Nice call.

It's the top on the 30th of this month. The S&P is gonna crash. Gold will hit $1003.40. A taxi will hit a pedestrian in New York.

Everyone gone?

check CKEI for bottom !

The rise in Small Cap stock prices continued to push that area of the market with a higher than normal Speculation measure.



Note that large cap stocks remain moderate in their speculation range even as the small caps are heading into the stratusphere.

My guess is that we'll see some rolling of the small cap holdings toward the more moderately speculated large caps. Let's call this a capitalization rotation rather than a sector rotation.

Best regards, Tom

Hi V, I have some indicators that I use for gauging market turns. I've been collecting data since 1982 and the composite of these indicators had been pretty good at calling the turns so far.

The current information shows moderate but rising risk.


It also did a very nice job of showing an over-inflated market heading into 2000 and never bothered to signal Low Risk until after the WTC attacks.


The low risk signals were well timed and strong enough to be believeable.

If you'd like to see more on the history and the components, please take a look at
http://www.aim-users.com/iw.htm

and here's my current take on the components:
http://www.aim-users.com/3bbs.htm

I've been reading all the back posts here. This looks like it could develop into a great thread. Thanks for starting it.

Best regards, Tom

I almost forgot above that post.I don't think Vesselin is around.

Regards

Marc

re fixed vix target numbers

A long time ago when I was first writing the code for the mvp signal system, a cs poster named thequeenfool pointed out to me that the vix can and does change operating ranges. Causing a large problem to anyone waiting for a fixed number target.

While there are surely many ways to skin that cat, the method which worked for me was 200 day lookbacks of vix relative position in range.

Anyone interested in an example of this can see it in the free but very obsolete version of mvp that I distribute just to show people its not smoke and mirrors. The lookback code is in it.

Just looking around here for other system ideas. I think I've taken mine as far as I can, code-wise. Details below
Current system status is in cash, from latest sell, which was 11/19/04
Bearing in mind only 2004 is real time, real money, over all system results thru start of bactest to today is
36.1% annualized over the 8.6 year time period.
10k to 140K in 8.6. years (doens't include taxes or commission)
61 trades , 18 of which were losers
Current version is 21F.
Results as stated are from using mdy, profunds enhanced funds would be much more.
8.6 year backtest is done with the exact same code and triggers, no changes anywhere thruout the entire time frame.

System makes trades that last from weeks to months, mainly and they are based on interrelated extremes in vix, put call, mclellan ratios etc. 2 observations I'd like to stress:

1. I know most folks here are shooting for much more return than 36% annual but I was just looking to substantially outgun a real good mutual fund.

2. This system would bore a real trader to tears or worse, its like watching paint dry.

my site can be googled as mvp signal system

Regards, Steve

Good Morning Vesslin. I'm currently up to version 21F, having encountered and corrected many mistakes. Most of them came in realtime experience. The program took a strong leap forward when I built in logic to allow it to change its mind if it bought too soon or sold too early.

Just looking around here for other system ideas. I think I've taken mine as far as I can, code-wise. Details below
Current system status is in cash, from latest sell, which was 11/19/04
Bearing in mind only 2004 is real time, real money, over all system results thru start of bactest to today is
36.1% annualized over the 8.6 year time period.
10k to 140K in 8.6. years (doens't include taxes or commission)
61 trades , 18 of which were losers
Current version is 21F.
Results as stated are from using mdy, profunds enhanced funds would be much more.
8.6 year backtest is done with the exact same code and triggers, no changes anywhere thruout the entire time frame.

System makes trades that last from weeks to months, mainly and they are based on interrelated extremes in vix, put call, mclellan ratios etc. 2 observations I'd like to stress:

1. I know most folks here are shooting for much more return than 36% annual but I was just looking to substantially outgun a real good mutual fund.

2. This system would bore a real trader to tears or worse, its like watching paint dry.

my site can be googled as mvp signal system

Regards, Steve

Short Term Indicators vs. the SMH; any index can be used - The first set of short term indicators I use are based on the put to call ratio. To go long it is best to wait for the put to call ratio to close over 1.0. On the chart below the put to call ratio now updates intraday but it is not always accurate! Intraday reading of the put to call ratio can be found here updated every half hour after the open:

http://www.cboe.com/MktData/default.asp

The more days in a row the put to call ratio prints over 1.0 this the more likely the bottom will be a strong one. The link above shows intraday readings of the P/C ratio.

