03/02/2013 Weekend Update

[Harapa]

SKEW update
SKEW correction warning remains in effect. Two weeks remaining on latest signal, but it may be a dud.
Looks like we got a false start on a correction last week.
Interestingly, SKEW rebounded from the dip early in the week suggesting that the option market bears did not run to their caves but reloaded.
SKEW is now back above the moving average and there is a clear rising bottoms trend (though no new high weekly close).
So, this suggests that the table is still being set for a down move to come.

Most failed SKEW signals (from your setup) seems to fall in areas where my transformation of SKEW (bottom panel on this chart ) displays a positive histo. Currently it is positive.

[BullBear52x]

Price pays baby!

[BullBear52x]

From it is what it is department

[BullBear52x]

SPX is almost at new all time highs. last time it almost made it too. so, the energy that carried us this far will even need to do more to carry us moving forward. tops and bottom usually happened at the least expected moment. GL

[Mr. BachNut]

SKEW update
SKEW correction warning remains in effect. Two weeks remaining on latest signal, but it may be a dud.
Looks like we got a false start on a correction last week.
Interestingly, SKEW rebounded from the dip early in the week suggesting that the option market bears did not run to their caves but reloaded.
SKEW is now back above the moving average and there is a clear rising bottoms trend (though no new high weekly close).
So, this suggests that the table is still being set for a down move to come.

Most failed SKEW signals (from your setup) seems to fall in areas where my transformation of SKEW (bottom panel on this chart ) displays a positive histo. Currently it is positive.

Could be. What is that measuring Harapa?

[Royal Flush]

We should took a closer look at $CPC also, right now we got $CPC > 1 and also above mid BB(21) this is bearish, $VIX is also above mid BB(21), these are bearish sign until $CPC is > 1.2 then I'll say enough is enough, I will buy that panic then.
This is a dailychart, to show buy and sell when all 3 conditions are met if using only $VIX and $CPC. since Stockcharts.com provide EOD only data for $CPC, so it's good out look for not so fast speed traders.
The 3 conditions for bullish out look are:
1. $CPC < 1
2. $CPC < mid BB(21)
3. $VIX < mid BB(21)
we got the opposite to the above for now, so I'll see it as bearish per put and call ratio. not saying that the option king are better than the bond king just some thing to look at. I use inverted ratio here for easiness to the eyes.

The attachment 2.JPG is no longer available

Here is from the bond king, they are buying TLT now.

The attachment 1.JPG is no longer available

Hi BB52, for some strange reason my inverted $CPC & $VIX ratios are not the same as yours

[joegamma]

We should took a closer look at $CPC also, right now we got $CPC > 1 and also above mid BB(21) this is bearish, $VIX is also above mid BB(21), these are bearish sign until $CPC is > 1.2 then I'll say enough is enough, I will buy that panic then.
This is a dailychart, to show buy and sell when all 3 conditions are met if using only $VIX and $CPC. since Stockcharts.com provide EOD only data for $CPC, so it's good out look for not so fast speed traders.
The 3 conditions for bullish out look are:
1. $CPC < 1
2. $CPC < mid BB(21)
3. $VIX < mid BB(21)
we got the opposite to the above for now, so I'll see it as bearish per put and call ratio. not saying that the option king are better than the bond king just some thing to look at. I use inverted ratio here for easiness to the eyes.

2.JPG

Here is from the bond king, they are buying TLT now.

1.JPG

please note: in stockcharts, "ONE" is a security, "$ONE" give inversions ie 1 divided by x,
don't ever forget the $ sign when trading (I have done that a few times and scratched my head too)
GL and thanks for all the valuable input this weekend.



Hi BB52, for some strange reason my inverted $CPC & $VIX ratios are not the same as yours

sc.png

[joegamma]

SKEW update
SKEW correction warning remains in effect. Two weeks remaining on latest signal, but it may be a dud.
Looks like we got a false start on a correction last week.
Interestingly, SKEW rebounded from the dip early in the week suggesting that the option market bears did not run to their caves but reloaded.
SKEW is now back above the moving average and there is a clear rising bottoms trend (though no new high weekly close).
So, this suggests that the table is still being set for a down move to come.

Most failed SKEW signals (from your setup) seems to fall in areas where my transformation of SKEW (bottom panel on this chart ) displays a positive histo. Currently it is positive.

Bachnut and Harapa: thanks for the charts and updates....for Harapa: is this the only recent instance where all prices went negative, including vxx, but skew failed to dip below zero Or near market price highs? any past historical action in backtesting or is the history too short for skew?
TIA

[BullBear52x]

.

