Timing Market Turns-2006 Update
Thursday, January 19, 2006
Market Timing for Traders:
Traders should be short.
Investors should still be in cash equivalents
As I stated at my Elite Trader Journal yesterday morning, the upward turn would bounce into today. The downward move should resume tomorrow and end on Monday the 23rd of January.
Don't be fooled by what seemed a "strong" rally. We had commented that S&P 500(SPX) 1283 to 1285 as a "profit taking level."
Further, at 1:11p.m. EST, I posted here to take profits just before the day's high at 1287.
The downward recovery of new swing lows into Monday might get volatile with SPX 1260-67 as the primary level for reversal. Perhaps even lower toward the 1230 level if 1260 is decisively broken.
Good trading and God bless
W. B. Busin
P.S. Intraday postings will continue at Elite Trader, if allowed. I don't mind if you share these postings with others. It might help them at some point.
I have started two blogs to see which is easiest to post to at Blogger and Yahoo. They will be the same exact material, mostly the general outlook for people uninterested in day trading. It arises from a friend's comment that searching through the day trading postings was unpleasant.
It seems Blogger allows posting by email which might allow more of a 1 click type posting. Yahoo seems mighty limited.
I'll eventually drop one when I have a comfort level satisfactory to my ways.
For Day Traders:
http://www.elitetrader.com/vb/showt...6&pagenumber=24
For Investor and Swing Traders:
http://timing-market-turns.blogspot.com/
http://blog.360.yahoo.com/blog-VlOf.dImeaSWYAkdvlEY
http://blog.worldvillage.com/busine...al_markets.html
Thursday, January 19, 2006
Timing Market Turns-2006 Update
Timing Market Turns - 01/18/2006
Market Timing for Traders and Investors
I was asked about books and trading by a young chap at the Elite Trader forum where I post a journal of my observations, if time allows.
Here is my response to him today below and at http://www.elitetrader.com/vb/showthread.php?s=&postid=955600#post955600
Quote from bgp:
W.B. I AM WORKING ON TRADING THE E-MINI S&P ON A 5 MIN. AND 60MIN. CHART. I HAVE ALWAYS BEEN INTERESTED IN TIMING . YOUR TIMING IS VERY ACCURATE .
BARRY
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Hello bgp
You mentioned books before.
I believe I have mentioned some in a previous post here. I can't find the post with a speedy look through.
Edwards and Magee book - learn the technical language and tool basics
John Murphy's books
Bill Williams book on Chaos
Linda Raschke's book
Neely on Elliott Wave for how markets are structured - not for trading EW ( Prechter's book is ok)
Futures Magazine
Active Trader Magazine
Stocks & Commodities magazine
Market Technician Association's Journal
The goal of every trader and investor should be to find something that yields winning trades at least 50% of the time in real live trading. Back testing is helpful, but it's as if you were learning to milk a Guernsey by reading a manual. Your pail is still empty. And, your knowledge is still untested.
That 'something' may indeed work in real time, but it may not work for you and your mental state/personality/self discipline/self confidence etc. This is a bloody business, not for the faint, the sheepish or the underfunded.
Before you master technical analysis, you must become proficient at, and then, a master of "risk management and bet size". Knowing all the TA blarney won't make you successful at trading. Only risk management will keep you "alive" as a trader or as an investor.
Only 3-5% of traders survive - some of those make a living at it. They are fully capitalized, know how to bet, know when to not trade, know how to take profits, and know how to take losses.
Off hand, I'd say this is a deadly pitched battle between the smart money and their band of green clad hitmen versus the rest of the universe. The smart money wins 90% of their bets due to staying power, the size of the bets and hedging power.
They accept small percentage gifts from the market every day. Would you take a profit if the emini moved up half of a dollar? They do every day, dozens of times with 50 to 600 contracts.
It's not easy and most of the time it isn't fun. This is a solo business, in an amoral industry where nobody cares about how you are doing. That's the reality. Few people will know whether you blow up or make lots of money - unless you write a book about how you lost or made money.
