I have a long range Money Flow T in place for the Euro showing a top date in the second week of February (see blue lines).
However, the hourly MFT on the US Dollar shows a top on December 20:
Taking a look at the dollar chart, you'll notice that stocks are trading inversely to the dollar. I expect dollar weakness to continue into next week, and then reverse into dollar strength heading into the 20th. After that, the bigger daily Euro MFT should take over, and the dollar should decline into early February as the Euro rises.
Accordingly, whatever selling climax we get in equities should not last past December 20. After it's over, I expect equities (and gold) to shine through January.
This is confirmed by the volatility Money Flow T, which shows a final low in early February (black lines).
An early February final top for stocks would be important in terms of the four year cycle that Terry spoke of, referring to Orville's work. The four year cycle is a low to high to low cycle. If the 4 year cycle started at the early March 2009 low, then we can expect the next low in March of 2013. The cycle will be interpreted as bearish if the high comes before the halfway point (March 2011). The cycle will be interpreted as bullish if the high comes after March 2011.
So if the high comes in early February, then the cycle will be considered bearish (if March 2009 is the correct start date) and we should expect the lows of March 2013 to be lower than the lows of March of 2009.
Note, however, that there is not universal agreement on when the four year cycle should start. Some would argue that the four year cycle began at the November 2008 low, which would make a February top date considered bullish, not bearish.
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my current thought is early feb top may not be final top and we may get final top towards may end.
ReplyDeletebut it seems your Ts are also suggesting higher prices into next year so may be its safe to buy december dip?
Yash
ReplyDeleteAs Terry has said, the selling climax in December should present an excellent buying opportunity.
So now we are going to go higher after T13 expired just like it happened in that past and you had pointed that out already. either it will be T14 or no T but much higher prices. do you have target? I am still takeing this as ABC from march low. A april top B july low so C=0.62A at minimum. makes it somewhere 1350.
ReplyDeletealso as per few good cycle analyst I follow 1173 itself may have been excellent buying opposrtunity. and december selling climax may not take it much below that.
ReplyDeleteYash
ReplyDeleteAs I pointed out earlier, the T #13 was an Advance/Decline T. Only the A/D T's are numbered. What I think you are expecting, and what Terry has been showing in his Short Term charts is a Price T, or as he sometimes calls them, Oscillator T's. There will be no number assigned to the new price T, which is expected to be a Bearish type T. Bearish T's will normally demonstrate strength coming out of the center post, but the end of the T normally sees the price fall away or collapse. It is probably a mistake to look for a price peak at the end of this soon-to-be-created Bearish Price T.
Bill
Bill
Bill,
ReplyDeleteThanks for clarifying that for us relative newbies.
Norm
Bill.. I agree to your point but Terry had this spilt double bottom T (I think price T in terminilogy) which ended at nov peak. Was that bullish T or berish T when it was defined? I don't remember now. I am finding it difficult to understand which is berish price T and which is bullish price T and reasons for it but may its just me. Last almost 1 yr Terry was saying after T13 expires, everything after that is kind of berish Ts (price Ts) but I am not finding it that way so my questions.
ReplyDeleteParker
ReplyDeleteNot sure where you have heard Terry said Dec low is an excellent buying opportunity and I certainly didn't get that impression from the audio updates Terry did over the last few weeks. I am under the impression that Terry still maintains that we would be having a bearish vol oscillator T, meaning the price would rise initially after the centre post low (or nulled echo low) but then fall away as a bearish T (not that Terry's forecast of short range bearish or bullish Ts are any accurate if one looks at that the number of bearish T's that have failed to materialise since May low - i.e., bearish T turning into bullish T instead or no T at all).
If we do get a Feb/Mar 11 recovery high, then we can kiss the Magic T-Theory goodbye for all practical purpose. The whole idea with long range ADT is that after the end of the current T, we should see a declining top. Now given where we are at (from my calculations, ADT having having already surpassed Nov high using intraday advance decline data I have), a new recovery high unless composed of an extremely narrow base (the current rally has been led by small caps in the Russell and Nasdaq, causing ADT to go to all time high) will not have a declining top.
CSW
CSW
ReplyDeleteI thought Terry said the mid-December low would be a crisis opportunity to buy.
Maybe I misheard him.
I show a daily UUP top around Dec 27.
ReplyDeleteclose enough to Dec 20.
http://practicalt.blogspot.com/2010/11/nov-end-uup.html
Yash
ReplyDeleteThe T shown in the most recent short range T is a price T, with a double bottom (first of July and end of August. It is unnumbered, and I don't recall that he ever characterized it. The next price T, which he currently expects to form in mid December he thinks will be a Bearish T. I frankly do not remember the rules for recognizing a new price T as Bearish or Bullish. All A/D T's Bullish.