1.JPG

please note: in stockcharts, "ONE" is a security, "$ONE" give inversions ie 1 divided by x,
don't ever forget the $ sign when trading (I have done that a few times and scratched my head too)
GL and thanks for all the valuable input this weekend.



Hi BB52, for some strange reason my inverted $CPC & $VIX ratios are not the same as yours

sc.png

[/quote][/quote]
Thanks Joegamam,
$one:xxxx for inversions

[Royal Flush]

.

1.JPG

please note: in stockcharts, "ONE" is a security, "$ONE" give inversions ie 1 divided by x,
don't ever forget the $ sign when trading (I have done that a few times and scratched my head too)
GL and thanks for all the valuable input this weekend.



Hi BB52, for some strange reason my inverted $CPC & $VIX ratios are not the same as yours

sc.png

[/quote]
Thanks Joegamam,
$one:xxxx for inversions[/quote]

Thanks BB52

[StudentBill]

Thanks. I think you are correct that you should always be totally aware and in that ready to act state, that is ideal. But for someone who might not be really day trading or have access to charts or accounts all day long being aware of possible time based catalysts for market action and creating a plan,for either bull or bear outcome, might be a good strategy.

As always what works for you is what's best. but long or short term--it's fractal. when i started back in the 90s i was never in front of a screen and traded options blindly over days to months (all in semis esp amat) using a cell phone (with bad reception) and memorizing one chart at the start of the day. i used a live broker--really nice people did great work. the whole thing was hysterical as semis were up and down in cycles during the 90s and i was leveraged to death--with no technical understanding of charts or of options. important to note the cycle nature since many could think a bull makes for easy trading. so here i am out out in the woods or at the beach trying to deal with this lady in sf who is linked to new york to trade san jose stocks-gotta love it.

and i actually % made more money faster doing this for the most part sitting in front of screens. i also lost more money doing this but net net was miles ahead. Second the issue continues to be where do you draw the line--i think sure fed releases would fit your standard. would options ex fit them? or do we use time of day time of week time of month time of season or time of year. i am totally not trying to be a jerk here--i am seriously asking these questions in an attempt to address the core issues. well worth some time to most traders. there is no question that stuff (news etc) impacts price--it just harder than it looks to figure out how to use it (only as always in my opinion).

thank you good luck with your trades

I know you're not being a jerk. I picked my screen name not because I am an actual student at a University but to try and convey that I am very much learning here from the much more experienced traders. I think your point was made clear by saying "where do you draw the line". The choice of granularity of events could drive one crazy and even when one is trying to be unbiased could force one into a bias of sorts. I am going to think about that. Thanks for the good discussion.

[StudentBill]

Harapa,
Thanks for the charts. they look good but I still dont know what you mean without
1. what the axis are plotting ....... and/or
2. a few words to explain whether I should buy hold or sell according to whether I see green red or crossover.

This comment applies to the most of the charts posted here unfortunately.. and even if you post it once that doesnt mean we all know what it means going forward..

harapa I reread your post about how VIX determines direction .. Friday VXX was green yet the markets up!

Excellent comments
Totally agree with you that there are so many chart gurus on this board, or at least that what they think they are after posting some charts.
My words of advice for you, please don't waste your time trying to read their charts, most of them are garbage. If their charts are any good they wouldn't be here posting them for free
Like you I like TAs and charting very much, and I have spent enough time here to learn that there are only a handful of folks here really know charts and know the responsibility of posting meaningful charts. Usually they are the ones with simple charts and with enough texts to tell us what their charts want to tell us.
Most of descend or creditable chartists are listed in public stockcharts. I hope my post save you sometime in the future and use that time do your own charts. With enough time and dedication, I am sure your charts will serve you better and very likely will have more meaning than most here.
Good luck and enjoy charting

I have to respectfully disagree with a lot of what you are saying. Not that everyone who posts a chart here is posting a great chart that should be used to make a trading decision (especially anything I ever post) but there are a bunch of people that do post for free here that I think have great charts Harapa being one of those people. Heck, Cobra posts a lot of stuff for free and his stuff is why we are presumably all here for the most part. As with anything that is free you have to take the good with the bad and sometimes do a little more work. His chart in question shows the "vixies" going green prior to various market news events that sent the markets higher. I'm not trying to be a nudge but I think the responsibility is on the person in taking the information to sort through it themselves if they wish to learn.

