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When you get lemons, make lemonade.
at 2006-02-06 23:45:28
Educational use only. Never intended as advice.
Well, I’m ticked. My connection to blogger.com crashed mid-message, so maybe it’s an act of God.
Summary of strategies:
- Mean reversion (buy and sell) of oversold and overbought investment vehicles, preferably ‘enhanced’ by intraday extensions
- Monitor markets for overbought or oversold status
- Monitor intraday using breadth, ‘beta’ action, financials, TRIN trend, and pure price action
- Hedge long positions with appropriate index options at market ‘extremes’
- Develop and test original strategies based on the work of Tom DeMark, Mark Boucher, Dave Landry, Kevin Haggerty, Larry Connors, and James O’Shaughnessy
- Adhere to a predetermined discipline of accepting loss, commissions, and slippage as an integral part of trading
We’re closing in on the 1260 level of SPX support. Note Stochastics rolling over. Conor thinks that the SPX is headed back to test 1240. I think that the 1260 test will hold, because the powers that be demand it.
Dynamics: It’s where you are
SP500: VXO ratio will it make a lower high?
TRIN5 slightly overbought at 1.12, with TRIN3 at 1.25
Put-call ratios show calls livin’ large
S&P500 weekly stochastics still threatening divergence
Mamis-Meisler breadth oscillator again getting overbought
Bullish percentage NYSE point-and-figure overbought and at resistance
Worden T2108 70%
VXO would you ‘buy’ this chart?
New highs still dwarfing new lows.
Screenable findings
Short scan candidates 111 (low but rising)
There are a number of inquiries concerning my ‘Mandelbrot’ algorithm. Because it is proprietary (and I believe truly original) suffice it to say it is a confluence of overbought and oversold indicators, but one I have automated for easy calculation. There is no ‘oscillator’ component to it, as I have developed it solely from price.
What I will do is periodically list the top and bottom few, none of which should come as any great surprise. I don’t apply it to small or microcaps, because I don’t think that the intensity of the signal is meaningful or reliable.
Here are the Dow Cats and Dow Dogs of Mandelbrot:
- CAT 67
- T 30
- PFE 30
- XOM 24
- AA 23
Dow Dogs
- INTC -46
- DD -27
- C -23
- MMM -20
- JNJ -19
For what it’s worth, I’ve gone heavily to the sidelines, awaiting further developments. My protests of what I (and others in the financial community) see as flagrant and dangerous intervention with market forces suggest to me that we are in for very difficult trading.
Good trading and great risk management.
Ron
Blog Source - http://ronsen.blogspot.com/atom.xml
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