Also closes on the put to call ratio below 0.50 and sometimes a bit above are indicative of a short term top. Watch the simple moving averages as well because periods of too much buying of puts or calls will almost certainly bring about market bottoms and tops respectively. On the CPC/VIX ratio; this is largely a longer term indicator where investors are likely to make more money on the long side once the short-term 21 day sma has crossed above the 200 day sma. The reverse is true as well. An investor will likely make more money on the short side when the 21 day sma crosses below the 200 day sma:

&r=4730>

>

Next I use the VIX and VXO can help to refine decision making on tops and bottoms upon reverses from upper or lower Bollinger Bands especially when the index stretches more than 10% above or below its 10 day simple moving average.

>
>
>

Also TRIN and TRINQ readings on the 5 and 10 day simple moving averages over 1.5 are bullish while readings below 0.85 are bearish. These readings don't happen often especially with the 10 day sma. They are also early indicators so the market can continue higher or lower for a while but they are reliable for indicating market turns that are about to take place.

>
&r=9586>
>

Finally some intermediate indicators that are highly effective for market timing using the NASDAQ New Highs and similar indexes are shown here. To go long: First wait for the NASDAQ New Highs to set a new low and reverse itself from an approach of the lower Bollinger Band. To go short: Wait for the NASDAQ new highs and other similar new high indices to set a new high print at, near, or above the upper Bollinger Band. I am also now using the NASDAQ McClellan Oscillator (Ratio Adjusted) ($NAMO) to confirm the above - Overbought above 25 - Oversold below -25. These charts do not update until after market close.



&r=0943>

For the most part these charts should only be used for short term market timing!

Also I recommend consulting Les Horowitz's data at Silicon Investor on this thread:

http://www.siliconinvestor.com/stocktalk/subject.gsp?subjectid=25738

RtS

Any opinions: Which indicator will first announce the bottom of this correction? What do you watch now to indicate the return of the bull market rally? (If there will be a return to the rally)

I'm wondering if the monthly charts might be worth comparing:

[j20196741,y]&r=6196>
[J23933271,Y]>
[J23933272,Y]>
[j20196741,y]&r=6196>
[J23933273,Y]>
[J23933274,Y]>
[j20196741,y]&r=6196>

Thanx; I marked your board..will be over tomorrow..

Sure you can post a chart, go here to learn how, http://www.investorshub.com/boards/board.asp?board_id=1277

But you say you want to post your own chart! You do it the same way but you have to put your chart up on a web server first. The odds are high that when you signed on with your ISP, they said that you could have so much storage space for a personal web page. They usually give 5 Meg's of space which is plenty of room. If you run out just get rid of the old charts.

Thanks for the reply..
I haven't posted much on IHUB, but I really like taht , I don't even know
if I could post a chart, ( or how to embed one ).
I have not signed up for the premium service so I may not be
able to do charts, even if I found out how.
Jim

He didn't link to a static chart on the web. His link calls for a chart from a charting service (in this case, Stockcharts).

The service builds the chart fresh every time the image is called.

Again these charts are updating; Hot dog !!!

I love the charts in this post, & I see was posted dated back in 2002, yet the charts
are up to date..how does IHUB do that ?
Jim

You won't lose money if the index doesn't move at all (as opposed to moving but eventually returning to its starting value) - but that never happens.

Are you sure about this?
I believe it with the 100% funds but not the 200% ones.

If the 200% ones use shorts plus options then the decay will eat away at those options if it just stays falt.

If 200% is not options I would think a margin call could happen.

Help-

Admired your work for some time
Mish

Hi PS,
The chart is from a free poster named Footquarter and it looks for breakouts of the Bollinger bands, upper or lower, as potential buy and sell signals. I will try and offer a better answer over the weekend if I have some time.
Good Luck PS! :^)

Could you please explain your chart for us less informed. Thanx

A chart from Footquarters

Thank You Hiker I will go there! Have a great day and weekend!

