Saturday, May 7, 2011
Explaining what already occurred-- Elliot Wave follies
I am sick and tired of bloggers going in detail to explain what just happened. Hell, they might as well go to work for Cramer or CNBC. ...."let's learn from the past."
"Explaining" what happened is a joke, as opposed to posting an opinion on what may happen with what degree of certainty.
At some point, Pretcher and EWI will be vindicated, now they are lambasted, in terms of a P3 prediction. Maybe not soon though. EWI promotes the idea that "no news matters" and I think even goes as far as implying or outright stating that social mood not just creates the news, but actually creates the real world events. In some cases, if you consider governmental action, a "real world event" that could be true.
I do like the 5 wave and 3 wave retracements though. When you see them happening in real time, they are sometimes "perfect" and if you have the ability to recognize them in real time, and bet them, money can be made. Usually these "clear waves" are on a small scale, intra-intra day, so playing them with loads of cash or leverage is the way to go.
"Explaining" what happened is a joke, as opposed to posting an opinion on what may happen with what degree of certainty.
At some point, Pretcher and EWI will be vindicated, now they are lambasted, in terms of a P3 prediction. Maybe not soon though. EWI promotes the idea that "no news matters" and I think even goes as far as implying or outright stating that social mood not just creates the news, but actually creates the real world events. In some cases, if you consider governmental action, a "real world event" that could be true.
I do like the 5 wave and 3 wave retracements though. When you see them happening in real time, they are sometimes "perfect" and if you have the ability to recognize them in real time, and bet them, money can be made. Usually these "clear waves" are on a small scale, intra-intra day, so playing them with loads of cash or leverage is the way to go.
Stops
To use or not to use Stops?
Think if you were long silver futures and has no stop in place? You could have theoretically vaporized a $200k account in the Silver debacle.
However, stops are dangerous also. Esp. since your stop information is usually "sold" from broker to broker so those who run the stops know what their equity curve will look like. No, it is not fair, not proper, not really even morally close to correct, but it is the way it is. The levels of corruption on other matters of even higher magnitude and clarity mean that the issue of your stops being published and sold to the highest bidder will not be one that is addressed soon.
Twiggs does some good stuff, although he is stuck on horizontal resistance, when it is blatantly obvious that sloping channels get way more respect these days. In the old days, when people bought stocks for months or years at a time, a horizontal level was a "squeal point", as in ....if I get back to 35, I will be even money and I will sell. Or conversely, hey I am up 10 points from 50, but if it drops back to 50 I will sell to prevent a loss. Often times there was alot of money placed during a consolidation time near a particular price level, and it was people's memory of where they bought in at that created the importance of the horizontal price level.
Trading is evolution, and although horizontal price levels are still important, my observation shows they are not as important as they used to be.
That said, Twiggs did a great job on this stops table. Basically it shows that tight stops will loss you the most money. his studies are based on some kind of entry and exit system, so of course, depending on the system that enters the trade, that may actually big the main factor in picking your stop level, a very simply concept actually.....at what point will I know that my technical basis for entering the trade was wrong? And then you don't want to be just a scooby snack beyond that line, or HBB will drink your milkshake by running your stop. You want to give it some room.
Visit Twiggs here, and he has an email newsletter too, most of it all free.
http://www.incrediblecharts.com/sitemap.php?mgroup=162
Think if you were long silver futures and has no stop in place? You could have theoretically vaporized a $200k account in the Silver debacle.
However, stops are dangerous also. Esp. since your stop information is usually "sold" from broker to broker so those who run the stops know what their equity curve will look like. No, it is not fair, not proper, not really even morally close to correct, but it is the way it is. The levels of corruption on other matters of even higher magnitude and clarity mean that the issue of your stops being published and sold to the highest bidder will not be one that is addressed soon.
