My standard model is in cash for Monday. We were in cash today, missing a short position call by the slightest amount.
I've been working on an experimental model which is based on the length of market cycles. This is not a regression model. The model does do very well for long periods of time but then breaks down during times of extreme volatility. I don't see an immediate fix for this problem. The model currently indicates that the market will move generally lower next week.
Rich
Market Direction
Started by
Rich
, Jul 16 2010 05:47 PM
5 replies to this topic
#2
pdx5
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I want return OF my money more than return ON my money
Posted 16 July 2010 - 06:41 PM
Rich,
I think you are a brilliant modeler of markets on computers.
So long as your models are correct more often than wrong, that is as good as it gets.
No one has and no one will ever solve the mystery of market moves 100%. The
biggest reason in no one can foresee or predict psychology of investors.
"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule
#3
timer
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Posted 16 July 2010 - 06:48 PM
In my opinion during these times, the psychology doesn't have anything to do with the markets, unless it's the psychology of the hft traders.
#4
Rich
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Posted 16 July 2010 - 07:18 PM
Rich,
I think you are a brilliant modeler of markets on computers.
So long as your models are correct more often than wrong, that is as good as it gets.
No one has and no one will ever solve the mystery of market moves 100%. The
biggest reason in no one can foresee or predict psychology of investors.
Thank you for the compliment. I think you are correct about the “psychology of investors.” What makes the analysis even more complex is that the psychology (behavior) is not static. For example, the amount of news (information) generated and the speed in which it is disseminated certainly affects the way investors view the markets and respond to conditions.
#5
milbank
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Posted 16 July 2010 - 07:39 PM
For me, a VST trader, it's the movement. . . direction and volume. If one or the other starts slacking, it's time to switch horses or just plain dismount. The rest, as Gordon Gekko put it, "is just conversation."
Edited by milbank, 16 July 2010 - 07:45 PM.
"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw
"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe
#6
qqqqtrdr
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Posted 16 July 2010 - 08:07 PM
For me it is Sentiment, McClellan, and Put/Call Ratio, Breadth, on a daily basis. No VST trading for me. Last three trades have been profitable....
Barry
