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      07-05-2011, 01:23 PM   #23
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Last week was good price wise but volume wise it was abit weak...we should see some early weakness this week but as long as 1300-05 holds, we should be in business for the rally for second half of this yr...if we dont hold 1300 we will prob get choppy mkt again.
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      07-05-2011, 04:32 PM   #24
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Ah fundamental vs. technical analysis... if one is making blind predictions based on not much, is that much different than predictions based on a certain indicator doing something specific (like breaching a bollinger band)?

So EVERY time the SPX falls below 30% it USUALLY marks a bottom? That can be reduced to "usually when A happens, B happens" which is dangerously close to one of those "recommendations based on air."

Anyway, I mean no disrespect. I'm a firm believer in both fundamental and technical analysis when used in a logical way but do you have any financial or economic insight as to why you think there's a bottom forming at certain times or why the VIX breaking a +2 standard deviation is meaningful? Are you assuming that VIX levels are normally distributed?
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This thread is meant for stock mkt trading based on technicals and other rational theories....not meant for blindly making recommendations based on air...we will all be right and wrong, but here lets at least have a reason why we think the way we do.

I posted this chart 1-2 wks ago and this was one of the reasons a long position was reasonable at the time.

the % of SPX stocks trading below the 50 day moving avg can sniff out bottoms...every time it goes below 30% usually marks a bottom...also need to watch blow off tops in the VIX(watch if its trading above 2 standard deviations above the mean).

I usually post on trading boards but since I spend alot of time on here, I will start a thread here.

http://screencast.com/t/3kiho4tgNrw
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      07-05-2011, 06:37 PM   #25
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You have to look at market delta charts and effective volume charts...they tell you what the big boys are doing...high price range/expansion without volume expansion means its shorts covering and that there is no inherent buying from bulls...2-3 wks ago when bears were salivating I was here telling people to go long...when bearish sentiment reaches extremes and you see a certain % breached on % of stocks trading over 50 day moving avg, that tells you all the bulls have capitulated and there are no more bears to bring it down...hence you get buying pressure...each chart tells a story, youre job is to figure it out on your own with some guidance of course.



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Originally Posted by scorcherjf View Post
Ah fundamental vs. technical analysis... if one is making blind predictions based on not much, is that much different than predictions based on a certain indicator doing something specific (like breaching a bollinger band)?

So EVERY time the SPX falls below 30% it USUALLY marks a bottom? That can be reduced to "usually when A happens, B happens" which is dangerously close to one of those "recommendations based on air."

Anyway, I mean no disrespect. I'm a firm believer in both fundamental and technical analysis when used in a logical way but do you have any financial or economic insight as to why you think there's a bottom forming at certain times or why the VIX breaking a +2 standard deviation is meaningful? Are you assuming that VIX levels are normally distributed?
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      07-05-2011, 07:03 PM   #26
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So what the "big boys" are doing is the correct decision? I'm just curious about predictive power with just looking at graphs... it's great you can say what your 1 prediction was last week that came true, but do you honestly think you know the reasons behind it or are you fitting the story to the history? A chart may tell you a story... but it's also a lot of noise. With your market sentiment and bull/bear explanation it sounds a lot more like guessing at market psychology than technical analysis to me.

When I think of technical analysis I think of a disciplined approach to mathematically analyzing data and building robust indicators. Have you back-tested your SPX minimum or VIX bollinger band strategies? If you can see a significant behavior based on the data then there's something to look into but if you're just pointing out arbitrary times where your indicators forecasted correctly but kind of ignore the times where it hasn't then that's a bit haphazard.
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You have to look at market delta charts and effective volume charts...they tell you what the big boys are doing...high price range/expansion without volume expansion means its shorts covering and that there is no inherent buying from bulls...2-3 wks ago when bears were salivating I was here telling people to go long...when bearish sentiment reaches extremes and you see a certain % breached on % of stocks trading over 50 day moving avg, that tells you all the bulls have capitulated and there are no more bears to bring it down...hence you get buying pressure...each chart tells a story, youre job is to figure it out on your own with some guidance of course.
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      07-05-2011, 08:49 PM   #27
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Originally Posted by scorcherjf View Post
So what the "big boys" are doing is the correct decision? I'm just curious about predictive power with just looking at graphs... it's great you can say what your 1 prediction was last week that came true, but do you honestly think you know the reasons behind it or are you fitting the story to the history? A chart may tell you a story... but it's also a lot of noise. With your market sentiment and bull/bear explanation it sounds a lot more like guessing at market psychology than technical analysis to me.

When I think of technical analysis I think of a disciplined approach to mathematically analyzing data and building robust indicators. Have you back-tested your SPX minimum or VIX bollinger band strategies? If you can see a significant behavior based on the data then there's something to look into but if you're just pointing out arbitrary times where your indicators forecasted correctly but kind of ignore the times where it hasn't then that's a bit haphazard.

