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[random] 02/10/2002 22:39

critical moment.

the rally seems to have failed. Ftse has hit short term downtrend line, just as the us tanks.

bound to be a day of markdowns on lse, any shorts are bound to do well if held overnight.

surely the spx must breach 700 soon?

[bonsai] 02/10/2002 15:23

not sure how we will get there but I am expecting us to reach the downtrend line from May.(at least) although anymore is probably asking too much.

[random] 01/10/2002 23:16

tbond gapped down 100 basis points. Delayed reaction rally in equities.
could be a good time to cover->long .... what do others think?
quite glad I bought a small long today (up 2% by market close), and have only limited short exposure.
even this small short could be hairy tommorow.

dow bounce to 8250->8500

ftse 4150?

seems plausible, before the next downleg.

this market is so volatile.

[bonsai] 01/10/2002 21:51

looks like B wave is now over and we have started C wave.

anybody for 4200 calls for Jan ?

[energyi] 01/10/2002 21:22

Random,
DOUBLE BOTTOM WITH ASIAN CRISIS???



MIGHT BE TIME to buy T-Bond puts in case it is.

[random] 29/9/2002 23:46

ftse near to upper trend line.

[bonsai] 26/9/2002 09:40

now we are shaping up

[bonsai] 26/9/2002 08:36

given the recent fall which may have been a B wave, would look for a sizeable rally.target 4400+

but not starting out very well so far.

[energyi] 26/9/2002 07:37

Surprised to see Bonds hold up so well

[random] 25/9/2002 23:07

Could this be the next bear rally?

At bottom of trend line, so could be a start of a rally, or another crash if the rally fades quickly.

[bonsai] 24/9/2002 14:36

forwood

we all know there is no silver bullet.
no system will be successful more than 50% of the time (if you are that lucky).

by the time you have done all the research and analysis the market will have changed and moved on.

its all about probabilities.(probably quantum effects).
You know what I mean. Now you see it, now you dont.

still, best of luck.

[energyi] 24/9/2002 13:37

BONDS driven by Fannie Mae:
The upward action in T-Bonds in recent days may have been driven, to
some degree, by hedging actions taken by FNM. They have a "duration gap",
which means that their portfolio of mortgages now has a shorter duration
(something like average maturity) than their liabilities. To redress
this imbalance, they need to buy assets of a longer maturity.

It seems that this need has made them an "800 pound Gorilla" in the
Bond pit. Remember, FNM has over $700 Billion in debt. And so adding
5% TBonds would mean buying a huge $35 Billion of TBond futures, and/or
actual physical bonds- A huge requirement!

When they are done, or mortgage refinancings slow, they may start to
dump these positions. Thus, FNM's activities have the impact of reinforcing
whatever trend is in place in the Bond market

[forwood] 24/9/2002 03:44

Pardon Random for going bit off topic here but need to respond to Energyi

Collecting data and doing a statistical analysis are not the same thing. Am being pedantic about this, and if you've seen posts on other threads, am looking for a research design which clearly demonstrates the impact of the independent variable (full moon) on the indices.

The starting point in science is that there is no impact. Even if you can demonstrate an effect more than chance, you have to consider there may be other causes, as correlation does not necessarily = causation. I have suggested that you may have picked up trends.

3 things would strengthen the case. 1. Pick another historical period and see whether you get the same effect. 2. Choose another 'day' - say the 1st trading day after the 15th of the month - and see what results you get from that. 3 Subject these to statistical analysis.

I have been trying to think of a suitable design and statistical test to apply to results. Correlation is an appropriate starting point and can be done in Excel. To simplify the data, you could look at the difference in movement of the index say 1 week after the chosen trigger day. eg:

.........Moon day.........Difference from end day 1 - day 7
mth 1......... -36 ......... -160
mth 2......... 40 ......... 30
mth 3......... -15 ......... 50
mth 4......... -49 ......... -200
mth 5......... 57 ......... 180
mth 6......... 26 ......... 30
mth 7......... -28 ......... 20
mth 8.......... 40 ......... 80
mth 9.......... 28 ......... 50
mth 10........ -38 ......... -45


Please believe that I am not dismissing the claims. As a research psychologist with a long term interest in astrology (now somewhat sceptical), I would be delighted to see you succeed. But if there is something in this, then it must be subjected to a bit more rigour. If you need help with the analysis, feel free to email me on [e-mail]

[random] 24/9/2002 01:07

FTSE commentary: Investtech

Negative candidate (23 Sep 2002) [Auto] Help
Shows a weak development within a falling trend channel. A further negative development is indicated, and there is resistance against the ceiling of the trend channel. RSI is, however, oversold. The stock can still fall further, and we should see an increasing RSI before this is used as a positive signal.
Support and resistance: The index has broken down through the support at 3800 points. This predicts a further decline.