I know many good traders. Not one trades like another, even if they use the same "system". So, you must venture out on your own and expect to stay that way, even if you make friends in places like this forum.
You should also incorporate yourself, do your own bookkeeping and tax submissions, and learn the tax focus on traders.
To my mind, trading is gambling. Period. There's a much marketed slogan here in NV, "What happens in Vegas, stays in Vegas!" Similarly in trading and in Vegas, the real facts are more often this: The money you bring to Vegas and the money you bring to the market, stay in the market.
Broke is normal for Vegas visitors leaving, and broke is normal for traders, eventually.
That is why I always try to end my posts with
Good trading and God bless
W. B. Busin
http://www.elitetrader.com/vb/showthread.php?s=&postid=955600#post955600
Wednesday, January 18, 2006
Timing Market Turns - Down To The Minute
Timing Market Turns for Investors and Traders
01-11-06 09:39 PM
(excerpted from earlier posts at http://www.elitetrader.com/vb/showthread.php?s=&threadid=56450&perpage=6&pagenumber=22)
The data is being run on the last several days. I am assuming that we will exit our positions in the Dow, SPX and NDX instruments. We will most likely establish smaller short swing positions in them to catch some of the correction into that January 23rd date.
I'll confirm here in the morning after the open.
We have posited a target of SPX 1285 and then 1310 and 1351 for resistance, and for taking profits. The correction could be rather shallow or a good smashing. Upon the event of a break and close above 1310 by at least 10 points, we will reverse our positions, or simply go to all cash.
We will have a few levels for the timing locus on the 23rd.
We see the SPX (and SPY) price and volume giving better timing loci lately, but the Dow and NDX show a better structural picture.
Sentiment is also at quite bullish levels. It seems prudent to leave a few crumbs in the basket now.
Good Trading and God bless
W. B. Busin
___________________________
01-12-06 07:05 AM
Market Timing for Traders-
We have reversed our swing positions at the open to a short position.
Market Timing for Investors-
We have taken profits and are in cash for the core positions in the Dow 30, S&P 500, Nasdaq 100.
The swing positions are expected to last for most of the correction into the time locus of January 23rd.
Good Trading and God bless
W. B. Busin
01-12-06 10:56 PM
Market Timing and Correction Price Levels
We promised to share support levels when we called for a market turn at the time locus for Wednesday/Thursday.
This turn has gotten along quite smartly, hasn't it?
We do show another minor (but rising) locus on Wednesday or early Thursday (we will update that locus as time passes).
Support for the Standard and Poor's 500 Index, as follows:
1267
1260
1230-32
1218
1188
As I posted above, the SPX is yielding better signals. Watch The Dow and NDX for structural completion when the SPX reaches nearby these levels.
We favour a view that holds the 1260 level, but structure and volume patterns will shine a bit of light on this as we move into the monthly option expiration cycle.
Sentiment remains bullish, so it might be allowed that we have a hearty downward swing at hand.
Have a nice Dr. King day off!
Good Trading and God bless.
W. B. Busin
01-17-06 11:01 PM
Market Timing for Wednesday 01/18/2006
Traders may want to take some profits today and then near the close or Thursday's open, re-establish short positions.
We remain short in our swing positions for the SPX, Dow 30 and Nasdaq 100. We will hold through any minor rally today and Thursday.
Investors should remain in cash. Monday, January 23rd will most likely be an excellent time locus turn for buying.
Traders- if the move upward does not start from the opening action, look for the counter trend rally to start in the above mentioned range on the SPX at 1260-1267 level. As I write this the Emini futures are down about 12 points and the Dow mini is down about 90 points.
Two points to add-
The VIX is just up at weak resistance. It can and will be much higher tomorrow unless the Globex rallies significantly.
Lastly, the same scenario exists for the sentiment measures and ratios. They are still indicating persistence in the bullish camp (meaning they are rarely correct). Any rally today will only encourage them even more.
Media is offering "reasons" for the downward move - Iran, Iraq, North Korea, scandal in Congress, Sharon's stroke, bombing in Pakistan - I have likely omitted some blamed event.
