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Preliminary Risk Windows for Next Week


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#1 Douglas

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Posted 29 May 2020 - 12:00 AM

Since it appears that Monday the 1st of June may be the next risk window for a turn or acceleration of the current trend in the DJIA based on my risk summation system, I thought I would publish something on it before the weekend.  The other risk window next week appears to be Thursday the 4th, but that is very preliminary at this moment and will require quite a bit more work to confirm.  

 

This past Monday's risk window was an acceleration day, and it appears the Thursday risk window at these wee hours of futures trading will in all probability tag a turn down making it two for two for the system.

 

Soapbox: That turn down is the other reason I'm posting this week's missive a bit early.  The DJIA hasn't quite made it to the 200 SMA, but it has made it to the 200 EMA and turned back down during the risk window which makes for a very bad visual.  This at the very same time that the POTUS has announced that he will shoot one of the geese that have been laying the golden NASDAQ eggs, social media.  Every mother's son has been slandered or has been slandering on social media, the shooter included.  Removing these companies' libel shield will potentially open them up to an absolute landslide in litigation which can't be good for the stock prices. Every since this plan was leaked, the NASDAQ has been lagging the DJIA.  The other bird which is potentially in the POTUS sights for Friday is the China trade. Before the virus, the China trade deflation force provided the FED cover to keep rates ridiculously low despite raging "real" inflation.  That could be a FED pump impeller wrecker.  I know that I'm going to regret saying this, but these two birds' demise may open the door to a much more  malevolent black bird of the swan variety, so the Monday risk window may really live up to its name.  Sorry, but I can't believe that the long cycle low that I've been waiting for is a no show.  This is pretty much its last chance to make it to the party.

 

Regards,

Douglas



#2 Rogerdodger

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Posted 29 May 2020 - 09:28 AM

Riots over weekend?

Gun/ammo sales skyrocket again?

 

I'm sick of "news" unless it's The Onion:

Protestors Criticized For Looting Businesses Without Forming Private Equity Firm First

“I understand that people are angry, but they shouldn’t just endanger businesses without even a thought to enriching themselves through leveraged buyouts and across-the-board terminations. It’s disgusting to put workers at risk by looting. You do it by chipping away at their health benefits and eventually laying them off. There’s a right way and wrong way to do this.”

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#3 pdx5

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Posted 30 May 2020 - 06:27 AM

In some countries, they shoot looters on sight. In those countries there is no looting at all.

The real victims of looting are the low wage employees of businesses destroyed.

No different than anarchy and lack of law and order. Free enterprise cannot survive long without law and order.

It will be years before Minneapolis will be repaired and built again. I blame the mayor and governor for the breakdown.


Edited by pdx5, 30 May 2020 - 06:32 AM.

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#4 Douglas

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Posted 30 May 2020 - 11:34 AM

Risk window update for next week:  The Monday the 1st and Thursday the 4th risk windows still look good, but Friday the 5th has reared its ugly head in the final calculations, so it must also be labeled as a risk window as well.  I suppose the best way to look at next week is as a barbell with higher risk at the front and back ends.  

 

I guess my expectations for a very weak Friday the 29th were thwarted when folks figured out that the POTUS can't actually change the liability of social media companies with an edict.   It apparently will take legislation and given the current House makeup that doesn't have a snowball's chance in July of happening.  Also the POTUS took no meaningful action on China on Friday, so all the poor bears have to cling to in this sea of bullishness is the rioting spreading across the US mentioned by RD and pdx5 above.  CNN's continuous virus head count table has disappeared and the all virus coverage all the time has been supplanted by a steady stream of riot videos.  It's hard to know how the stock market will react to these riots since according to the broken window theory of economics, burning businesses shut down anyway actually increases GDP since their loss won't show up on the GDP ledger, only the money spent to rebuild them.

 

Regards,

Douglas



#5 Dex

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Posted 30 May 2020 - 12:05 PM

In some countries, they shoot looters on sight. In those countries there is no looting at all.

The real victims of looting are the low wage employees of businesses destroyed.

No different than anarchy and lack of law and order. Free enterprise cannot survive long without law and order.

It will be years before Minneapolis will be repaired and built again. I blame the mayor and governor for the breakdown.

 

Many of those small business owners are privately thanking the rioters for burning their buildings down.  The virus killed their business.

They will take the insurance money and turn their property into parking lots. 


"The secret of life is honesty and fair dealing. If you can fake that, you've got it made. "
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#6 Dex

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Posted 30 May 2020 - 12:07 PM

Risk window update for next week:  The Monday the 1st and Thursday the 4th risk windows still look good, but Friday the 5th has reared its ugly head in the final calculations, so it must also be labeled as a risk window as well.  I suppose the best way to look at next week is as a barbell with higher risk at the front and back ends.  

 

I guess my expectations for a very weak Friday the 29th were thwarted when folks figured out that the POTUS can't actually change the liability of social media companies with an edict.   It apparently will take legislation and given the current House makeup that doesn't have a snowball's chance in July of happening.  Also the POTUS took no meaningful action on China on Friday, so all the poor bears have to cling to in this sea of bullishness is the rioting spreading across the US mentioned by RD and pdx5 above.  CNN's continuous virus head count table has disappeared and the all virus coverage all the time has been supplanted by a steady stream of riot videos.  It's hard to know how the stock market will react to these riots since according to the broken window theory of economics, burning businesses shut down anyway actually increases GDP since their loss won't show up on the GDP ledger, only the money spent to rebuild them.

 

Regards,

Douglas

 

I think you need to be a bit more clear about this risk window concept when you write.  Risk of what?  Which direction?


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#7 Douglas

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Posted 30 May 2020 - 01:26 PM

Dex, the answer to your direction question is Yes. The risk is for turn against the prevailing short term trend in place going into the risk window.  The risk window part of my system simply identifies days, like it says on the wrapper, that have a higher than normal risk of a change in the direction of the current trend or an acceleration in the price movement in the direction of the current trend.  I currently track some 70 reoccurring events and cycles that in the past have been coincident with turns in the market.  These events and cycles are widely followed, and so I believe they affect trading. I simply add up the number that occur each day and report the days with the highest number.  

 

What I have found is that days with the highest number are more likely to experience a turn in the indexes.  If the turn fails to occur, the indexes often accelerate in the direction of the current trend as traders seeing their favorite turn indicator fail, rush to cover their incorrect bet.  My system is not perfect since I am limited in the amount time I have to analyse and track these cycles and events, but the collection that I do track seems to work more often than not. 

 

I hope this helps.

 

Regards,

Douglas