Nope...I use to follow guys who would grind numbers and formulas to grind out a few % pts...no need...this is a M3 board, not a paid stock trading site...only time and people who understand charts and mkt psychology will be able to tell if I am full of it...but what you want are guarantees and there are none...not in the mkts anyway...you want something for free yet havent contributed a single chart on this thread...I have put up charts and if you dont understand them just ask me about it.

But what I wont do is go on some website and ask people who actually do some work to give it to you for free when others are willing to pay 50.00 a month for it.....

So what do you offer?....

And btw, I am guessing you dont know what market delta and effective volume charts are and what they look like.

But in the end, your guess is as good as mine...there are no guarantees or sure things...its just that some peoples guesses are better than others....

Last edited by mact3333; 07-05-2011 at 08:55 PM.
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      07-05-2011, 09:33 PM   #28
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Well that's kind of what I wanted to point out. Anyone's guess is as good as anyone else's. So is this thread supposed to mirror the other thread in that we make predictions, back it up with some chart or something, and see if it pans out?

I just don't want people who aren't into finance getting the wrong idea of what technical analysis is. Coming in here and throwing up charts is fine but it might actually be doing people a disservice by making them think that they can gamble their money away based on candlestick triangle formations and other rubbish. I'm offering nothing, and so are you since this is an off-topic thread on a BMW forum talking about trading strategies... you're right about that.

And yes I know what those charts are considering I have a graduate degree in this field and work with them daily...
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So what do you offer?....

And btw, I am guessing you dont know what market delta and effective volume charts are and what they look like.

But in the end, your guess is as good as mine...there are no guarantees or sure things...its just that some peoples guesses are better than others....
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      07-05-2011, 11:15 PM   #29
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A grad degree in TA?...lol...okaaayy......I offer theories and charts...like I said before you come with nothing...I actually trade based on my charts and theories...nobody is asking anyone here to trade or take any action...it is a place for discussion, no more no less...you can participate or go to the other stock mkt thread and trade NFLX, AAPL, SIRI.

I could care less whether you are a professional trader, a money mgr, or a grunt trying to learn the ropes at GS...none of that means anything when it comes to trading...you cant create a John Paul Jones or Jesse Livermore from a school.

When it comes to trading, a degree in business, finance or anything else they teach in college is worthless imho...you have to know what the institutions are doing and thats the bottom line...and good intuition is helpful also...most of the avg Joe volume doesnt move mkts...institutional volume does...and take into consideration that 75% of the trading volume on the big board is quant black box trading so the avg Joe's have very little influence on walls street...but I am sure your degree teaches you about renting a black box 100 ft closer to the big board at 200K a month to gain that nanosecond advantage right?...about as useful as Elliott wave theory or how about Dow Theory?....

Some one once said to me it doesnt take much of a man to come on a MB and be critical...but it does take a man to come on a public forum and take a stand and either make or lose money based on that, now that you can respect, whether they are correct or not.

You seem to think that because someone comes on here and posts charts and takes a stand, that they would be at fault if someone chose to take that thread?...hmm, really?...I lost some on SIRI, AAPL, NFLX after reading the stock mkt I thread, Im gonna go on that thread and ask for a refund and weep?...


Week or so ago when silver was getting pounded I noted I liked AGQ(double long silver)...here is why...while price was getting pounded(lower chart), large players were accumulating using effective volume(first chart)...you see AGQ today?...it made me happy....

http://img818.imageshack.us/img818/1268/silverchart.gif

http://img143.imageshack.us/img143/1576/silver2q.gif






Quote:
Originally Posted by scorcherjf View Post
Well that's kind of what I wanted to point out. Anyone's guess is as good as anyone else's. So is this thread supposed to mirror the other thread in that we make predictions, back it up with some chart or something, and see if it pans out?

I just don't want people who aren't into finance getting the wrong idea of what technical analysis is. Coming in here and throwing up charts is fine but it might actually be doing people a disservice by making them think that they can gamble their money away based on candlestick triangle formations and other rubbish. I'm offering nothing, and so are you since this is an off-topic thread on a BMW forum talking about trading strategies... you're right about that.

And yes I know what those charts are considering I have a graduate degree in this field and work with them daily...

Last edited by mact3333; 07-05-2011 at 11:24 PM.
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      07-06-2011, 12:05 AM   #30
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Haha well I meant finance obviously. You can make fun of that and tell me how worthless it is and that's fine - you're entitled to that opinion and I'm not going to argue with you about it. Lets just say I'm on the other side of the spectrum - the grunt trying to learn the ropes on the black box side of things.