[taggard]

even when one is trying to be unbiased could force one into a bias of sorts

nice. pretty much everything i am thinking about boils down to the balance between focused attention awareness and intent--vs data. the more i do or pay attention to--by definition the less attention i pay to any one issue. when starting trading i pretty much ignored the whole problem and just jumped on--then after 8 years or so i started being bothered by the flaws of this approach--promptly overbalanced into useing and testing tons of ideas like maybe 300. one idea i finally hung onto was the 10 and 30 day moving averages of the nyse advancers and decliners--i spent pretty close to 1000 hours on this over 12 years (most of it in about 2 months) which goes to show how nuts i went testing and tweaking.

after all this i came to the conclusion that there are a ton of ideas which if use exactly right--worked maybe 75-80% of the time. sadly given my obsessive compulsive frenzy over the years i found playing very simple price action did about the same and actually one cold exceed this. at the very least it implies that it's not the approach it's the dude using it.

that boiled down to the quality of attention devoted vs what it was devoted too. from there the problem seems to be trade size. the key is to just go bats==it at key points which are rare--when risk reward is skewed hugely in your favor--and the rest of the time play it tight. and the psych elements of all this stuff. i would love to see more discussion from others on some of these points. this is the area i am trying to learn now--and it is very rarely discussed. i consider this part of TA since i see TA as a way to trade and not an end in itself. Charts and trading are related but very separate at the same time. it's like listening to 5 guys nit a note on a guitar--it's the same note--but it sounds different due to the exact figuring and intent of the individual players. it's fairly easy to discuss the notes--and harder to consider the different intents creating them. but the value is in the differences not the notes--paco de lucia or segovia are different than the kid next door even if playing the same thing.

[StudentBill]

even when one is trying to be unbiased could force one into a bias of sorts

nice. pretty much everything i am thinking about boils down to the balance between focused attention awareness and intent--vs data. the more i do or pay attention to--by definition the less attention i pay to any one issue. when starting trading i pretty much ignored the whole problem and just jumped on--then after 8 years or so i started being bothered by the flaws of this approach--promptly overbalanced into useing and testing tons of ideas like maybe 300. one idea i finally hung onto was the 10 and 30 day moving averages of the nyse advancers and decliners--i spent pretty close to 1000 hours on this over 12 years (most of it in about 2 months) which goes to show how nuts i went testing and tweaking.

after all this i came to the conclusion that there are a ton of ideas which if use exactly right--worked maybe 75-80% of the time. sadly given my obsessive compulsive frenzy over the years i found playing very simple price action did about the same and actually one cold exceed this. at the very least it implies that it's not the approach it's the dude using it.

that boiled down to the quality of attention devoted vs what it was devoted too. from there the problem seems to be trade size. the key is to just go bats==it at key points which are rare--when risk reward is skewed hugely in your favor--and the rest of the time play it tight. and the psych elements of all this stuff. i would love to see more discussion from others on some of these points. this is the area i am trying to learn now--and it is very rarely discussed. i consider this part of TA since i see TA as a way to trade and not an end in itself. Charts and trading are related but very separate at the same time. it's like listening to 5 guys nit a note on a guitar--it's the same note--but it sounds different due to the exact figuring and intent of the individual players. it's fairly easy to discuss the notes--and harder to consider the different intents creating them. but the value is in the differences not the notes--paco de lucia or segovia are different than the kid next door even if playing the same thing.

Umpel, I think, made a comment this week something to the effect of "It's interesting to see several different approaches come to the same conclusion" when myself and two or three other people posted different charts coming to more or less the same conclusion on a high for VXX (or XIV can't remember) within a few minutes. I think you are hitting on an important point that chasing some perfect system can lead one into ruin because there is and will never be a perfect system. I am new to trading but I think one could compare a seasoned trader, even a very technical one using TA to an Jazz musician or pro poker player." Charts and trading are related but very separate at the same time." I think stock charts are more akin to a language created to describe the chaotic nature of trading than a mathematical chart even though they look similar and have many of the same features. "but the value is in the differences not the notes" I guess you are saying, for example, that five guys go long Apple at the same time and choose when to exit using the same charts but some will make money and some won't.

[Xian]

Hi folks, happy Sunday evening.

A post and a question— a semi-sarcasric newbie-type question.

AAPL could have an upside move this week— COULD.

Basing this on two things, the chart below and news (sorta).

First off, see below. New low, but no new low on the daily MACD. Is this what qualifies as a "bullish D" in this sad sad stock of late?

Also: Kass is accumulating again, Keith M is buying, and even Henry Blodget posted how cheap the stock is an "if" they increase dividend that AAPl wold be "irresistible". These are three of the slimiest guys in the universe— if there's a hell there is most certainly a special spot in it for these three. I almost mean that in a good way: they DO NOT lose no matter what (See: "gnome" split).