Twiggs does some good stuff, although he is stuck on horizontal resistance, when it is blatantly obvious that sloping channels get way more respect these days. In the old days, when people bought stocks for months or years at a time, a horizontal level was a "squeal point", as in ....if I get back to 35, I will be even money and I will sell. Or conversely, hey I am up 10 points from 50, but if it drops back to 50 I will sell to prevent a loss. Often times there was alot of money placed during a consolidation time near a particular price level, and it was people's memory of where they bought in at that created the importance of the horizontal price level.
Trading is evolution, and although horizontal price levels are still important, my observation shows they are not as important as they used to be.
That said, Twiggs did a great job on this stops table. Basically it shows that tight stops will loss you the most money. his studies are based on some kind of entry and exit system, so of course, depending on the system that enters the trade, that may actually big the main factor in picking your stop level, a very simply concept actually.....at what point will I know that my technical basis for entering the trade was wrong? And then you don't want to be just a scooby snack beyond that line, or HBB will drink your milkshake by running your stop. You want to give it some room.
Visit Twiggs here, and he has an email newsletter too, most of it all free.
http://www.incrediblecharts.com/sitemap.php?mgroup=162
Vix 15, Egg of Doom Revisited, Dog Parachute, BPT
The VIX 15 CL was popped, it was an "underthrow". The Hal 20000's are tricky, underthrows and overthrows have always been present in "the system", but with greater consolidation of information, esp. stop levels, the HAL20000's know how to bang the tape better to steal the most money. See Hawaii Trading new article on stops.
Friday, May 6, 2011
Epiphany of the week --Energy
The cost of energy is going to become quite dear.
The Gulf oil debacle is an indication of the more desperate attempts we have to take to get oil, poisoning our ecosystem in the process.
The Fukushima incident is not even understood yet by 98% of world denizens.
Those will cast an evil light on 2 main sources of power.
Even Nat Gas "Fracking" is coming into light. Injecting benzene (as one of 60 or so things they pump into the ground (think ground water) in order to increase production.
Solar ought to do quite well.
Friday Post
Went long futures when I got back from work yesterday. Based on secret stuff, the recent pounding on the Euro, ACT thin tail reversal on the 50% channel, and "moon drop" already pretty intense.
Dropped quantity on Great British Pound / USD short --this is call the "Cable" get the whole history/story here:
http://oahutrading.blogspot.com/2011/02/cable-and-fiber-taken-as-short.html
And right before the intraday drop that just happened, huge action on Russell puts, for May no less.
Dropped quantity on Great British Pound / USD short --this is call the "Cable" get the whole history/story here:
http://oahutrading.blogspot.com/2011/02/cable-and-fiber-taken-as-short.html
And right before the intraday drop that just happened, huge action on Russell puts, for May no less.
Thursday, May 5, 2011
Wednesday, May 4, 2011
Silver -- PRS say long coming up
PRS calls for a long soon, unless SLV blasts downward through this PRS 177.
Comments? PM
Cable "doing as it should", however I have caution since the USD still continue bouncing downward on the PRS. Cable and USD are pretty much opposite, as much as anything is opposite.
Comments? PM
Cable short would be derailed by a rate hike, crowd says no way no hike
Summary Outlook - Bank of England Rate Decision
On Thursday, May 5 at 0700EDT/1100GMT, the BOE is unanimously expected to hold rates steady at 0.5% and to make no change to the GBP 200 bio Asset Purchase Program, according to Bloomberg surveys of market economists. Given weakness in recent UK data, we also expect the BOE to stay on hold. Traditionally, when there is no change to Bank policy, the BOE does not issue a statement, so we do not expect any significant news to flow from the event.
On Thursday, May 5 at 0700EDT/1100GMT, the BOE is unanimously expected to hold rates steady at 0.5% and to make no change to the GBP 200 bio Asset Purchase Program, according to Bloomberg surveys of market economists. Given weakness in recent UK data, we also expect the BOE to stay on hold. Traditionally, when there is no change to Bank policy, the BOE does not issue a statement, so we do not expect any significant news to flow from the event.