Repeat after me - "THIS IS A CORRECTION."
We have been in an upward mode for 3 months. It was time for a rest.
Stay short or in cash. Cash is marvelous.
Good Trading and God bless.
W. B. Busin
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W. B. Busin posts his views and market turn dates at two public sites. You can find his more general views of the market at http://blog.worldvillage.com/business/cat_financial_markets.html , and, as travels and time permits, his intraday timing loci for day traders posted to his journal at the Elite Trader web site, http://www.elitetrader.com/vb/showthread.php?s=7079fb0b20867133d90092aa21fa0119&threadid=56450&perpage=6&pagenumber=22 Both are titled “Timing Market Turns”.
Timing Market Turns
A Brief History of the U.S. Stock Markets Through April 2006
Monday, January 9, 2006
Most of 2006 will be a downward tilting year, as will much of 2007. Forward looking into any new year can be dicey for an investor or trader. We see several significant changes coming.
We hope this small effort at determining dates for Major Market Turns helps you to plan for these events by building expectations in your mind of potential changes. Below, we proffer our opinion of the coming Market Turns.
For those awaiting the next big crash, your patience and hopes will be tried and crushed. For those expecting a glorious race to new all time highs throughout all the broad indexes, your exhilaration will be tempered by a sharp reversal from new all time highs in the Dow Jones 30 Industrials and the New York Stock Exchange Index (already at new highs). The Standard & Poor’s 500 Index will not make it to a new all time high this year. The Nasdaq Composite Index and the Nasdaq 100 Index will soon end their modest upward move.
Since the lows in October 2002, the broad market indexes have rallied relentlessly for most of these 39 months. This upward move will soon end. These first months of 2006, we believe investors should be unwinding positions, taking profits and going to cash or to interest rate sensitive models. We assume most investors won’t be shorting stocks or indexes. Perhaps investors will use the various inverse mutual funds that allow for gains in this coming correction beginning soon.
Index and stock traders are sure to have an abundant year of opportunities for making huge profits from the volatile swings we foresee. Yes, volatility swings will be byword for 2006, as are most market corrections.
Let’s begin with a caveat or what some people will wonder about, “where we are coming from.” Long term, we are bullish on the U.S. markets, the indomitable U.S. economy, and the American people.
As many of our readers know, the dates and times (intraday) that our proprietary algorithms yield are independent of our bias for what these dates will manifest, a low or a high. Our view that October 21st and/or October 24th would mark the low to buy did come true even though it wasn’t the exact low, which occurred on October 12th. Those familiar with market structures ending like that, such as Elliott Wave Theory, will understand a bit better (though we aren’t wave theorists). We expect similar endings for indexes this spring. That is, some will make new highs and reverse from there while others will fail to make final highs. Those failures to surpass recent highs are ideal locus points for exiting bullish positions and establishing a bearish stance. Essentially, these are the safest places in time to sell short the indexes.
The dates to watch are as follows: January 23, March 13 and April 11. More swing dates are interspersed between those, but have not risen through the rigorous algorithms to show themselves as significant enough to mention yet.
Our bias, at this time, for what these dates should manifest shows the final high on April 11th as the high to sell. The January 23rd date should mark the end of a move. Our view is that it will be a high, IF a minor time locus date, Wednesday, January 11th, strikes a low of a fast correction beginning today, Monday, January 9th.
On the other hand, if the indexes continue their upward move into Wednesday and Thursday, then we would change our bias to the January 23rd date to arrive as a low. This date’s result further colours our bias for the March 13th date, even though we tentatively expect it to be a high.
We will update as time passes on the sites listed below.
_______________________________________
W. B. Busin posts his views and market turn dates at two public sites. You can find his more general views of the market at http://blog.worldvillage.com/business/cat_financial_markets.html , and, as travels and time permits, his intraday timing loci for day traders posted to his journal at the Elite Trader web site, http://www.elitetrader.com/vb/showthread.php?s=7079fb0b20867133d90092aa21fa0119&threadid=56450&perpage=6&pagenumber=21 Both are titled “Timing Market Turns”.