Not to mention Einhorn dropped his suit. As such look for the news stream on AAPL to suddenly become positive. Approx $450 ceiling if this thing takes off.

Thanks very much, and I'm serious: does that count as positive d?

Thanks again

(I have no position in the fruit)

[taggard]

Umpel, I think, made a comment this week something to the effect of "It's interesting to see several different approaches come to the same conclusion" when myself and two or three other people posted different charts coming to more or less the same conclusion on a high for VXX (or XIV can't remember) within a few minutes. I think you are hitting on an important point that chasing some perfect system can lead one into ruin because there is and will never be a perfect system. I am new to trading but I think one could compare a seasoned trader, even a very technical one using TA to an Jazz musician or pro poker player." Charts and trading are related but very separate at the same time." I think stock charts are more akin to a language created to describe the chaotic nature of trading than a mathematical chart even though they look similar and have many of the same features. "but the value is in the differences not the notes" I guess you are saying, for example, that five guys go long Apple at the same time and choose when to exit using the same charts but some will make money and some won't.[/quote]

my take on umpel's note is (a) there is only one market--we are just looking at it from different angles--so we are seeing the same thing--hence unless the viewer is faulty--then WE HAVE TO SEE THE SAME THING. this idea is insanely important--because most of the time we chose to accent differences as opposed to similarities (or be exclusive in our use of charts or ideas rather than inclusive). another way to say the same thing is that 90% of everything used (so indicators 1-2-3 order of separation from price action time and volume) are all a function of price volume and time. everything is derivative of the thing described.

charts are exactly like language to me in the sense that "words" are second order representations of a described reality. which usually go 3rd order at best in people's mind. also we are always looking at the past which is another separation. charts allude to something that is creating them--but mostly we don't see this. it's like looking at the Mona Lisa and saying it's a picture of a chick or Picasso's Guernica and saying "yo excited horse". both statements are true yet convey almost nothing about the thing described. likewise words often are taken at face value of less. if someone says something to you about an experience they had--that you have not had--and they describe it exactly perhaps in math--you will not understand what they are trying to say in the same way they mean it.

reading charts is like this. the object is to see from the bars and collections of bars--what is the meaning behind the bars that the bars are attempting to describe. just as you are trying to grasp what another is saying when they explain the mindblowing experience of stamp collecting or base jumping (not dissing either)

so language is a clue to what is in the speaker or writer's mind--it's not the end.

5 guys can not only go long aapl at the same time they can do it using options stock or a related future option or stock--or even more crazy they can go short while the stock is going up and catch a larger trade as dudes did at 705. so you have at least (1) the tool. (2) the size of position (which is relative to the risk of the market on the chart) (3) the time frame of the tool (say options you have different strikes and due dates) (4) the idea behind the trade. and you can use multiples of this at the same time if you like.

time frames can be seen as tumblers in a lock (like in the cool rip off movies where they show and xray of a safe cracking) say there are 5/15/30/60/d/w/m--when all these line up--you have the exact flawless trade--and you can play this like jazz trading in and out of 1-5 ideas or some larger number of related time frame interactions). so take spx at say 670 using a 15 min with a one month out out of the money call and then trade in and out of a 2-24 month updraft idea. the key is to be on it at moments like this.

the degree they can chill and feel the actin behind the price bars is the issue.

[taggard]

one last shot and i am gone--

trading is both very rational and very emotional. in the example of the lock with all tumblers in place (so 5 min 15 min 60 min day week month) all line up--there are two key elements. first the skill to see it in 5 time frames--and hold the mind steady while doing it. Second the emotional juice to get seriously at risk and likely have it feel like base jumping at the start. the honest truth is that trading is very emotional and that is why everyone is not rich. that is what separates it from simple chart reading. most of us either refuse to admit this or distort the process. so you get this "die hard" type dialogue. so it's important at key turns to have this emotional thing lined up right--and just "knowing" the trade is not really enough if you want to supersize it. fear just melts away and there is clarity for a while--it's more quite (eye of storm) and less gung ho. it doesn't feel like "i got it right" it feels more like "i heard something".

[ClarkW]

$BPGDM at 3.33.....holy smokes!

[Harapa]

Here is one that has worked since 1970 (and even possibly before than, but I didn't bother to look )
http://harapaninvesting.blogspot.com/20 ... ategy.html

[PanamaJack]

Here is one that has worked since 1970 (and even possibly before than, but I didn't bother to look )
http://harapaninvesting.blogspot.com/20 ... ategy.html

Harapa
Interesting charts and information at your site, thanks for posting.
Like you said a simple approach to investing.
PanamaJack

Theres still time to vote for the snake!