S&P 500 Trading System Alert (pysche)
I did sign up for the Breakpoint Trades SPY trading system. Today it almost issued an alert based on closing price. Long or Short? I can't say and won't say. I do bring some ideas and charts from BPT here on occasion, and they are fine with that, but I won't be releasing these swing trade signals as it is against the agreement, and they are too valuable. I also contribute at BPT, and they have a great live blog.
For now, I have decided to play these signals using futures. 2 reasons, I have money tied up in other stuff, and want the liquidity, AND Tax Advantage.
Futures or options on index funds get special tax advantage, you pay 15% rate instead of what most people are probably at 28% and higher. That is huge, because it is all about what you can keep. The long term capital gains rate applies to 60% of the profits, 40% are still taxed at short term rates.
True that futures are hunted at night, but /ES is as liquid as it gets....definitely ES still gets hunted, but it really won't matter since this is a buy/sell on open or close MECHANICAL SYSTEM and so overnight shenanigans won't even come into play. A veritable Rube Goldberg mechanical system, but mechanical system nevertheless.
CONSULT YOUR TRUSTED TAX ADVISOR. And if you haven't traded futures, you better be ready for the emotional duress when you see a trade move with you, or against you, and your account changes so quickly your emotion may get the better of you. Which is exactly the reason for using a mechanical system, to eliminate the emotion and discretionary trading.
Here is some info I pulled together that will help you start your research:
Sign up here for basic membership (required for access to SPY trade signup):
http://breakpointtrades.com/memberships/go.php?i=l0&r=2712
Info on the SPY trade system here: Memberships are limited, don't kick yourself in the butt because you wanted to check it out, but were "too busy", decide now, and then choose to act or choose not to act. Don't miss out because of apathy.
http://breakpointtrades.com/systems/SPY/
For now, I have decided to play these signals using futures. 2 reasons, I have money tied up in other stuff, and want the liquidity, AND Tax Advantage.
Futures or options on index funds get special tax advantage, you pay 15% rate instead of what most people are probably at 28% and higher. That is huge, because it is all about what you can keep. The long term capital gains rate applies to 60% of the profits, 40% are still taxed at short term rates.
True that futures are hunted at night, but /ES is as liquid as it gets....definitely ES still gets hunted, but it really won't matter since this is a buy/sell on open or close MECHANICAL SYSTEM and so overnight shenanigans won't even come into play. A veritable Rube Goldberg mechanical system, but mechanical system nevertheless.
CONSULT YOUR TRUSTED TAX ADVISOR. And if you haven't traded futures, you better be ready for the emotional duress when you see a trade move with you, or against you, and your account changes so quickly your emotion may get the better of you. Which is exactly the reason for using a mechanical system, to eliminate the emotion and discretionary trading.
Here is some info I pulled together that will help you start your research:
What is a Section 1256 Contract?
According to IRS publication 550 page 39:
A Section 1256 contract is any:
1. Regulated futures contract
2. Foreign currency contract
3. Non-equity option
And on page 40 under the Non-equity option heading:
Non-equity options include debt options, commodity futures options, currency options, and broad-based stock index options. A broad-based stock index is based upon the value of a group of diversified stocks or securities (such as the Standard and Poor's 500 index).
Good aspects of Section 1256 contracts is
- 60% of the capital gain or loss from Section 1256 Contracts is deemed to be long-term capital gain or loss and 40% is deemed to be short-term capital gain or loss. What this means is a more favorable tax treatment of 60% of your gains.
- If you have a loss, you can do a "carry backwards" which might be really good for you, it all depends, this is advanced.