[energyi] 24/9/2002 00:58

MORE EVIDENCE of a coming downturn in bonds?:


The Future Inflation Gauge (FIG), which should actually be called the Future CPI Gauge since it is designed to predict changes in the CPI not changes in the inflation rate, has been an exceptionally good leading indicator of the Fed Funds Rate since 1987 (the year that Greenspan became Fed chairman). There has been a very sharp upturn in the FIG since early this year. In fact, the FIG is now quite close to the levels reached just prior to the start of the Fed's rate-hiking programs in 1994 and 1999.
:MORE:


- - -
Random,
What TBond furures or Puts are you focussing on please?

[energyi] 23/9/2002 13:01

forwood, you say:
"I think Energyi's moon 'research' is misinterpreted....the short term trend succeeds over the next 4 week period 75% of the time (over the period he looked at it). ... There is no statistical basis (yet) to this moon observation, though I would be delighted to see him produce one."

I have done statistical work on about 20 moon cycles.
Have you not seen the charts in the Header of the MOON thread?
They summarise the work

[random] 23/9/2002 00:56

INVESTECH green pivot on ftse rsi .... magnifies short term neutral/buy on ftse.

3900->4000 seems key to the action on monday.

for monday futures I suspect a gap up to 3900, and quick run to 4000+, and a pullback of 38% of gap + run. (~3950), followed by more buying up to 4000, and another pullback of ? this would be a +ve condition for shorting. The short term trend channel is unlikely to be tested at close for four days, so 3 days of closing below 4000 are likely, or alternately a rapid break above 4000K, breaking the short term downtrend. Tight stops seem a prerequisite of trading a market so volatile.

also possible is a gap down on open, with a quick filling time ..... time to get long, but watch 4000 like a hawk.

other possibilites seem more bearish in the short term, with 3900 offering resistance.

Energyi's moon statistics point to the day after a full moon as a good day to short, with wednesday the best. This would likely see the ftse topped at 4000, a more comfortable place to sell.

Once again, moon signals and chart signals have coincided.

[random] 22/9/2002 18:16

4200 is the next crucial resistance level after 4000. I am trying to be objective about this, and using the figures generated by investtech, rather than my own preconceptions. I need to consider both short and long, and try to be on the right side of the trend, even if only trading short. This means trying to be neutral when evaluating a position. I have noticed that when I am bullish, I see a fall and think "bounce", and when I am bearish, that I see a rise, and think "this must fall". This is what seems to have prevented me from trading the trend in the past, the residual sentiment after a trend change. The best traders seem to intuitively switch from bullish to bearish at the best moment, and carry out that gut instinct with appropriate trades.

regarding self fulfilling prophecies: surely prophecies are like calls, correct or wrong. Since none of us alone is the market as a whole, we all have limited influence. Everyone on advfn could be convinced the market will fall on one day, but it rises. Is that a self unfulfilling prophecy? Sometimes some traders seem spot on. They spot a dog with fleas, and tell everyone. They did not turn a horse into a dog, or give it fleas, yet their call becomes self fulfilling?
The bulls look at the mangy dog, and see a potential race horse. Thus it offends them to hear it described as a dog. Maybe small caps can be moved by ramping/deramping self fulfilling prophecies, but the whole market?

I am inclined to think there is some link between mooncycles and market cycles. Markets are controlled by emotions, and the moon effects emotions. It's when moon cycles and chart cycles coincide that the fireworks seem to happen, like last friday.

[mitchy] 22/9/2002 15:26

News from Japan of trillions debt to be wiped must give further support to a rise on Monday and may well move that upper limit of 4000 higher which I would agree is THE marker...but as has been said the key phrase from forwood is "TRADE WHAT YOU SEE"...it should be very easy to see the trend,short term(VERY short term).Would however disagree with a "minute by minute" monitoring...more a "second by second" monitoring.


...and don't forget....have FUN!