Parker, yes Terry did say in one of his most recent 2 posts, that December decline should set up a good buying opportunity.
As for the accuracy of the T Theory, please recognize that the A/D T's have an incredible record of being accurate.. I have watched his projections since the early '80's, and I don't recall an error. And just to be clear, Terry identified the Bull market rally from the March low in early April, and at that time, also projected a top in the Spring of 2010.
As the months passed, he refined that projection, with comments pointing to the problems with T's that form out of double bottoms. He was very clear that there would be a momentum peak in April, with a final top in Late May.
I was a seller all through the month of March and April, so that by the time the momentum top occurred in late April, my investors were out. IN fact, my momentum indicators generated a Sell 4/26, which it turns our coincided with the momentum top Terry had projected last year.
My investors took substantial profits, and that money is parked in VFITX. Now my traders have been having a lot of fun, and many of my investors keep a small portion of capital available for short term trading, and they are having a ball. But the investment money is parked.
I have offered earlier on this blog that Terry's price T's are generally better than most trading strategies, but they are not perfect as we have come to expect his A/d T's to be. It has been clear for a long time that the double bottom A/D #13 was acting strangely, and he has been trying to make sense of it. He will, I guarantee, identify the next major Bull market. he has already indicated that for investors, the March 2009 rally is done. If a few more points are added in the next few months, it does not invalidate his observations.
After all, any long term investing success is defined by not taking losses, and Terry is still the best at that. If you are looking for the T theory to solve all the short term trading problems, you are looking in the wrong place.
Bill .. your last post is nailed it. Basically its saying that from 666 T theory gave you 1225 now further 100 or so it may not give but then it will save you from loss that is going to come after that further 100 points. So in nutshell, I think for remaining upside if any using T theory (Terry's) is not really must. It may give upside correctly, it may not.
ReplyDeleteMay be we should wait to see how the Dec6-8 top works out before using the same tools to pick the next buying opportunity? No?
ReplyDeleteJust thinking out loud here.
Thanks for the chart, Gold Gerb!
ReplyDeleteT's work in freely traded markets. There is some comment on the net that the Fed pumped in $15 Bn via the Crash Protecton Team and bounced up this market. Shots had to cover etc. etc.
ReplyDeleteSo the technical stuff may be corect but is being manipulated. Yes, that's a lot of conspiracy theory to believe - but we just found out the Fed pumped Trillions in lots of companies back in 2008-09 so its not stranger than fiction either
CSW said:
ReplyDelete..."at the end of the current T, we should see a declining top..."
Sums up my perspective of what Laundry has said over the years, but I find it very difficult to decipher what he has been saying over the last six months...as a "whole". I have my doubts he really knows himself.
Lakewood, that's my issue as well. I have no problem with price making a new high so long the cumulative Advance Decline doesn't. However, given how the current rally has panned out, we are sure to take out the Nov high in Cum Adv Dec line and Nov top took out the May top Cum Adv Dec line. This goes everything against the Magic T theory requiring declining tops for a new ADT. It may very well be the manipulation we have had that is causing this. If it is, then we need to evaluate T-Theory in today's imperfect world where central banks are bailing everyone out, rather than coming up with new reasons why we have to keep extending T-13 everytime we see another leg-up.
ReplyDeleteCSW, Lakewood, and the rest
ReplyDeleteI don't believe anyone who has followed T theory for any length of time does not recognize there are currently problems "observing" the market. If I remember Terry comments correctly, he is merely reporting his observations of market behavior, using his Time Symmetry theory to understand the market behavior.
I don't want to be an apologist for the recent difficulties Terry has had understanding the market recent behavior.....but I will in spite of my reluctance. Let me say first that I have personally witnessed some of the changes he has made over the years as he has formulated his rules for time symmetry. Just look at his recent addition of Money Flow T's that Parker has discovered. Terry will again have his observations in line.
But many of you are ignoring a First Principle of investing.. "do not take losses", trying to capture each and every up tick and down tick in the market. Please don't confuse accuracy in a long term observation with a need to be accurate in a short term environment.
(continued in next post)
Continued,
ReplyDeleteTerry made the Bull market call in early April, 099, and the market took off from the March low. At that time, he was observing a T that would carry into the Spring of 09. As the months passed, he made refinements to that observation. He was detailing the difficulties of accurately understanding T that form in a double bottom, and talked about "Nulled Echo". etc.
He was clear that because of the double bottom, the would be various possible top dates. He began to formalize those dates as Late May, followed by a Summer decline, followed by a August price top. He also was talking about momentum peaks in April as a result of the double bottom, and the nulled top that could occur in Dec.