- All assets in the 1256 are marked to market at end of year. This could simplify record keeping, sometime digging back years to determine a basis (and the IRS is going to get very serious about basis in near term years, they have been pretty easy going on this in the past)
Sign up here for basic membership (required for access to SPY trade signup):
http://breakpointtrades.com/memberships/go.php?i=l0&r=2712
Info on the SPY trade system here: Memberships are limited, don't kick yourself in the butt because you wanted to check it out, but were "too busy", decide now, and then choose to act or choose not to act. Don't miss out because of apathy.
http://breakpointtrades.com/systems/SPY/
Tuesday, May 3, 2011
Monday, May 2, 2011
Poor rationial argumentative process in support of radiation, hell, it's good for you
http://ansnuclearcafe.org/2011/05/03/don-luckey-versus-helen-caldicott-low-dose-health-effects/
Please read the above if you wish to remove your nuclear tin foil hat. In fact, you will find that small amount of radiation "increase growth rates". I see, like maybe cancer perhaps, or general "growth" or mutations. Nice.
Where are the longest lived animals, say turtles--- in the ocean. Protected from a vast amount of background radiation and radiation from outer space.
Are mutations and Elliot Wave type "going off's" good for general evolution, sure? Do you want your kids mutating to take that 1 in 100,000 chance that the mutation will be better than the original product? Indeed, if you understand basic chemistry, basic cellular structure, and if you haven't been conditioned by a life time of subservience to the nuclear industry or products of war (depleted uranium as weapons, for instance), then it should be something beyond doubt that in the 100 year outlook, adding bunches of radiation to our environment is bad, very bad. Especially those that bio-accumulate, and those bone seekers like Strontium. And those that last a long time. And those that have much higher damages caused than just the occasional Alpha, Beta or Gamma particle release as they degrade into a lower level radioactive element, like uranium and plutonium which have drastic human effects beyond just the "iononizing" radiation
Please read the above if you wish to remove your nuclear tin foil hat. In fact, you will find that small amount of radiation "increase growth rates". I see, like maybe cancer perhaps, or general "growth" or mutations. Nice.
Where are the longest lived animals, say turtles--- in the ocean. Protected from a vast amount of background radiation and radiation from outer space.
Are mutations and Elliot Wave type "going off's" good for general evolution, sure? Do you want your kids mutating to take that 1 in 100,000 chance that the mutation will be better than the original product? Indeed, if you understand basic chemistry, basic cellular structure, and if you haven't been conditioned by a life time of subservience to the nuclear industry or products of war (depleted uranium as weapons, for instance), then it should be something beyond doubt that in the 100 year outlook, adding bunches of radiation to our environment is bad, very bad. Especially those that bio-accumulate, and those bone seekers like Strontium. And those that last a long time. And those that have much higher damages caused than just the occasional Alpha, Beta or Gamma particle release as they degrade into a lower level radioactive element, like uranium and plutonium which have drastic human effects beyond just the "iononizing" radiation
Tornadoes (or is it like potatos)
I
Twin Tornadoes over Honolulu Airport. Never seen anything but a minor dust devil in Hawaii. Waterspouts do happen, but never seen one. These two together, towering over the HNL control tower with Honolulu barely viewable in the left. OK, cats, and dogs, and tornadoes, Oh My!
Brand Name Ratios, VOS, FF, ACT all pointing bear, Cable too, Copper too
Come to think of it, when everything says bear, better watch for the opposite. Unless somehow I have gathered a magical group of ratios ;-)
These are all 100% genuine Hawaii Trading
These are all 100% genuine Hawaii Trading
Stolen Charts
Got your attention, sign up as follower, only 5 new people in like 5 weeks? Appreciate the feedback that at least someone appreciates the posts.
Asset Class Summary Predicted this Drop, and Gap Fill with no reversal
See last weeks post, not just the channel line nailed it--pointing out a near term top, but as Dnarby pointed out the timing between peaks was almost perfect 4 times in a row.
Well it offered up a shooting star so far today, we will see
And below, from BPT, just a heads up. Gap fill, but no apparent reversal, we will see.....