I can't offer my "insight" for obvious reasons but I do like to discuss combining economic and financial theory with quantitative trading. If this thread is reserved for staring at charts and trying to see shapes and figures in them then I'm afraid I can't add anything but if you do discuss market dynamics then I'd be happy to chime in with my crazy thoughts. I just don't like seeing people only bragging about their winning trades and making it seem like they never lose because we all know that's bull. You admit you've lost money, as have I, and I've learned from those trades as I'm sure you have.

You mentioned earlier that metals and the general markets move the same way but how are you quantifying this? If you mean the general "drift" then of course that would be correct, but if you actually look at the returns the correlation between gold and the S&P is actually quite low, while the correlation between gold and silver is pretty high (obviously). Gold is usually regarded as a longer term inflation hedge so subtracting inflation out of market prices and comparing them with gold returns actually doesn't show much of a relationship.

Also... be careful with leveraged ETFs because their fees aren't exactly what they make it out to be. You said you stopped following those number crunchers so I guess you're not really concerned with that then.
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Originally Posted by mact3333 View Post
A grad degree in TA?...lol...okaaayy......I offer theories and charts...like I said before you come with nothing...I actually trade based on my charts and theories...nobody is asking anyone here to trade or take any action...it is a place for discussion, no more no less...you can participate or go to the other stock mkt thread and trade NFLX, AAPL, SIRI.

I could care less whether you are a professional trader, a money mgr, or a grunt trying to learn the ropes at GS...none of that means anything when it comes to trading...you cant create a John Paul Jones or Jesse Livermore from a school.

When it comes to trading, a degree in business, finance or anything else they teach in college is worthless imho...you have to know what the institutions are doing and thats the bottom line...and good intuition is helpful also...most of the avg Joe volume doesnt move mkts...institutional volume does...and take into consideration that 75% of the trading volume on the big board is quant black box trading so the avg Joe's have very little influence on walls street...but I am sure your degree teaches you about renting a black box 100 ft closer to the big board at 200K a month to gain that nanosecond advantage right?...about as useful as Elliott wave theory or how about Dow Theory?....

Some one once said to me it doesnt take much of a man to come on a MB and be critical...but it does take a man to come on a public forum and take a stand and either make or lose money based on that, now that you can respect, whether they are correct or not.

You seem to think that because someone comes on here and posts charts and takes a stand, that they would be at fault if someone chose to take that thread?...hmm, really?...I lost some on SIRI, AAPL, NFLX after reading the stock mkt I thread, Im gonna go on that thread and ask for a refund and weep?...


Week or so ago when silver was getting pounded I noted I liked AGQ(double long silver)...here is why...while price was getting pounded(lower chart), large players were accumulating using effective volume(first chart)...you see AGQ today?...it made me happy....

http://img818.imageshack.us/img818/1268/silverchart.gif

http://img143.imageshack.us/img143/1576/silver2q.gif
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      07-06-2011, 01:18 AM   #31
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Black box trading is great for large hedge funds or banks...they can legally manipulate the system because they have the lobbyists and politicians on their side...when they fail the tax payers must bail them out...thats how the game works...we, on the other hand, must ride along with the cheaters and manipulators cause if we dont, we get our head handed to us.

During a true bull mkt, anyone throwing darts can be and look smart...its the choppy or bear mkts that seperate real traders from the go long and hide group.

Believe me, I have had many many bad trades in my life and will cont to have them...only way to make money is to catch a trend change and ride it...for the avg Joe, if you try to trade for the short term, you will lose 90% of the time.

You needed to catch that bottom on 3/9/09...now the goal is the catch "the top" and ride the bear down when it comes...I am banking on inflation for now...the charts look like 1962-1982...I am looking for a massive expanding triangle on a 20 year chart to play out...will it happen?...who knows, but I have reasons to believe it will...wouldnt surprise me to make all new time highs late this yr or early next yr followed by 2 yrs of declines undercutting 666 on SPX in 2013-2014.

Our economy is a ponzi scheme and everyone knows it...the bond vigilantes will wake up one day and demand that interest rates go up...the Federal reserve only knows one thing, to expand the money supply...alot during bad times and a little during good times...hence the value of the dollar has decreased by 98% since the inception of the Fed Reserve....do you think this trend will change????...not likely...once we hit 5.00 gas inflation will halt our economy and the fake nominal gains you get on SPX will be overshadowed by the 800.00 a month you spend on gas...funny thing is this, if Obama increased your tax rate by 10% you would throw a shit fit, but when the Fed Reserve increases their balance sheet by 2T over several yrs(printing money out of thin air), its doing the exact same thing by causing inflation but nobody will raise an eyebrow about this... this is a clandestine tax that wont be appreciated by most cause the "people" in charge do such a great job of hiding the ponzi scheme....

Its a funny world, my wife is a CPA and they never taught her in college how banking(fractional banking) works...find that abit odd?...I know bankers who couldnt explain it to me also...hmmm....

I could post more charts on here showing "my" likely roadmap for the future but I wont...not until you show me something useful...




