Developing a New Trading Psychology
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- By trade, I am a successful trial lawyer. I managed my own investments, loved it, and now trade for a living.
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I am not sure what is this post as I am not able to see anything. But I wanted to ask few quesitons on Terry's sunday updates. I know its best to ask Terry but since you are next person close to his work, I thought of asking you first if you don't mind.
ReplyDelete1. null echo dec low - what is expected after this. I see last null echo and it seems there was decent rally after null echo but not going to higher high of previous T12. So is that same expected here? The cycle man (two of them Jim Curry and Andre Gratian) both have higher high sometime in 2011 march-may timeframe. Timewise that may be still right for rally after Terry's null echo but I thought Terry's current Ts won't allow for higher highs. Is that correct?
And if it happens to go higher high how that is to be understood with T13? (or you won't anwer this one till it goes higher high after null echo?)
2. On TGLDX Ts .... what do you think about RSIs Ts. I have around march-may 2011 as significant top. So just like RSI 1, this one tops just before the end.
Not so sure Bernanke is the problem, although the Central Bank is certainly PART of the problem. The problem is lack of understanding of how a government that is using a fiat currency should tax and how it should spend. We have a fiat currency in the US, it was made official when Nixon took us off the gold standard. It's possible that someday we MIGHT go back on a gold or silver standard, but not likely. Until then, government spending and government taxing SHOULD be approached with completely different rules and guidelines than when the country had a currency backed by gold. And NO ONE--not the politicians, nor the bankers, nor investors, traders, business people, working men and women--NO ONE understands this, nor do they understand what those new rules or guidelines should be. The whole "deficit" issue is a red herring as is "balancing the budget". What is relevant is our capacity to produce goods and services. The federal governments spending and their taxing should be geared towards maximizing that capacity.
ReplyDeleteThis, SEVEN DEADLY INNOCENT FRAUDS OF ECONOMIC POLICY, explains it much better than I can:
http://moslerforsenate.com/wp-content/uploads/2010/06/7DIF.pdf
Yash
ReplyDeleteAfter the expected nulled echo low, I expect a relief rally of some sort perhaps morphing into a trading range. We'll have to see how it plays out.
Those RSI (momentum) Ts are interesting on TGLDX. I would prefer to wait and see what a Money Flow T might show before I made a forecast that far in advance. Generally speaking, Terry has spoken of an early December high for gold, and then a June 2011 peak. I think he's probably on the mark.
So if T13 and null echo concept is correct then we won't see higher highs than of this week in 2011 .. right? becuase that contradicts with above two cycle mans. And I am not saying who is right who is wrong. Just trying to understand two almost opposite views. (those cycle mans have at least around 1320 or so as top next year)
ReplyDeleteThanks Pima. Very interesting.
ReplyDeleteWe are about to debate the Bush tax cuts which are worth about $70B per year, and Bernanke imposes an inflation tax of $600B in the stroke of a pen with no oversight???
Talk about taxation without representation.
The real problem is that rising input costs cannot be passed on to a consumer that is saving more or out of work. So all QE2 will do is squeeze profit margins, exacerbating the unemployment problem. The cycle will feed on itself, as it did in the late 1970s.
As I noted elsewhere, the Fed will own 18% of all the treasuries after QE2, more than China and Japan combined. At what level of Fed ownership does the dollar lose its reserve currency status? 25%? 33%? 50%? Seems like we are playing a very dangerous game. If the dollar is replaced as a reserve currency, we are royally screwed as a nation.
Yash
ReplyDeleteIf you go back and look at all the Ts from 1966, some of them lasted a very short period of time.
Conceivably, T14 could last a matter of months and result in a higher high than T13 sometime in 2011. So Terry's work may not be inconsistent with Curry and Gratian. We'll have to wait and see how it plays out.
Oh got it. So its posisble T14 develops and ends in shorter time period creating major top in 2011. I never knew this one as I thought Terry would have started on potential T14 by now. But may be his long new bear T becomes T14 that produces higher highs in 2011. With current time symmetry it seems 6 months on left with null echo in mid dec .. makes mid june on right side. There are dates like may 17, may 26 for 2011 top (aramstong cycles ..that has april 25 date and missed 1 day) so then all will come together.
ReplyDeleteSeems like the dollar being replaced as the world's reserve currency is another red herring.
ReplyDeleteThe Yen is not the world's reserve currency and have the Japanese suffered as a result of that fact? How about the Euro? Are Europeans royally screwed as a result of the Euro not being the world's reserve currency? I just don't see the connection.
That's not to say that inflation concerns are not unfounded. But short term charts of commodities don't really tell us whether we will have inflation down the road or not. We certainly have the perception among traders that inflation will be a problem and it's that perception that is driving up commodity prices. But only time will tell whether those traders will end up being correct longer term or not.
Parker, Yash
ReplyDeleteI don't think Magic T theory is anywhere near projecting a new A/D #14. The T #13 that is finishing is an QA/D T.. ....and the market has to deliver a period of declining A/D numbers to set up a new A/D T #14.
What Terry was showing this past Sunday was a potential price T, generated by the Volume oscillator, and he suggests that it will be a Bearish T. Bearish price T's do not produce new highs.. they will produce a nice uptrend coming right after the new price T forms, but then collapses toward the end.
Terry has never,at least since I have followed him for the past nearly 30 years, projected price. His price channels are clearly short term.....he may make a guess here and there about where a market price may be reached, but that is not his metier.
Bill
My interpretation of Laundry is similar to BillH.
ReplyDeleteThe only REAL question I think anyone should have at this point is whether or not the FED's massive and continued intervention has completely changed the market.
If so, it is entirely possble T Theory is no longer applicable.
May I know where can I find Terry's sunday updates?
ReplyDeleteBosco
ReplyDeletehttp://ttheory.typepad.com/
I found a paper called 1997 Introduction to T Theory from the T Theory Foundation website. May I ask whether this is the latest beginner reading to understand T Theory? Would you recommend any other reading materials to study this subject?
ReplyDeletehttp://www.ttheoryfoundation.org/files/a1997introttheory_.pdf
I know the T Theory Foundation website contains some materials already but am curious to read additional materials.
Thank you very much!
Regards,
Bosco
Bosco
ReplyDeleteThat's a good introduction.
Also, if you go to the regular T Theory website, you'll see where Terry has a list of topics at the bottom where he has archived old posts discussing those topics. That's a good way to learn too.