Well it offered up a shooting star so far today, we will see
And below, from BPT, just a heads up. Gap fill, but no apparent reversal, we will see.....
SPY Trade System
This is Sunday Night. We just recently published information regarding a long awaited swing trade system for the S&P using SPY ETF.
91% winning trades. Read the full info at BPT site including disclaimers, the legal, all that.
BUT if you have interest, you must first sign up as a member, please use the link on the left, as I get "credit" extension to my own membership. I did sign up for the SPY today, I will put $100,000 into the system.
IF YOU HAVE INTEREST--DO THIS MONDAY AM, First Thing! Almost all the memberships are filled, 500 max.
I want to warn you...this is "not cheap", it cost's more than EWI (which I gave up on), but even with a 10,000 account the average profit per year was around $3250 using the SPY system.
You need the basic membership, $40 per month, and then you "rent" the SPY trade system for $60 per month. Seriously though, BPT often has 5 to 15 untriggered individual stock trade idea, and you hit on a few of those, and all the fees are paid for.
The SPY system is nice because you don't have to be tethered to your computer to take advantage of it. They have 2 systems....all in, all in. Or "nibble in nibble out" by percentages.
The all in system averages just 17 trades a year to average 30+% return. I have seen similar returns on same day trade systems that you have to be sitting in front of your computer and always ready or you miss much of the returns. Just not realistic, not for me anyway.
From BPT FAQ
Q: Is the system always in the market, always in a trade?
A: No, the system is not always in a trade, in fact it's only in the market about 48% of the time! Most of the time when the system exits a trade, it will go 'Flat' for a while until it sees another entry. This is actually a good thing because it frees up your money to do other trades! In addition, successful traders know that Cash is a position! Risk management is the primary objective here. The system is only in the market when it sees a statistical reason to be, it does not force trades.
Q: How many trades does the system typically do in a year?
A: On average the system does about 17 trades a year - see the Statistics tabs for the Single Entry and Multi Entry systems.
Q: What are the statistics of the system? Profit Factor, % winning trades, etc?
A: Please see the 'System Statistics tabs for the Single Entry and Multi Entry systems for more detail; however the system has been about 91% profitable with a profit factor greater then 27, which is insane. The Multi Entry system has even better statistics with a profit factor of 37 and 96% winning trades.
Q: It's been just over a month since the system closed out its last trade, is this normal? Why hasn't there been a new trade?A: Yes this is perfectly normal; please review the system statistics in detail as well as the example charts. While this is generally rare, there have been a few instances where the system was out or out of the market for 1 - 2 months at a time.
http://breakpointtrades.com/systems/SPY/
First, sign up for membership using the link on my blog on upper right. Indeed they do credit me subscription time, and I guarantee there is no extra cost to you, and sometime BPT offers a coupon for Hawaii Trading people only, so no extra cost, possible extra benefit, and it helps me stay motivated to keep producing good charts and ideas.
91% winning trades. Read the full info at BPT site including disclaimers, the legal, all that.
BUT if you have interest, you must first sign up as a member, please use the link on the left, as I get "credit" extension to my own membership. I did sign up for the SPY today, I will put $100,000 into the system.
IF YOU HAVE INTEREST--DO THIS MONDAY AM, First Thing! Almost all the memberships are filled, 500 max.
I want to warn you...this is "not cheap", it cost's more than EWI (which I gave up on), but even with a 10,000 account the average profit per year was around $3250 using the SPY system.
You need the basic membership, $40 per month, and then you "rent" the SPY trade system for $60 per month. Seriously though, BPT often has 5 to 15 untriggered individual stock trade idea, and you hit on a few of those, and all the fees are paid for.
The SPY system is nice because you don't have to be tethered to your computer to take advantage of it. They have 2 systems....all in, all in. Or "nibble in nibble out" by percentages.
The all in system averages just 17 trades a year to average 30+% return. I have seen similar returns on same day trade systems that you have to be sitting in front of your computer and always ready or you miss much of the returns. Just not realistic, not for me anyway.
