Kind Words from Terry Laundry, Founder of T Theory

"Parker has sent me what I consider to be the most important refinements to T Theory I have ever received from anyone in an e-mail . . . which he calls Tweaking the 13th Advance Decline T." September 29, 2010

"Parker has sent me a very interesting concept which is the NY Advance Decline line divided by the put-call ratio . . . What he's done is introduce the idea of sentiment." September 15, 2010

"Parker discovered the Money Flow Ts . . . This is something like the Holy Grail in T Theory. You are always looking for something that will help you refine the peak date." October 17, 201

"Money Flow Ts are probably the greatest new thing I have seen in 20 years in terms of time symmetries." December 5, 2010.

Saturday, February 5, 2011

$$ Sunday Update

Terry Laundry has posted my Sunday update at TTheory.com This week, I examine the 14-week cycle in stocks as well as various Money Flow Ts that suggest a mid-February change coming. 
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13 comments:

  1. UnknownFebruary 5, 2011 at 6:52 PM

    Hi Parker,

    Thanks for your work.

    Could I just confirm that you are implying that the gold price will start to fall around mid to late February?

    Sorry for the lame question. :-)

    ReplyDelete
  2. PositionSizingFebruary 5, 2011 at 8:59 PM

    Hi Sterling,

    I think Gold will correct, perhaps to the 1225-1250 range. Old tops become support, and we have some old tops in that range. Plus, the 60-week moving average has historically served as support, and it's already at 1233.

    After the correction, I would not be surprised to see gold have another bull run into ~May. Seasonally, gold often makes important tops in the Spring. See March 2008, May 2006.

    ReplyDelete
  3. BillHFebruary 6, 2011 at 11:30 AM

    Parker

    I have been playing around with your MFI T for the VXX and I can not for the life of me make any sense of how you created the T.. I do not see the center post at a location I recognize as low in the MFI, nor do I see how the beginning date is selected as a top.

    Can you help me understand?

    Bill

    ReplyDelete
  4. waw4February 6, 2011 at 3:35 PM

    Hey Parker,
    I have the same question as BillH - would you explain how you drew the VXX MFI? Thanks.

    ReplyDelete
  5. PositionSizingFebruary 6, 2011 at 3:35 PM

    Hi Bill

    It's a 30 minute chart. E-mail sent.

    ReplyDelete
  6. BillHFebruary 6, 2011 at 3:59 PM

    Uh, Parker


    I saw the 30 minute frame.. but I still can't see how the rules you suggested for the reverse MFI T can account for how the T has been constructed.

    Bill

    ReplyDelete
  7. PositionSizingFebruary 6, 2011 at 4:09 PM

    The MFI very clearly made a spike low on ~Jan 19. From there, VXX made a lower low the week of Jan 24, but the MFI made a higher low. Thus the ~Jan 19 spike low is the center post.

    ReplyDelete
  8. UnknownFebruary 6, 2011 at 10:08 PM

    Hi Parker,

    Can you explain why Terry no longer is identifying a new T being formed by the secondary cash buildup phase (32 trading days)that began in mid December? If it is legit, it would expire around mid March, a time when he is expecting an importing low.

    Tim

    ReplyDelete
  9. JackFebruary 6, 2011 at 11:19 PM

    rfsignals,

    You are not supposed to notice:-)

    The low is set by the cycle so his challenge was to find a "T" that fits the time frame. The new small red T does not use the previous T logic. Same can be said for the strange looking Inter T #3.

    They both seem more placed by the need a mid Feb and May end date than any established T-placement logic.

    Parker does the same, overlooks the inconvenient Nov 16 low and chooses the late Nov low to give the "mid Feb top".

    I love Terry and he is much more right than wrong for a long time now so I ignore the inconsistencies.

    In this case he decided the primary force is the cycle low.

    ReplyDelete
  10. PositionSizingFebruary 6, 2011 at 11:21 PM

    Hi rfsignals

    I have not spoken to Terry about your question, but I can guess.

    We are expecting a cycle low (#8) in March, and Intermediate T#3 to end in May.

    So if the secondary cash build up phase that started in December has a center post in early March, it too would project a top in late May.

    In other words, he hasn't drawn a center post yet on the 32 day secondary cash build up.

    ReplyDelete
  11. PositionSizingFebruary 6, 2011 at 11:27 PM

    Hi Jack

    I have not overlooked the Nov 16 low. I mentioned it a couple times in the past weeks as an alternative way to draw the T.

    Generally speaking, you prefer to start a Money Flow T when a trend clearly changes from down to up or vice versa. However, when a trend starts out of a consolidation phase, it's not so clean and there can be alternative starting points.

    I chose to write about a mid-February change in sentiment on Sunday because there's a lot of signs pointing to it.

    ReplyDelete
  12. usacoderFebruary 7, 2011 at 6:36 AM

    Parker,

    Thank you for your continuing postings on MF T's and explaining how they may work.

    Terry Laundry uses VUSTX - Vanguard's US Long Bond Fund as a tracking criteria for his "Best Bond" strategy. Since a MFI can't be created for funds I was wondering if the ETF symbol BLV, Vanguard Long-Term Bond Index, can be used to in-place of the bond fund and therefore be used to generate a MF T for VUSTX?

    ReplyDelete
  13. PositionSizingFebruary 7, 2011 at 7:27 AM

    Hi usacoder,

    That's a good thought re: BLV. We use TLT as a substitute for VUSTX for Money Flow T purposes.

    TLT and BLV track pretty well, but TLT has the advantage of much greater volume, making the Money Flow Index (a volume based indicator) more reliable.

    ReplyDelete

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