CHR, considering that Vesselin has not posted here in some time, I would not be too hopeful of a response.

However, he has more recently updated his charts at the URL below. Your questions might get a response there (and they may have already been addressed in one or the other discussions there).

Good luck!

http://www.capitalstool.com/forums/index.php?s=1b04613538d83a5ea9deb96e64897e32&act=ST&f=13&...

Thank You Vesselin for all your great and helpful information. A couple questions for you if you do not mind:

1) Last night I read something you wrote on Parabolic SAR indicators but I cannot find it today. Can you direct me?

2) Do you think we are nearing a top in the QQQ's?

3) Re: QQQs I have switched my thinking to shor-term up, or long as I noticed today

A) We bounced off the lower (20,2) Bollinger bands

B) Using the parbolic SAR indicator, we have a dot under today's price which I belive indicates a buy, or long.

C) The MACD (60 min & 30 min) which I watch on a 20 day chart) has turned positive, also indicating a buy.

Can you give some input? I am a short-term trader using puts and calls on the QQQs and am a bit at offs with other volatility indicators seeming to indicate a top soon.

Thank you

CHR

(Stands for Cheerful, Happy and Relaxed--Something my father told me to try to be at all times, if possible, for long life)

ps,

I think of indicators as either "trend" (following) or "contra-trend" (overbought/oversold). Most indicators have both attributes, it just depends on how you use them.

Contra-trend indicators give the earliest indication of a possible trend reversal. One of my favorites the A/D Ratio selling climax. Volatility indexes such as VIX and VIN are also excellent at spotting reversals early on.

Trend following indicators can also be coupled with short-term OB/OS indicators to find turning points. For example, whenever the Summation index or BPI reach overbought or oversold levels, you can use Bollinger Bands to fine-tune your actual entry and exit points.

Check out my Nasdaq model for examples - I track several intermediate indicators.

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID368318

http://www.indexpulse.com/index.html

It looks like we are heading toward another intermediate term bottom. What indicators are most reliable? And which are most likely to turn first? Do early indicators need to be confirmed? I would appreciate any thoughts.

Excellent post Vesselin. I'm trying to get the % bullish charts for other sectors like banking, tobacco and pharmaceutical. Just wondering if you could post them up - or email me at bodyboard888@hotmail.com
thanks

Vesselin take a look at these settings for stochastics
Seems to do pretty well

http://stockcharts.com/def/servlet/SC.web?c=$SPX,uu[w,a]waclyyay[df][pb50!b200][vc60][iUb14!Lh10,10,...

Thanks

M

think everyone is still hungover know i am

where is everybody?

cool tune

We're ALL HERE! Where are YOU???

You are cordially invited to attend a FIVE DAY celebration of the season.

It's called "Caroling with Carolyn and The Gang at The Corner Bar !!!!"

Here is the link that you need to use to join in the FUN AND FESTIVITIES !!!!.....

http://www.investorshub.com/boards/board.asp?board_id=413

Squeeze on in and grab a stool!

The Holiday has JUST BEGUN!

FIVE FUN FILLED HOLIDAYS OF singing along to Christmas Tunes in a "CHEERS" type setting.

Friends you want to be with!

Merriment for EVERYONE!

We have it ALL!

Here is the LINK....

http://www.investorshub.com/boards/board.asp?board_id=413

[Suppressed Sound Link]

Thanks for the explanation on the BPCOMPX.

I think IBD has a similar indicator but it looks at stocks above and below its 200dma. I've seen this go much higher to 70%-80%, even as it covers the entire market.

I would add that if this rally has been mostly about mutual funds chasing beta for year-end performance, that may be why BPNDX has reached the top of its range faster than bpcompq or bpspx. The non-tech components of the bpcompq and bpspx have caused them to lag a bit, imo.

NDX has 100 issues. S&P500 has 500 issues. COMPX has over 3200 listings and is therefore a broader market than either of the SPX or the NDX.

As well, both the SPX and the NDX are large cap indexes, while the COMPX will have mid-caps and small caps in it as well.

50% of stocks on any broad-based index to have PnF buy signals is quite a bullish move, and in general has indicated a top is forming during this bear market.