As an experienced investor, my attention aws focused on the April momentum peak, and I was selling all through late March and by late April, my investors were out. My trading program, based on momentum changes, produced a sell date on 4/26/2010.
Since April, the market has been all over the place, and Terry has been a little confused. I agree. But what did he miss? The market still has not bested the Spring highs. The market declined in the Summer, and rallied in the late Summer.
Terry had gotten his investors out, just as I had, and parked them in safe place, and began focusing on Gold. I mean, really, why all the angst and confusion about his short term observation? While his long term observations are superior to any other timing device that I have seen, his short term observations have never much better than above average.
Let me make this pledge.. "I guarantee he will identify the next Bull Market" in plenty of time for investors to make another big profit. IN the meantime, the are better short term strategies.....and T theory should be used in conjunction with a trading strategy based on different rules. The first of which should be "Capital loss is a greater risk than lost opportunity"
Best to your trading!
Bill
I full agree with Bill. Since ADT 13 is expreied now, there should not be more depandance on Terry's T than any other method. Some day ADT line will come down again .. say 2012-2014 or so and then ADT 14 will emerge. Till then its just lucky short term treding.
ReplyDeleteThanks Bill!
ReplyDeleteTwo things stood out in my mind.
ReplyDelete1. Terry and Buzzy do not use T theory to go short.
2. Terry doesn't even invest/trade his own stock market calls.
What do those tell you?
I am not putting the blame on Terry as he shares his work free.
Thing is, he speaks with such authority. He would say it will happen this way or that way b/c he has seen it so many gazillion times in his decades of observation. So, it makes you feel that who are you to disagree with someone who invented a whole investment theory that produced Buzzy the superstar, who has been doing this almost longer than you have lived?
2010 is when I started listening to Terry's narrative. In jan, my system detected a decline. Terry said nah... it will stop at the mid line. Well the market went through that in a heart beat, and started to bounce back. I got a buy signal. Terry said nah... the lower boundary will now be the resistance and then there is the midchannel line blocking it. Well the market went through both and went all the way to May. When the market broke in May, Terry said nah.. no biggie cuz it would turn around at any time and go to July-August high. I bailed out of my shorts instead of riding it as my system indicated. Then he started panicking b/c his confidence indicator collapsed and he put out that "The end is here" proclaimation" and the wrong way corrigan taunt.
At that point, I had enough of it and stopped visitng his site. Hence I missed his August top debacle. I made 95% riding the September rally.
I didnt suffer losses by listening to Terry. But I missed out on opportunities b/c of it. I am not blaming him. It is not his fault. He is forecasting and all forecasting models are inherently flawed.
These days, i only glance at the mega T pics weekly but do not listen to his narrative. I found a different way to interpret the Fagix and it works better than the Fagix confidence indicator. just use the Fagix as is. Don't mix in the treasuries.
I state again, it is not terry's fault. When you predict or forecast, then there is ALWAYS, i stress ALWAYS, an error factor. It is foolhardly to proclaim that your model has no error. There are too many parameters exerting different degree of influence on the market at different time. It is impossible for any predictive model to capture all of them. There will be errors. There will be blood.
I know there will be people inclined to give a lecture on the need to trade your own system and the need for risk management. That is not what my post is about. This is about the inherent flaws in predictive models.
I think I have followed Terry as long as BillH, if not longer. Beside the point anyhow.
ReplyDeleteSimply put, Terry's thing is his 'Best Bond Strategy". He uses the Magic T to make the switch. It is far from a perfect tool, but it is useful in thinking through alternative market possibilities.
Keep a reasonable perspective.
SC,
ReplyDeleteIf your model is more superior as you indicated, maybe you can show us your next few predictions. Then time can tell all of us which one is the winner.
I didn't say my models use prediction. Mindful of the pitfall of the errors inherent in predictive models, I chose not to use any forecast/prediction, and go with a strict trend following methodology. When you predict, you often end up arguing with the market.
ReplyDeleteI went short via SPY DEC 190/140 put spread on 11/15. Closed that out on 11/30 for a gain of 38%. I also closed a position in BGZ on 11/30 for 4.5% gain.
I purchased the SPY Jan 200/150 putspread on 12/01. My system is showing a mega divergence, which occurs preceding major market decline (1987, 2000, 2007) and it is detecting a minor divergeance currently being formed. When this melt-up is done, I will add more short positions with gusto. My action will be guided by the patterns shown in the indicators I use.
One step at a time, with all the necessary risk management and position sizing factors taken into consideration.
Hope that helps to shed some light on the issues.
Not here to win approval or recognition. Not here to piss on you neither.