03/23/2013 Weekend Update

[Cobra]

Begin with Algo from StockTiming.

In order to form a negative divergence, a new high is needed then finally a bigger pullback. So new high the next week (which means Cyprus problem would be solved in the weekend?).

[Cobra]

Smart money huge hedge, 3rd record high short.

[Cobra]

II a little extreme but not extremely extreme I'd like to see. AAII tells nothing.

[Cobra]

A few info about my weekly stock picks. viewtopic.php?f=10&t=865&p=123905#p123905

[Cobra]

the summary of the week's stock picks.
viewtopic.php?f=10&t=856&p=123908#p123908

[Cobra]

The next week's stock picks: viewtopic.php?f=10&t=866&p=123910#p123910

[Cobra]

Demo of how accurate my daily live update can be. It's free but it doesn't mean bad quality. You're welcome there!
viewtopic.php?f=2&t=867&p=123912#p123912

[uempel]

Hey Cobra, where is everybody? Are you and I the only fools who don't do anything smart on a Saturday? No playing with kids or garden tools, no shoveling snow or walking the dog? Only staring at charts and trying to predict next week? Kind of stupid, right

I see long term SPX as negative. Unlikely that SPX can break through resistance at first attempt. Suggests that there should be some real downside before SPX can break higher.

BPNYA shows there will be a nice move next week, doesn't tell us in which direction.

Long term SPX

BPNYA with a time signal for next week

[taggard]

All them Grand Masters and them Europeans... with they government subsidies and whatnot to sit on they asses and play all day...they ain't livin'in the world, Put the clock on 'em, put the heat on they backs,they break down. Put 'em in the park fishin' for dollars, and they break.

That's Bobby Fisher, Some say he's the greatest player to ever play the game, I never played him. All them patzers sittin' around the park... waitin' for him to go back there like Jesus. Me, I don't give a sh**.

Put the clock on that mother****... I'll chew his ass up just like the rest of'em. Chew it right up.

Critical analysis of speed chess tactics/intuition (caudate nucleus) vs longer term/strategic chess (cortex stuff) from the great trading film "Fresh". (nice version see "searching for bobbie fisher")subject of movie (waitzkin) wrote a book called “the art of learning” which is worth it.

3-22-13 GAME OF JAPANESE CHESS REVEALS HOW EXPERTS DEVELOP CAPACITY FOR PROBLEM SOLVING
(Medical Xpress)—The superior capability of experts to rapidly solve problems depends largely on their intuition, and it has long been known that this is related to experience and training. Although many psychological models relating to the development of intuition have been proposed to explain this phenomenon, none have been validated, and the underlying neural mechanisms remain a mystery.

Keiji Tanaka and colleagues from the Cognitive Brain Mapping Laboratory and Support Unit for Functional Magnetic Resonance Imaging at the RIKEN Brain Science Institute have now shown that activity in the basal ganglia of the brain, which is related to the automatic, rapid information processing or intuition characteristic of experts, develops during the course of training. The work provides a first insight into the neural response of the brain to extended training and hints at ways to improve the efficiency of training experts in industry.

In earlier work, another research team led by Tanaka showed that amateur players of the Japanese chess-like game of shogi plotted their best next-moves consciously using the human brain's highly developed cerebral cortex. In contrast, they found that in professional players an important part of this process was unconscious or intuitive and had shifted to the head of the caudate nucleus in the basal ganglia, a much older part of the brain. This would leave the cortex free for higher-level strategy, the researchers suggested. Yet it remained unclear as to whether this shift of neural activity was entirely due to training, or dependent to some extent on pre-existing ability.

Tanaka's most recent experiments involved training 20 novices for 15 weeks in mini-shogi, a simplified version of shogi. After about two weeks and again at the end of the 15-week program, the intuition of the volunteers was tested through their ability to come up with the best next-move to end-phase patterns of mini-shogi games. To ensure the answers were intuitive, each problem was presented for just two seconds and participants had to respond within three seconds. During this process, brain activity was recorded using functional magnetic resonance imaging (fMRI). The researchers found that activity in the caudate nucleus developed over the training period, whereas activity in the cortex remained unchanged.
"This work should open a fruitful interaction between the cognitive psychology of expertise development and biological studies of the basal ganglia," says Tanaka. "We now would like to elucidate what computations the caudate nucleus conducts in generating the best next-move."

Check out movies (1) Fresh (my preferred trading film) (2) Searching For Bobby Fisher (both show speed chess vs longer term)

In terms of trading—(imo) this implies starting by following a rule based laborious approach—and fully integrating the rules—such that they are experienced as intuitive—after which they must be functionally ignored or minimized here and there--in order to get past them to see what is underlying. It’s not that the rules are totally invalid—it’s that the process of using them by thinking is a problem. But above all is the major idea that at least 2 (and I strongly suspect more) areas of the brain (mostly) and thus 2 different approaches can be used to trade. It seems obvious that the switch from cortex to faster and more economical processing can be altered by learning eg focus. Further there is no reason to assume that longer term charts need to be “thought about” or that shorter term charts “can be intuitive” it’s just that the time factor forces shorter term traders to trade closer to intuitive. You care because using an intuitive price action only day trading style can easily work longer charts.

