FAQ - 1, 2, 3, 4 updated

EDIT: 1620 EST - re-published to keep it on top of the list of editable posts here. I will add to it this weekend.

I will continue to add to this as the week progresses.

1. What is a locus or loci?

locus

SYLLABICATION: lo·cus
NOUN: Inflected forms: pl. lo·ci (-s, -k, -k)
1. A locality; a place. 2. A center or focus of great activity or intense concentration: the cunning exploitation of loci of power; the insulation from normal American society (Clifton Fadiman). 3. Mathematics The set or configuration of all points whose coordinates satisfy a single equation or one or more algebraic conditions. 4. The position that a given gene occupies on a chromosome.
ETYMOLOGY: Latin.

Whether singular, locus, or plural, loci, these represent identified points in time for a change of direction. In small increment timeframes, the amount of time of that change may be as short as 1 or 2 bars. This is visible during fast movements downward or upward. It is a pause. Nevertheless, these pauses are essential to creating the structure needed to track the movement's progress unto its end.

Locus timing points or time locus points are the same thing. They are times of expected turns or changes. They are computed using algorithms. They are proprietary and we don't discuss them. The direction is a subjective decision made by us and based on technical analysis components.

A daily market turn or time locus, such as the April 11th or the recent March 13th and March 28th, are derived by algoritms nearly identical to the ones used to find turns in the one minute timeframe.

2. What is a Swing trade/trader and what is an Investor/Investor core?
Swing trades can last for a day or for days. They can last longer too. Investor/investor core is a longer horizon for profitability of weeks or months. We use absolute stops. That means when they are hit the stop level, we execute the trade.

In the weeks past, we have traded both position types together because of the unstable structure for the longer timeframe. When long term tops are forming across the broad indexes, each index begins behaving much differently from another. They adopt different structures and volume patterns.

3. Are the signals end of day or intraday?

All signals are formally announced here at this time. They are executed at the open or at the close. The reason for this very limiting type of trade execution is due to TimerTrac's (the independent group that tracks hundreds of timing signals - www.timertrac.com) can only handle those two types of signals. That does reduce a signals ROI and risk to return rate, but that is plainly the way TimerTrac has arranged to care for the massive number of signals.

Added for clarity - Today, 4/07/2006, was a good example of this. When SPX 1298 was touched, I went to the TimerTrac's (TT) site and entered the sell order for all the index positions which re-established a 100% cash position for all of the TT signals (a signal is what TimerTrac calls a change in status of a trading system). On their 'books', our trade was given today's closing price of each index, even though we entered it during the trading day.

We trade 6 signals with them, two for each index. One signal is for a swing trade and the other is for an investment trade. Swing trades can last from 3 to 20 days in a trending movement. Investment trades can last much longer.

Recent weeks have been very choppy and volatile as I stated they would be several times here. The real volatility begins next week. Some new traders might want to look at the volatility in 2000 and 2001 for a primer on how fleet footed a trader must be. The last few weeks is the appetizer for some real downward swings and upward rebounds. You might think of the recent action as being stalled in traffic and the coming action as being thrown into a Formula 1 racecar at 200 miles per hour.

On the other hand, during the trading day, yesterday when the SPX was moving upward rather quickly in the afternoon session, I mentioned that day traders would take profits at or near the highs. We are not yet prepared to call the intraday swings everyday. Everyone gets confused. Occasionally we will mention the potential scalp or a very short term set up. The choice of what to do with that information will always be the readers.

4. Do you have any predictions for the housing market?

The residential housing (existing and new construction) market is a critical part of the economy. Interest rates have an impact on this market. It trends and reverses trend with as interest rates reflect changes in inflation. It also is affected by demand and supply. The irony is found when looking at a 'hot' market. Fifty miles from the 'hot' market could be a cold market, that is, an entirely different real estate climate.

With that serious caveat, the housing market has dropped by some measures, i.e., prices and inventory turnover, along with days on the market for existing homes. I see that continuing but flattening through most of the year. Next year may prove a more somber time for sellers and builders. That is always a good opportunity for buyers, especially first time buyers.

Depending on your buy/sell needs, I would sell now and I would buy late next year or early 2008. In 2008, distress sales will be common again.

W. B. Busin