32 replies to this topic

[mini-trader]

Healthy markets need pullbacks (significant ones) to establish good support. This one has none. It will fall hard...the only question is WHEN!!! We should get a decent one by weeks end (expiration) for sure but nothing to hang your hat on.

[Tor]

..then we should be within a whisker of a good top....if not...every superdooper technical indicator that I've developed over more than the past decade is CRAP! Yes...divergence is divergence until it isn't...but in the majority of cases....price "usually" bows to divergence...but my top three of my said "superdooper" indicators are screaming sell as of 5 minutes ago..
I've got my eye glued to that OEX topping range mentioned earlier...ideally would like to see a quick pop over 520 and reverse...but anywhere between 516/520 could do it..

I would agree with NAV.

It would be premature to call and end to this rally purely based on a simplistic 50% fibonacci target level.

[eminimee]

Buzzz..Buzzzzz....Buzzzzzz..... Extreme Logging.... The pro's don't yell "TIMBER"...they just get out of the way.. ...just ask my D.O.G...

[Rich]

..then we should be within a whisker of a good top....if not...every superdooper technical indicator that I've developed over more than the past decade is CRAP!

I have not found a single technical indicator (that I know of) that correlates very well with market direction. What I have found is that functions of technical and fundamental indicators do a pretty good job predicting the future. For me, the future is a single day ahead. The functions are created using an evolutionary algorithm and are somewhat complex. Many of the functions contain up to 40 equations and reference 10 or more indicators. My feeling is that simple indicators do not work because they would be used by everyone and easily discounted. To be profitable, a model (function) must provide information that is not readily available or easy to obtain.

Rich

[kavaron]

As Thomas Bulkowski (maybe the greatest chart based analyst) said earlier this year in his blog, charts during 2007,2008 and 2009 work 50% less than they used to work during the past 20 years. He made a very big study on this conclusion which is in his blog but I could not find it now. In other words, it is 2 times more difficult to earn a penny today based on TA.

[NAV]

..then we should be within a whisker of a good top....if not...every superdooper technical indicator that I've developed over more than the past decade is CRAP!

I have not found a single technical indicator (that I know of) that correlates very well with market direction. What I have found is that functions of technical and fundamental indicators do a pretty good job predicting the future. For me, the future is a single day ahead. The functions are created using an evolutionary algorithm and are somewhat complex. Many of the functions contain up to 40 equations and reference 10 or more indicators. My feeling is that simple indicators do not work because they would be used by everyone and easily discounted. To be profitable, a model (function) must provide information that is not readily available or easy to obtain.

Rich

The more complex the models are, the worse the results. Seen way too many of them.

[Remo]

..then we should be within a whisker of a good top....if not...every superdooper technical indicator that I've developed over more than the past decade is CRAP!

I have not found a single technical indicator (that I know of) that correlates very well with market direction. What I have found is that functions of technical and fundamental indicators do a pretty good job predicting the future. For me, the future is a single day ahead. The functions are created using an evolutionary algorithm and are somewhat complex. Many of the functions contain up to 40 equations and reference 10 or more indicators. My feeling is that simple indicators do not work because they would be used by everyone and easily discounted. To be profitable, a model (function) must provide information that is not readily available or easy to obtain.

Rich

The more complex the models are, the worse the results. Seen way too many of them.

AMEN !! Took me a while to understand but once I did, results improved dramatically

I just have to quote J.L. once again:

"I think it was a long step forward in my trading education when I realized at last that when old Mr. Partridge kept on telling the other customers, "Well, you know this is a bull market!" he really meant to tell them that the big money was not in the individual fluctuations but in the main movements - that is, not in reading the tape but in sizing up the entire market and its trend."

<clip>

"And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at exactly the right time, and began buying and selling stocks when prices were at the very level which should show the greatest profit. And their experience invariably matched mine - that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance."

Edited by Remo, 16 November 2009 - 01:30 PM.

[arbman]

I discovered the holy grail, my system never works the same at two different tops or bottom, what is constant in my system is respecting to the change. Of course, it knows its odds and the real holy grail is really not in how your system forecasts, it is in fact how accurately it knows what it forecasts, or the amount of error, then your money management becomes the key in sustaining your growth (of your account)...

Best,
-arb

[maineman]

The reason simple systems work well is because there is no cure for fear, greed and poor money management. mm

[Rich]

The more complex the models are, the worse the results. Seen way too many of them.

Complexity does not always mean better results as overfitting is often a problem. A model will do very well comparing it with in-sample data. Blind testing (on out-of sample data) is usually done to test the merits of model.