So (1) fully integrate the rules and keep them simple—chess is complex but you don’t hear players saying “dude the fed meeting is a huge issue” they play the board as it evolves. (fed meeting could easily (mostly) be an example of “thinking vs intuitive rules”.) (2) while learning rules—don’t force the issue but after 1000-10000 chart reads (easier if you have record of hits misses—and what was optimal read as opposed to the read you made) start looking to drop thinking slowly. (3) test to see if thinking is good or bad. (4) consider extending your approach to larger time frame—eg (past example) you can see 2000 to current as a range—it doesn’t get much more simple—yet we tend to obsess with much smaller moves. (future example) assuming pull back on monthly (range continues) after major break (so monthly trend test from below that fails in one form or another) look for a 23.6 fib use moving stop on 2-4 month position (just as day trading).

Bottom line: apparently you must internalize the rules (think) 1000% so that you can effectively play both inside and outside (dig up jazz improve stuff and listen). But at some point you are held back by thinking things out—and you must drop this hard won skill set to get intuitive. To do this you use not only a different conscious approach—but a different part of the brain. It may be the cortex is freed up for more complex stuff—or it could be the cortex is more like training wheels. The problem with human signal processing is the (1) speed (2) past learning (3) outside noise (other traders news dog what have you) (4) inside noise (our past habits fears greed etc). we are taught thought is the solution but it is likely only a part of the solution.

[TradingJackal]

TLT should be getting some love soon.

[taggard]

[quote="uempel"]Hey Cobra, where is everybody? Are you and I the only fools who don't do anything smart on a Saturday? No playing with kids or garden tools, no shoveling snow or walking the dog? Only staring at charts and trying to predict next week? Kind of stupid, right

uempel if you feel like it could you discuss a bit how you handle situations like that large price action oval chart indicating epic overhead in here? do you just take a position? and if so (or not) how do you size it? not that it matters but my feeling is we are almost there if not there=--but the ideal would be a spike up on a weekly or monthly to closer to 1600 mostly just enough to whack anyone with stops at 1570ish. in your chart you have a nice double oval in 200 that seems to have a spike though it--but largely held. functionally the idea would be "any short term violation would prove the pattern"--thus it would make it even easier to add to the short side.

thank you

[BullBear52x]

While everyone is staring at triangle and force your bias to see the out come, here is some thing to confuse you further

[BullBear52x]

And here is our new normal. who said no single man can curve the market? wrong again.....

[BullBear52x]

JPM eyeing 45 and MS eyeing 19.5

[BullBear52x]

Will AAPL challenge 480.5? new high after my sell on Thursday suggest next dip will be bought, but only above 448.5. lower than that it will resume its down trend.IMO

[Mr. BachNut]

The SKEW chart continues to evolve.
A correction warning is still in effect.
This week provided a reinforcing signal as the SKEW again fell below its moving average.

Technically, the last signal will be scored positively on the chart because we experienced a lower weekly close.
While there was some corrective action last week, the close was just a wee bit lower so not much of a correction so far.

Of note, the SKEW came down quite a bit and may finally have entered the decline phase.
If so, it may mean the option market bears have their positions on and the trade is now playing out.
There is a prospective target of at least SPX 1512.29 for a corrective move. We shall see.

[BullBear52x]

C, buy the dip at support mid to long term set up.

short term swing is still on sell.

[uempel]

Hey Cobra, where is everybody? Are you and I the only fools who don't do anything smart on a Saturday? No playing with kids or garden tools, no shoveling snow or walking the dog? Only staring at charts and trying to predict next week? Kind of stupid, right

uempel if you feel like it could you discuss a bit how you handle situations like that large price action oval chart indicating epic overhead in here? do you just take a position? and if so (or not) how do you size it? not that it matters but my feeling is we are almost there if not there=--but the ideal would be a spike up on a weekly or monthly to closer to 1600 mostly just enough to whack anyone with stops at 1570ish. in your chart you have a nice double oval in 200 that seems to have a spike though it--but largely held. functionally the idea would be "any short term violation would prove the pattern"--thus it would make it even easier to add to the short side.

thank you

Calling tops is a tricky business. Unless it's for lightening up , hedging or daydrading the serious trader doesn't do anything: going against a bull trend is not a lucrative business and mostly a loser's play. If some guy is very savvy he can ride those dips, but it's like surfing down in Portugal where the breakers rise to 100 feet

http://www.nydailynews.com/news/nationa ... -1.1250687

If a top is confirmed (e.g. break of 1525/1472) the paradigm changes.

Sorry Taggard, but this is the only advice I'm going to give here...

[uempel]

Here a close look at momentum 191 and SPX:

[BullBear52x]

XIV, so long the vixxies are under their MA I am bearish.