Quote:
Originally Posted by scorcherjf View Post
Haha well I meant finance obviously. You can make fun of that and tell me how worthless it is and that's fine - you're entitled to that opinion and I'm not going to argue with you about it. Lets just say I'm on the other side of the spectrum - the grunt trying to learn the ropes on the black box side of things.

I can't offer my "insight" for obvious reasons but I do like to discuss combining economic and financial theory with quantitative trading. If this thread is reserved for staring at charts and trying to see shapes and figures in them then I'm afraid I can't add anything but if you do discuss market dynamics then I'd be happy to chime in with my crazy thoughts. I just don't like seeing people only bragging about their winning trades and making it seem like they never lose because we all know that's bull. You admit you've lost money, as have I, and I've learned from those trades as I'm sure you have.

You mentioned earlier that metals and the general markets move the same way but how are you quantifying this? If you mean the general "drift" then of course that would be correct, but if you actually look at the returns the correlation between gold and the S&P is actually quite low, while the correlation between gold and silver is pretty high (obviously). Gold is usually regarded as a longer term inflation hedge so subtracting inflation out of market prices and comparing them with gold returns actually doesn't show much of a relationship.

Also... be careful with leveraged ETFs because their fees aren't exactly what they make it out to be. You said you stopped following those number crunchers so I guess you're not really concerned with that then.
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      07-07-2011, 09:02 AM   #32
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as noted, the trend is up...playing job numbers is for suckers imho...if number good we go up, if number bad, after initial selloff we go up as people will expect QE 3...long AGQ, TNA, REE for past week.

Four up or down days in row usually means trend change.

Institutions will buy brief selloffs now.

If it was up to me, I would ram this thing up to 1375 and make sure all the late avg Joes "finally" climb on board long and then take it down 20-30 pts...then when these people panic sell, then the rally will ensue...to cause the most pain to the masses is always the name of the game.

Last edited by mact3333; 07-07-2011 at 09:29 AM.
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      07-07-2011, 11:30 AM   #33
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Large banks and hedge funds have rules and regulations to abide by and of course they'll do anything within their power to maximize wealth to shareholders and/or profits while still conforming to their set of "constraints." If anything, the ones to blame are the government policies, lack of regulation and oversight, and out-dated rules and regulations which are often way too slow at keeping up with current market trends and technologies. It often takes a meltdown or a crisis for them to wake up and finally act and by then it's already too late (i.e. LTCM, tech bubble, quant crisis 07, CDS/MBS crash 08, junk rally 09, and now the EU/PIIGS and China). And yes, individual investors will often bear the brunt of the damage since they're typically slower at acting (they have other jobs usually), don't have as much information (asymmetry), and lack the tools necessary to be as liquid - three things that are required for arbitrage-free and efficient markets.

True, the probability of guessing correctly during bull markets is higher but that's obvious. What separates amateur traders and experienced ones is often their risk management. Sure their success rate is probably similar, but the one who correctly sizes his/her trades will ultimately yield superior performance.

Your views of our government and financial markets really sounds niave... I actually had similar thoughts years ago when I was still a student testing different strategies. Once you actually do some digging and learn how a lot of the financial systems work like the federal reserve's role, the house banking committee, etc. and how they interact with each other you'll probably realize that everyone's not out to "get you" and big brother isn't there just to squash down the little guy. Perhaps one day you'll realize that the other players aren't "cheaters" but merely acting within their capacity - you would probably do the same if you were in their position so try and see things from other perspectives.

About the CPA... that's accounting which isn't exactly finance. Why would you expect them to teach CPA's how the whole banking and financial system works when it's something that's barely even taught in business schools or finance degrees? Do some research and look at what those degrees actually say they attempt to teach you and you'll see that it's mostly quantitative tools which are necessary in the field. It's up to the person to use those tools to learn about what they want after with a more disciplined and objective viewpoint. Their understanding of the banking system may not be any better than yours, and if it is, it's not because of their fancy degree but because they've sat down and reasoned through it rather than dismissing the whole system as a scam.

Anyway, with your charts, "mini cup handles", triangle breakouts, etc. you make pretty common mean reversion predictions. My amateur advice to you would be to scrap those etch-a-sketch drawings on charts and use more solid indicators (credit spread and vol swap rates perhaps) and build a model that you can backtest and verify. My amateur economic advice would be to keep an eye on China. Sure they may have increasing inflation and some local debt issues recently but their growth is insane and it seems to be hard for capitalist americans to comprehend how a controlled government could actually be successful. The U.S. is in a terrible position right now with their public debt, labor unions, and possibly declining into stagnancy. It's a lot easier to fight inflation than deflation... look at Japan's history.
Quote:
Originally Posted by mact3333 View Post
Black box trading is great for large hedge funds or banks...they can legally manipulate the system because they have the lobbyists and politicians on their side...when they fail the tax payers must bail them out...thats how the game works...we, on the other hand, must ride along with the cheaters and manipulators cause if we dont, we get our head handed to us.

