. I think I’ve made a nice improvement to the TD Combo countdown process and will give some examples of market tops and bottoms.
It should be no surprise that the market is signaling a top and should not be bought here.
I’m showing the lows of last summer and the buy signal generated by my indicator. I will present more tops and bottoms in the future.
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My apologies
19 06 2007
Sorry for the lack of post again. I’ve been working on the Blocks program and I’ve come up with some really cool indicators.
I’ll write more about this soon.
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I can’t resist this Cramer bash
12 06 2007
I have had a free Real Money subscription for the last few months through their college subscription promo. The site is almost completely worthless and I would never pay money out of my pocket to have access to it. I say almost because Rev Shark writes daily “pep talks” for the average trader and offers some great insights into how a trader should think. I can do without the rest of them.
On the surface, Real Money seems like a good idea for the average investor, but nothing could be further from the truth. One must trust his or her own judgements and cluttering one’s mind with all of the ideas spewing out of the website can only serve to confuse and instill doubt. I would like to thank Rev Shark for his advice, but good ridance to RealMoney.com
As one might imagine, Jim Cramer is the absolute worst on site. He is so incredibly capricious that it might be worth the subscription price for the laughs alone. Check out what I saw today. He declared that the homebuilder sector was in a bear market. DUH!!!
Here is the chart of the homebuilders. Once again…DUH!!!
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QQQQ Broadening Top
11 06 2007
One of the reasons why I bought some of the QID on Friday is because of the broadening top formation that has formed. There is disagreement about the price projections of broadening tops, but most agree that it is a major top formation.
The chart pattern appears on both the weekly and daily charts.
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Categories : QID
TD Pressure Cumulative Index
11 06 2007I was reading the Tom DeMark interview in Active Trader magazine and decided to put together his accum/dist indicator using the Blocks Player.
DeMark calls it the TD Pressure Cumulative Index. Here is what the block diagram looks like.
Here is what it should look like.
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Shorted the close on Friday
11 06 2007I didn’t write anything over the weekend because my Internet was down at home. I just wanted to update my overall market strategy. I shorted the Nasdaq 100 near the close on Friday. It was a huge rally, but on very weak volume. I’m expected a deep correction and I planned on getting in on the first bounce.
I’ll write about the technical pattern that has been formed on the QQQQ later tonight.
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Market Gameplan
7 06 2007
The downtrend looks like it has started. It is now time for a game plan.
If there one thing that I’ve learned it is the market never does the same thing twice, unless of course everyone has had enough time to forget about what has happened. During the last down spike, everyone was looking for a larger correction, just like what happened during the summer of 2006. Of course what ended up happening was that the market shot down, sucked in a bunch of shorts and then shot right back up. I would expect a lot of people are looking for the same type of reaction. The only problem is that there are already a ton of shorts.
So what is my plan? I expect everyone to jump back onto the long side too early. I’m going to short the first big up spike (around 200 Dow points) and then ride it down. I’m also going to start building my buy list and will get very aggressive if we get a solid follow through day.
On a final note, I find it funny that so many people are finally talking about interest rates. Anyone who has been listening to TFNN has been expecting this break in bonds for months. Inflation is going up. Rates are going up. It is simple. Tom O’Brien is expecting a bear market due to stagflation. Will he be right again?
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The end is near…
6 06 2007
It started with the Red Sox winning the World Series and now Bob Barker has taped his last “Price is Right” show.
How will we endure? I’m not sure we can.
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Sold Mitcham Industries (MIND)
4 06 2007
I sold 80% of my Mitcham Industries postition before earnings came tonight. I picked it up on the lower channel line for $14.30. I’m expecting a “sell the news” reaction post conference call. I’ll look to pick up more shares when it is back down to the lower trend line.
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Categories : MIND
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