This will be the first in a series of posts as we close out 2010 on lessons we have learned this year. I have a few topics in mind. Feel free to make suggestions.
Where to Start Long Range Advance Decline Ts
Instead of starting the Advance Decline T (ADT) at the ultimate peak in the NYAD line, I proposed starting ADTs in the middle of the first bearish divergence between the NYAD peak and the S&P.
With respect to T12, this start date (May 27, 1998) produced accurate forecasts of:
1) The Feb 2007 top when using the Oct 2002 low as a center post,
2) The July 2007 top when splitting the Oct 2002 and March 2003 lows as a center post, and
3) The Dec 2007 top when using the March 2003 low as a center post.
With respect to T13, the split divergence start date (June 22, 2007) produced accurate forecasts of:
1) The late April 2010 top when using the Nov 2008 low as a center post
2) The early Nov 2010 top when using the March 2009 low as a center post
For a recent post with charts showing the split divergence start dates for T12 and T13, please see:
For further/more detailed reference, please see the following videos:
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Posts
I have read the T-Theory material for a few years but never became a student. For 25+ years i have been a student of EW, Gann, SC, astro cycles, and fixed time cycles, all of which work very well for a while, then fade like the morning fog only to give way to another "system".
ReplyDeleteI continued to try position trading based on one or more of the various indicators only to wake up and have a HUGE move against my position orders no doubt placed by forces 1000's of miles away and having much more BP than me.
So i went back to the basics, with a SMA 3, -1 and and EMA 5 crossover, balanced with a MACD histogram and a 3 period RSI for seeing divergences and extremes to give a setup for a tend reversal, whether its on an hourly, daily or weekly basis.
My feeling was that the market (any traded market) is like a sandwich: 15% bread on top and bottom, and 70% goodies in the middle. the 70% goodies is my goal, forget the top and bottom.
based on the indicators, the hourly, daily and weekly are on a buy, but losing strength and a sell is coming soon, IMO.
HAPPY HOLIDAYS TO ALL.
Mr Maximus
ReplyDeleteI guess for the first time in my life, you could call me a Ditto Head. I have never been a Ditto Head.. a Parrot Head for sure, but not a Ditto Head.
Like you, and like Parker, and I am sure many others, I have been at this for a long, long time. I have found that making money in the market is relatively easy.. . .it is keeping it that is so difficult.
I have a very long history with T theory, and his long term outlook has been very accurate.. but his shorter term observations have been problematic, perhaps better than the average TA, but then so are most trading strategies. (like the kids in Lake Woebegon who are all above average!)
I have had what might be called a mixed experience with the market.. as a trader or investor. and frankly, I did not begin to have long term success until I finally learned that long term financial success was dependent on Not Losing Money, rather on Making Money. I learned that Capital Loss was real, while Opportunity Loss was just an imaginary number in a mathematical equation.
I spent many years on the Sell Side... and almost every investor I ever met was a trader who had made a mistake. But that trader instinct finally began to work for me when I finally became ready to admit a mistake quickly, rather than trying to prove I was right.
And for me, All I want to do is identify the Momentum trend.. and watch for it to change. I first began to look for momentum changes when I began to use the displaced MA that you suggested above, and developed a momentum strategy that included 12 other measures of momentum.
I have only had 1 mistake this year, which cost me a 3/4 of a point before getting stopped out. That was in Oct when the momentum sell signal did not work out.
I feel that the T theory will again become valuable when we can identify a trending market... but in the mean time, this is truly a traders market, and I don't think any of the tried and true TA strategies looking for longer term buy or sell levels are working. Look at how long the EW guys have been looking for a top that has not arrived.
So, Yeah Baby!... Momentum Changes are the answer, until something better comes along.
Let's get more corned beef in that sandwich, and much thinner slices of bread.
Bill
Short term market timing is a contradiction in terms. Leave it to the losers - don't be one.
ReplyDeleteMr Hook
ReplyDeleteThanks for sharing!
Makes me want to reconsider the last 45 years of market history...
S&P in July, 1998 at 1168
S&P in Feb 2004 at 1170
S&P in Oct, 20008 at 1170
S&P in Dec, 2010 at 1230
So how well is that long term investing, buy and hold working out for you?
Adjusted for inflation, the DOW is trading at levels equal to 1966
How well is that working out for anyone?
Just say'n!
Bill
Stick to the bigger T's is my point. You are preaching to the choir on the long term.
ReplyDeleteI can't get my $nyad to appear on a chart the way Parker's chart appears. Here's my chart:
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=SPY&p=D&b=9&g=0&id=p40525519895
Where am I going wrong?
joe
Joe
ReplyDeleteUnder "Style" choose "Cumulative"
Thanks, Parker. I had tried cumulative but on the entire chart, the spy included. I didn't know I could do it separately for the indicator, $NYAD, but I found the option after seeing your suggestion. Thanks much.
ReplyDeletejoe
ClaudiusMaximus
ReplyDeleteTanks for sharing! Just one question:
I am confused by the "-1" in your post
"SMA 3, -1 and and EMA 5 crossover, balanced with a MACD histogram and a 3 period RSI"
I assume it is a typo, correct?