During a true bull mkt, anyone throwing darts can be and look smart...its the choppy or bear mkts that seperate real traders from the go long and hide group.

Believe me, I have had many many bad trades in my life and will cont to have them...only way to make money is to catch a trend change and ride it...for the avg Joe, if you try to trade for the short term, you will lose 90% of the time.

You needed to catch that bottom on 3/9/09...now the goal is the catch "the top" and ride the bear down when it comes...I am banking on inflation for now...the charts look like 1962-1982...I am looking for a massive expanding triangle on a 20 year chart to play out...will it happen?...who knows, but I have reasons to believe it will...wouldnt surprise me to make all new time highs late this yr or early next yr followed by 2 yrs of declines undercutting 666 on SPX in 2013-2014.

Our economy is a ponzi scheme and everyone knows it...the bond vigilantes will wake up one day and demand that interest rates go up...the Federal reserve only knows one thing, to expand the money supply...alot during bad times and a little during good times...hence the value of the dollar has decreased by 98% since the inception of the Fed Reserve....do you think this trend will change????...not likely...once we hit 5.00 gas inflation will halt our economy and the fake nominal gains you get on SPX will be overshadowed by the 800.00 a month you spend on gas...funny thing is this, if Obama increased your tax rate by 10% you would throw a shit fit, but when the Fed Reserve increases their balance sheet by 2T over several yrs(printing money out of thin air), its doing the exact same thing by causing inflation but nobody will raise an eyebrow about this... this is a clandestine tax that wont be appreciated by most cause the "people" in charge do such a great job of hiding the ponzi scheme....

Its a funny world, my wife is a CPA and they never taught her in college how banking(fractional banking) works...find that abit odd?...I know bankers who couldnt explain it to me also...hmmm....

I could post more charts on here showing "my" likely roadmap for the future but I wont...not until you show me something useful...
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      07-07-2011, 11:58 AM   #34
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Quote:
Originally Posted by scorcherjf View Post
Large banks and hedge funds have rules and regulations to abide by and of course they'll do anything within their power to maximize wealth to shareholders and/or profits while still conforming to their set of "constraints." If anything, the ones to blame are the government policies, lack of regulation and oversight, and out-dated rules and regulations which are often way too slow at keeping up with current market trends and technologies. It often takes a meltdown or a crisis for them to wake up and finally act and by then it's already too late (i.e. LTCM, tech bubble, quant crisis 07, CDS/MBS crash 08, junk rally 09, and now the EU/PIIGS and China). And yes, individual investors will often bear the brunt of the damage since they're typically slower at acting (they have other jobs usually), don't have as much information (asymmetry), and lack the tools necessary to be as liquid - three things that are required for arbitrage-free and efficient markets.

True, the probability of guessing correctly during bull markets is higher but that's obvious. What separates amateur traders and experienced ones is often their risk management. Sure their success rate is probably similar, but the one who correctly sizes his/her trades will ultimately yield superior performance.

Your views of our government and financial markets really sounds niave... I actually had similar thoughts years ago when I was still a student testing different strategies. Once you actually do some digging and learn how a lot of the financial systems work like the federal reserve's role, the house banking committee, etc. and how they interact with each other you'll probably realize that everyone's not out to "get you" and big brother isn't there just to squash down the little guy. Perhaps one day you'll realize that the other players aren't "cheaters" but merely acting within their capacity - you would probably do the same if you were in their position so try and see things from other perspectives.

About the CPA... that's accounting which isn't exactly finance. Why would you expect them to teach CPA's how the whole banking and financial system works when it's something that's barely even taught in business schools or finance degrees? Do some research and look at what those degrees actually say they attempt to teach you and you'll see that it's mostly quantitative tools which are necessary in the field. It's up to the person to use those tools to learn about what they want after with a more disciplined and objective viewpoint. Their understanding of the banking system may not be any better than yours, and if it is, it's not because of their fancy degree but because they've sat down and reasoned through it rather than dismissing the whole system as a scam.

Anyway, with your charts, "mini cup handles", triangle breakouts, etc. you make pretty common mean reversion predictions. My amateur advice to you would be to scrap those etch-a-sketch drawings on charts and use more solid indicators (credit spread and vol swap rates perhaps) and build a model that you can backtest and verify. My amateur economic advice would be to keep an eye on China. Sure they may have increasing inflation and some local debt issues recently but their growth is insane and it seems to be hard for capitalist americans to comprehend how a controlled government could actually be successful. The U.S. is in a terrible position right now with their public debt, labor unions, and possibly declining into stagnancy. It's a lot easier to fight inflation than deflation... look at Japan's history.