[random] 21/9/2002 10:15

Short term
BULLISH SIGNALS

Equity bouncing off the bottom of the trend channel so:

equity: principal trend down
current short term trend up

somehow managed to contain losses shorting the ftse on friday. closed one short as the spike started (for a profit!). shorting the resulting spike too early put pay to any chance of a plus day for me, but luckily cmc only spiked to 3915 or so.
Yesterdays losses for me where all stops getting whipsawed. A stupid day to trade, but I had a reason (risk management .... if it did not rise a massive tank was expected ... bottom of trend channel). Sometimes even a risk manager must give it a rest. In fact, for a seasoned scalper there where excellent short possibilities, but after 10:30. yesterday was a perfect example of max pain in action. The market did not necessarily expire on max pain, but it sure headed that way. delta hedging magnified all the movements dramatically. I almost went long on open yesterday, but stopped since it increased my risk exposure. Eventually, I experimented with longing the dow :-o when signaled to cover a short. It worked, and was one of the few profitable trades I did yesterday. I felt nervous doing it though. I am trying to train myself to think of shorts as "insurance" and longs as "risk". Thus banging a short into the market is safe, and make me feel more secure. covering, even for profit, makes me feel exposed, and at risk. This is because I hold equity, and shorting up to the value of the equity is lowering risk. This is the opposite of how I used to trade, and loose.

Perhaps I can trade the best of both worlds by forcing a reverse out of an intraday long stop. This simulates an old fashioned short sell, where a bullish stock is borrowed, it rises, is sold, and picked up for less. The bear makes on the long as well. I tried this once before, and lost very badly. An immediate short was correct. The point was, there was no cover signal.

yummy looking double doji on tbond ......

bear rally in equities expected .....

ftse resistance 4000. Could see this on monday I think. Sometimes spikes can be a sign of what is to come. Next resitance is 4200. This would be harder to reach, but is feasible (with say dow 8500). Any trend reversal would the need to form a low around 4000. My intinct now is to long the ftse with a short reversal stop, and short tbonds again, with a neutral stop. I might practice this method of trading, but it is riskier than staying neutral during rallies and shorting
the top, and adding to the short when the fall is below all entry points, and sticking to pyramid trades from then on, staying short overnight till a bottom like yesterday is clear.

Perhaps the massive "buys" where massive "cover and long" reversals. Whatever, the result was a markup, which suggests less shorts in the market. If long postions have been taken, then a similarly massive volume can be expected near the top of the short term channel at 4000, as traders reverse to short again. This could produce a massive spike ...... down to a new low of 3600 or below.

[random] 13/9/2002 12:55

the ftse has pulled back into it's bearish channel.

short term trend and long term equity trend now agree, down. could be a short term reaction up before the next downleg though.

high on tbond might limit short term equity downside. It will be amazing if tbond makes new high. It seems to be getting used to trading above 112.00, or is this just bond market complacency?

I would not be surprised to see gold trading above $330.00 very soon given the falling equity market, and poorly yielding notes. this seems to be the only way to let steam off both the equity market and bonds. after the recent good run, gold could have been picked up at 315.


so:
current trends

equity: down possible short term reaction up, or another crash.
tbond: up possible top.
gold: up, possible spike higher? 300->310 seems very unlikely in short term. seems to be a lot of upside.

[forwood] 13/9/2002 07:18

Interesting thread Random.

[random] 11/9/2002 01:13

BEARISH SIGNAL ftse

investtech has short term descending trendlines for ftse.

this can be a sign of a slide very soon.

4246 needs to become broken upwards to negate this signal.


the range between 4300 and 4350 is within the descending long term trend line.
this would need to be surpassed to attempt a sustained breakout to the upside.

[random] 09/9/2002 00:04

energyi, I had read the previous articles, but not the current one. excellent article, and makes me more confident to sell bonds.

if the inflationary effects kick in, as is expected, the current bond price will look like a bubble.

this all links back to the original hypothesis, that gold will rise as a result of falling equity and bond prices. The "link at the hip" between bond yields and equities need not last forever. It is possible for equities to fall, and bond yields rise. All this means is money heading to cash or other instruments.

I feel nervous about buying gold, given it has risen so much recently, but if we have another 10 years of the bear, the price of gold could rocket. Also, now the treasuries have sold their gold, it is time for a rise.

Is there any new information about the proposed reverse delta hedging with gold? Perhaps this is part of the cause of the strong correlation between bonds/equity, since the gold price is possibly forced low by massive reverse hedging. Indeed, a massive gold spike upwards would destroy the reverse hedgers, crashing both the bond market and equity market at the same time, as investors flock to gold. Such an event is not impossible.

The UK treasury has lost bucket loads selling gold around $280. What where they thinking of? If anyone in the bank of england would like to explain
1. Why they sold at discount prices, driving down the price of gold?
2. Why they sold at all?

I am sure there are plenty of readers interested ....

Surely, It was not the banks to sell. Since it corresponded to notes in circulation, it belonged to the owners of the notes. Essentially, the treasury has shorted the gold we leant them. Shorting gilts seems the only way to rebalance this inequality ;)