The heat map is a little confusing by itself. "Now" is at the far bottom. I am using 5 day simple moving average, 10 SMA, and 20 SMA.
I posted this reply to a question:
"Sorry doodlebug, that heat map is a proprietary thing with all kind of custom settings on custom data.
I use it as follows
Light Red I scale into shorts
Deeper red I add shorts
Tan means I scale out of shorts or longs (nuetral)
Light blue I scale into longs (or hedge shorts with futures)
Deeper blue I add longs or long hedges -- but seriously, if its deep blue...I would rather be out of all shorts and heavy long."
The 5 and 10 day have returned 58% and 52% annually during trending markets. Lately the 5 has been OK and the 10 has been whipsawed pretty badly as we top out through this 29 calendar day cycle.
I may muster a 15 day cycle since that would pretty clearly match the half cycle period that seems predominant right now. Check next week. I usually superimpose this on a frankensteinian conglomeration of 4 or 5 charts melded into one, and that takes alot of time.
I am quite good at Excel charts, but have not come up with a way to automate the process and presentation.
I see from some of your other postings that you use thinkorswim. is that heatmap available on TOS? Also, how do you read it (when I click it on the type is so small I can't read the numbers even if I enlarge it - so I can determine it myself)?
ReplyDeleteSorry doodlebug, that heat map is a proprietary thing with all kind of custom settings on custom data.
ReplyDeleteI use it as follows
Light Red I scale into shorts
Deeper red I add shorts
Tan means I scale out of shorts or longs (nuetral)
Light blue I scale into longs (or hedge shorts with futures)
Deeper blue I add longs or long hedges -- but seriously, if its deep blue...I would rather be out of all shorts and heavy long.
that's okay. I understand. Thanx for the feedback on how you read it. But it seems there is alot of blue (more blue than red) which by your criteria would mean to be long. So I still don't understand your overall interpretation.
ReplyDeleteanyway, thanx for the all charts etc. As somone said below, it is a public service. To try to add something useful to the discussion, I'll point you to http://www.ttheory.com/ which is a site put out by TErry Laundry who came up with his own form of technical analysis (I am not affiliated). BAsically, as I understand it, he looks for declining tops in the advance-decline line which he considers a cash buildup phase (people selling to cash in profits or to limit losses) and when the advance decline line makes a new high the market is in an uptrend equal in length of time to the cash buildup phase. You can check out his site.
thanx again for your all work. It is very interesting.
I forgot add that while he thinks a pullback may occur this week, he is actually quite bullish through either may 2010 or august 2010.
ReplyDeletedoodlebug, the far bottom is now, day by day. Red, Red, Red (well light red). These are strange and dangerous times.
ReplyDeleteWhile I agree that the s&p should drop to the area you suggest, I am more of the mind that we might see it hang in this 1080 to 1110 range until the MAIN event...which I believe is very very soon now. Next few days will be telling IMO.
ReplyDeletejammer