1. The banks and HF's do cheat...we dont have the same access as them(quant boxes, inside info, etc)...you are naive if you think just because soemthing isnt against the law it is still immoral cause look at who is writing the laws...you say I would do the same thing if I was in their position and youre right I would, because I am human, but its still cheating in the end...we dont get bailouts, they do...they do because "they" ARE the govt and politics...you think the politicians are working for us?...lol...we told them 1000:1 no bailouts but they did it anyway...we told them no Obama healthcare and they did it anyway...politicians are paid servants.

2. you dont think a CPA takes finance classes?......why dont most people in banking understand fractional banking?...why dont they teach how banking works in college?...hmm...so we must learn and dig info like this on our own?...hmmm...odd.

3. you imply I use charts only...dont think so...I was watching CDS and RMBS credit spreads before you were prob working...how do you think I sold most real estate holdings in 06'???...why I went short financials in 08'...I watch it all...I look at M2 and M3(non-published now, I wonder why)...gotta watch money flow into certain stocks and sectors...Elliott Wave, Dow Theory, Effective Volume, Mkt delta....they are all useful to some degree but the key is to synthesize all the info to something useful for yourself...you imply alot of things but you have no idea what I use and how I trade...techn. analysis is only a part of the equation.

4. agree with you inflation easier to deal with then deflation...cause nominal gains in equity mkts give the illusion of wealth and the sucker game can continue longer.

5.with more experience, imho you will respect tech analysis and volume data more...TA and volume data doesnt lie...but people do.
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      07-07-2011, 12:09 PM   #35
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wanna know what I thought about the economy and the mkts over 3 yrs ago before the implosion, here is my post from March 2008 on another MB.




Msg 185238 of 407554 at 3/3/2008 11:08:28 PM by

mact3333


Since Were Talking Economy Here:
First of all, I have no long positions except the gold etf GLD. I have been short housing, financials, nasdaq, sp500, china for the past 4 months and my previous posts will reflect this...I have no hidden agenda so I really dont care if you buy or sell this mkt.

What I am commenting on is this...I totally disagree with anyone that thinks this is your run of the mill mild recession...ultimately this might turn out to be the case since I dont have a crystal ball(a reliable one anyway) but odds are favoring something that we wont recover from in a quarter or two...here is my reasoning....ok, if youre looking beyond 2 yrs Im sure we will recover at some point but I think the mkt will be in general be very choppy but down for rest of the yr

Why has the mkt gone up the past 5-10 yrs???...to me the overwhelming evidence points to the american consumer taking on debt and removing money from a grossly inflated housing mkt...money they didnt have...the numbers show credit card debt at historic highs...people took billions of dollars out of their homes with refi's, helocs and etc...this is a fact that cannot be denied...are we really making any more money?...dont think so...so where is all the money coming from?...think about it.

So where is credit right now???...credit is tighter than ever!..while the Feds bring down rates it isnt being translated to the avg american...the banks are keeping the spread...banks are lowering credit card limits and raising rates even for people who pay on time and have excellent credit scores.

I hear pretty much everyday now how professional traders and finance people saying "in the past 30 yrs I have never seen anything like it"...ARS auctions are failing...ARS's have been sold as money mkts...many people cant get their money out of ARS's because the investment banks wont support them...this is very significant....did you know muni's are paying 5.5%??...since there isnt tax implications with munis its like handing out 8-9%!...why would anyone invest in the stock mkt when safe munis are paying this much...even Bill Gross of PIMCO buying up munis right now...cities and states paying huge rates to get money right now..

And I dont have to go into the bond insurers because everyone should know this story...yes if they get downgraded all the munis they have underwritten in the past get downgraded too...what does this do to the cities and states that have to pay more to refinance?...and you really think with the exposure ambac and mbia has with CDO's that they are deserving of a AAA rating that S/P and Moodys just handed out???...that is a joke...what other company whose stock price goes down by 90% in 6 months can you keep a AAA rating?...the govt and financial institutions are artifically elevating these ratings because if they dont, they will take another 50-100B in more writedowns.

And what about the FED...since they dropped .75 and .5 in Jan the mkt is down...the FED is printing fictitious money for wall street and not for you and me...they will do anything to maintain the charade(ie-false growth)...printing more money WILL bring on inflation as we have seen...CPI and PPI are rising very quickly...even Larry Kudlow the Bush cronie is concerned and thats saying something!...how can wheat be up 170% and oil 65% in the past yr without inflation?...((roughly)) in the past 4 yrs, copper up 400%, gold, 300%, corn 300%, soy 300%,,...get the picture???...only thing thats down is products from China ...the govt is printing money and weakening the dollar so fortune 500 and global co's can make more profits due to the weakening dollar from overseas sales...I dont think lowering interest rates will help the avg person...why is it that big successful co's are sitting on billions is cash right now???..they are only buying back their stock, thats saying something...are they developing plants in the US???...nope, they are pouring money into foreign mkts...they are taking jobs out of the US...we are eliminating the middle class in the US and this will ultimately hurt us because imho in order to have sustainable growth in the US we need more and better paying jobs...our fortune 500 co's are taking mid paying jobs away from us...the ones making 150K plus and 30K and less not affected as much...its the 40-80K people getting hurt...why pay a US steel worker 20-30 dollars/hr when someone in china or mexico will do it for 2.00???...look at Ohio as an example...thats why Hillary and Obama want to take another look at NAFTA.