From BPT FAQ
Q: Is the system always in the market, always in a trade?
A: No, the system is not always in a trade, in fact it's only in the market about 48% of the time! Most of the time when the system exits a trade, it will go 'Flat' for a while until it sees another entry. This is actually a good thing because it frees up your money to do other trades! In addition, successful traders know that Cash is a position! Risk management is the primary objective here. The system is only in the market when it sees a statistical reason to be, it does not force trades.
Q: How many trades does the system typically do in a year?
A: On average the system does about 17 trades a year - see the Statistics tabs for the Single Entry and Multi Entry systems.
Q: What are the statistics of the system? Profit Factor, % winning trades, etc?
A: Please see the 'System Statistics tabs for the Single Entry and Multi Entry systems for more detail; however the system has been about 91% profitable with a profit factor greater then 27, which is insane. The Multi Entry system has even better statistics with a profit factor of 37 and 96% winning trades.
Q: It's been just over a month since the system closed out its last trade, is this normal? Why hasn't there been a new trade?A: Yes this is perfectly normal; please review the system statistics in detail as well as the example charts. While this is generally rare, there have been a few instances where the system was out or out of the market for 1 - 2 months at a time.
http://breakpointtrades.com/systems/SPY/
First, sign up for membership using the link on my blog on upper right. Indeed they do credit me subscription time, and I guarantee there is no extra cost to you, and sometime BPT offers a coupon for Hawaii Trading people only, so no extra cost, possible extra benefit, and it helps me stay motivated to keep producing good charts and ideas.
Earthquakes, New Moon
I have this earthquake gadget on my browser, kind of neat. After the big Indonesian earthquake, the number of 4.0 or bigger settled into a range of 60 to 80. Big earthquake is big release of pent up energy, so you expect a drop.
However, using USGS data, the average number of 4.0 earthquakes since 1980 is 240 per week. Very odd, we are now at around 120 to 140 per week. No time to research this further, the concern is that after a massive release of energy, and even many of the aftershocks were 6.0 to 7.0 in Japan, there are still alot of earthquakes, maybe a major plate shift is underway, and will continue, perhaps yet another "big one". The cost of preparation is acceptable. The costs of being unprepared could be enormous.
However, using USGS data, the average number of 4.0 earthquakes since 1980 is 240 per week. Very odd, we are now at around 120 to 140 per week. No time to research this further, the concern is that after a massive release of energy, and even many of the aftershocks were 6.0 to 7.0 in Japan, there are still alot of earthquakes, maybe a major plate shift is underway, and will continue, perhaps yet another "big one". The cost of preparation is acceptable. The costs of being unprepared could be enormous.
Sunday, May 1, 2011
Custom Asset Class total
Custom Hawaii Trading Chart that sums up assets classes, The s&P500, Bonds, Gold, and Housing (using Homebuilders)
SPY came into existence in 2000
TLT in 2001
GLD in 2004
XHB in 2005
And although I don't use SLV in my construct, it was conjured up in 2006
In case you were living under a rock, or out enjoying you life, Silver crashed over 10% on Sunday afternoon, many hours before announcement of a presidential announcement (Bin Laden assassinated in Pakistan by US forces)
So this construct (aka ratio chart) only makes sense after 2005, so very long term trends cannot be analyzed.
The multi-year trends show a very interesting time and channel pattern, which basically last week called a medium term top.
See here
And here is the chart from last week
Here is a longer term chart
Maybe SPY will reach for 78 Fibo. Seems like no 78 goes untouched these days.
And this Japanese top official resigned last week, in tears, because the Gov was breaking too many rules about radiation safety, and he was their expert on radiation safety. Having a job in Japan is equivalent to "being set for life" but having a top Gov job in Japan is totally being set. What madness would cause a high level resignation? You fill in the blanks.
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