Anyone see the equity of top financial institutions in relation to their exposure to complex derivitives and etc??...they tried to hedge but when the co's that they hedged with have imploded their hedge no longer exists...why else would they sell out to foreigners at such a furious pace?...they are desperate...we are coupled to a housing mkt way beyond we can imagine imho...and people saying that prices havent gone down in my neighborhood are kidding themselves...I live in an area that is 1 of only 4 cities where prices have supposedly have not gone down yet...but there are houses(20 in my neighborhood) that havent sold in 1-2 yrs ..they are marked down 20-25% from the high now...thats reality....the NAR numbers put out by realtors.

But bottom line is this, over past decade, where did the money come from to fuel our economy?..and does this money still exist?...I say no...I think we will have new standards with respect to lending/borrowing, how we handle accounting and risk...I dont think the fincial system will ever be the same imho.

Its funny because from what I remember, fordwill and I were the only ones touting "doom and gloom" 4-5 months ago...we were laughed at at the time...btw, back to DNDN...I was golfing this weekend oh I mean at a prostate meeting .......spoke to DNDN reps for an hr...entertaining...spoke to Petrylak(spelling???) for abit too...more to come when I have time....urologists are funny people thats for sure....





Quote:
Originally Posted by scorcherjf View Post
Large banks and hedge funds have rules and regulations to abide by and of course they'll do anything within their power to maximize wealth to shareholders and/or profits while still conforming to their set of "constraints." If anything, the ones to blame are the government policies, lack of regulation and oversight, and out-dated rules and regulations which are often way too slow at keeping up with current market trends and technologies. It often takes a meltdown or a crisis for them to wake up and finally act and by then it's already too late (i.e. LTCM, tech bubble, quant crisis 07, CDS/MBS crash 08, junk rally 09, and now the EU/PIIGS and China). And yes, individual investors will often bear the brunt of the damage since they're typically slower at acting (they have other jobs usually), don't have as much information (asymmetry), and lack the tools necessary to be as liquid - three things that are required for arbitrage-free and efficient markets.

True, the probability of guessing correctly during bull markets is higher but that's obvious. What separates amateur traders and experienced ones is often their risk management. Sure their success rate is probably similar, but the one who correctly sizes his/her trades will ultimately yield superior performance.

Your views of our government and financial markets really sounds niave... I actually had similar thoughts years ago when I was still a student testing different strategies. Once you actually do some digging and learn how a lot of the financial systems work like the federal reserve's role, the house banking committee, etc. and how they interact with each other you'll probably realize that everyone's not out to "get you" and big brother isn't there just to squash down the little guy. Perhaps one day you'll realize that the other players aren't "cheaters" but merely acting within their capacity - you would probably do the same if you were in their position so try and see things from other perspectives.

About the CPA... that's accounting which isn't exactly finance. Why would you expect them to teach CPA's how the whole banking and financial system works when it's something that's barely even taught in business schools or finance degrees? Do some research and look at what those degrees actually say they attempt to teach you and you'll see that it's mostly quantitative tools which are necessary in the field. It's up to the person to use those tools to learn about what they want after with a more disciplined and objective viewpoint. Their understanding of the banking system may not be any better than yours, and if it is, it's not because of their fancy degree but because they've sat down and reasoned through it rather than dismissing the whole system as a scam.

Anyway, with your charts, "mini cup handles", triangle breakouts, etc. you make pretty common mean reversion predictions. My amateur advice to you would be to scrap those etch-a-sketch drawings on charts and use more solid indicators (credit spread and vol swap rates perhaps) and build a model that you can backtest and verify. My amateur economic advice would be to keep an eye on China. Sure they may have increasing inflation and some local debt issues recently but their growth is insane and it seems to be hard for capitalist americans to comprehend how a controlled government could actually be successful. The U.S. is in a terrible position right now with their public debt, labor unions, and possibly declining into stagnancy. It's a lot easier to fight inflation than deflation... look at Japan's history.
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      07-07-2011, 12:20 PM   #36
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Quote:
Originally Posted by mact3333 View Post
2. you dont think a CPA takes finance classes?......why dont most people in banking understand fractional banking?...why dont they teach how banking works in college?...hmm...so we must learn and dig info like this on our own?...hmmm...odd.
First of all the CPA is a designation in which you just have to pass an exam so no, they don't have "classes" in the usual sense but I'm sure you know this since your wife has one. Also, the finance that they would cover is financial reporting and statement analysis and MAYBE a little corporate finance. The finance classes taught in most quantitative graduate degrees are usually geared around probability theory and arbitrage pricing theory which is a very narrow subject and makes no claims about the economics of the financial system as a whole. Most MBA classes will teach finance from a corporate finance perspective looking at ratios and mergers/takeovers etc. All of these classes don't advertise that they'll teach you how the world of finance works, but rather a set of specific tools for a specific area of finance. Tell me which degree I should have chosen in college which would teach me "how the world works"? Obviously you have to do a little work yourself...

I'm not sure who you talk to in "banking" and whether or not they understand fractional banking isn't up to me to decide but there are MANY different jobs in "banking" and you can't expect all of them to know everything about the financial world. Kudos to you if you know more than a "banker" but to be honest it doesn't take much.

Quote:
Originally Posted by mact3333 View Post
3. you imply I use charts only...dont think so...I was watching CDS and RMBS credit spreads before you were prob working...how do you think I sold most real estate holdings in 06'???...why I went short financials in 08'...I watch it all...I look at M2 and M3(non-published now, I wonder why)...gotta watch money flow into certain stocks and sectors...Elliott Wave, Dow Theory, Effective Volume, Mkt delta....they are all useful to some degree but the key is to synthesize all the info to something useful for yourself...you imply alot of things but you have no idea what I use and how I trade...techn. analysis is only a part of the equation.
Fair enough, you synthesize all that information to use with your trading which is great. I never claimed to know what you used but just reading what you talked about in this thread is all I have to go on which was mini cup handles, triangle breakouts, and VIX breaching bollinger bands and arrows pointing to a couple market minimums which is easy to point out after the fact.

Quote:
Originally Posted by mact3333 View Post
5.with more experience, imho you will respect tech analysis and volume data more...TA and volume data doesnt lie...but people do.
Agreed. I also like to extract information from data and not "people" but after a while you realize that you can't turn everything into numbers and indicators so there's a time and place for both imo. A school won't teach you the proper combination nor how to act on them so it seems like you've figured it out, good for you.
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      07-11-2011, 12:16 PM   #37
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1319 SPX and 1315 ES should mark the bottom for now...TL support at this level...for longer term time frame mkt is unclear right now....bearish below 1326 and bullish above 1342 ES....until we clear 1326 to upside need to be on DEFCON 2 alert hehe.


SLV showing slight relative strength compared to general mkts and GLD showing alot of strength for such a down day...hmmm.
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      07-11-2011, 01:06 PM   #38
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SLV is down 2%...
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      07-11-2011, 01:15 PM   #39
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SLV is down 2%...
should have said it "was" showing relative strength early this am near open but since then it has sold off more than I thought.
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      07-12-2011, 01:21 PM   #40
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pocket pivot buying confirmation on GLD...SLV gonna come for the ride!......mkts want debt ceiling lifted, mkt gets what it wants....

During bull mkts, all news intended to scare people like Italian debt, which is a real problem, to be used for accumulation...Fed better start printing some more money and expanding M3 cause the US has a bill to pay in early Aug, and its gonna get paid or the entire world will collapse no joke...

Until this chart is broken, you should hang onto your physical gold(assuming you have some)...a true bull mkt if I've ever seen one.

http://screencast.com/t/rZRqC29Izb


Only significant risk on short term basis is the crisis in europe...it could pull down the US severely on short term basis so some caution is warranted.

Last edited by mact3333; 07-12-2011 at 02:26 PM.
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      07-12-2011, 11:43 PM   #41
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/YI(silver futures) up big...AGQ/SLV gonna take off tomorrow....expecting USD to nosedive tomorrow...eur/usd should rise.
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      07-13-2011, 09:27 AM   #42
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Yes, my SLV calls are in the money. Need it to hit $37 to break even on my $36 calls though.
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      07-13-2011, 10:02 AM   #43
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Quote:
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Yes, my SLV calls are in the money. Need it to hit $37 to break even on my $36 calls though.
SLV and GLD was diverging for past week...as noted yesterday, SLV will come along for the ride....

SLV gapped up above the 50dma and volume heavy...pocket pivot in place now.

Bernanke my idiotic hero said QE3 back on the table...God Bless this puppet....

Last edited by mact3333; 07-13-2011 at 10:09 AM.
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      07-13-2011, 06:01 PM   #44
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Fed Reserve: Hey Moody's, why dont ya scare the shit out of people and put the US on neg watch for fun and drive down futures and the mkts for awhile...that will pressure the Congress into raising the debt ceiling and give us the green light to do QE3.

And the hamster wheel keeps a spinnin....
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