GT

P.S. $BPSPX is for the S&P500, $BPOEX for the S&P100 and others for the smaller-cap indexes.

Great question. I'd like to know the answer also.

Vesselin,

Your charts look great. Curious, why does BPCOMPX only get in the 50s on the highs and BPSPX and BPNDX can get to 70-80 area?

Thanks,
Ketan

Thanks, Vesselin.

Do you remember what the entry and exit parameters were?

-Chris

The rest of the indicators

I would like to write scripts for the rest of the simple indicators you had on that chart. Can you tell me what they were?

I think this was the chart I used (at least the one that had RSI(5) on it):



Regards,
Vesselin

Hi Vesselin,

Thanks for posting the link to the Wealth Lab site.

I have been working on a chartscript for the RSI 5 buy-below-30-sell-above-50 indicator, like on the simple indicator chart that you had on your public Stockcharts list.

I would like to write scripts for the rest of the simple indicators you had on that chart. Can you tell me what they were?

TIA

-Chris

Tom ,
Thanks for the charts and explaination.I will continue to follow your index.

Best Regards

For those interested, I've just added posts to the ZEEV's IDEAS Board (#board-1351). They include more on the Transmeta analysis and an excellent piece by Vesselin.

Fred

I prefer to use a 10 MA of VIX with Bollinger Bands - for two reasons: 1) The daily readings are too volatile for my taste and 2) There are many more good signals too be had even when the daily readings don't go to such lofty levels as 48. Look at both charts and I think you'll agree.



>

Tom,

Thanks for the post .I will be keeping an eye on your index and follow the dialog between you and Vesselin.I used to be more of a positiontrader but now find myself being more of a swing trader changing my positions 1-3 times a week.The last 4 days I have been 100% long in UOPIX for a 37.5% gain I went back to money markets at the end of today and if we have a down day tomorrow as I expect I will be back in the long position for probably 2 days.I primarily follow the slow stochastics on a daily and hourly basis and base my decisions on these charts.What are your thoughts on the VIX closing at> 48.0 as an intermediate buy signal?

Good Trades

Positiontrader

I began taking aggressive long positions in late July as my contra-trend indicators fired numerous bullish signals - see charts. The way my model is constructed, the contra-trend indicators lose points (an average of one point every two weeks) as time passes. By late August, my trend indicators never turned bullish. My model is constructed in such a way that the trend indicators usually takeover (turn bullish) as the contra-trend indicators fade to neutral. By September, my model was mildly bearish and my exposure to stocks was down to 50%. Last Wednesday, my contra-trend indicators started to fire bullish signals again.

As you can see, my model never goes from 100% long to 100% cash (or short) in a day, or even a week. The last intermediate cycle was fast, but not unusual for a bear market. I'm not a short term trader, but I listen to my model. Right now, I'm 100% long. That may seem to be a bit ballsy, but I trust the reliability of my indicators - I've spent a lot of time developing them.

In the end, I believe it pays to be aggressive at bottoms but to ease off rapidly if trend indicators don't follow suit. I'll be watching Big Trend and the NH/NL Ratio closely during the next few weeks. If they don't turn bullish soon, I'll be selling off chunks of my portfolio again.

Tom,

Thanks for your post.This is a very interesting concept that I will have to look at more carefully.When did your intermediate index indicate that you should be in the long position?How often do you normally change your positions?

I have learned not to use one indicator alone.My only exception to this rule has been when the VIX closes at >48.0 I will go to long position for at least one day and normally longer.An example was last Wed.I then follow the daily slow stochastics to see if it is turning upward.Such was the case last Thursday .I am currently in the long position but will probably move to money markets at the close tomorrow.

Good trades

Tom--Thanks--PEACE

Painful lessons

Thought I'd add my two-cents to your post.

I think I agree with your first point, but might have a slightly different interpretation. Did you mean 'never follow a single indicator'? If so, I agree. I'm an advocate of timing models - using several indicators to develop a market outlook. My NYSE intermediate model is here:

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID350373

"The trend is your friend". True, but not at market extremes. You'll note that my model includes trend/breadth indicators AND contra-trend indicators. The idea is this: Follow the trend until a critical number of reliable reversal indicators tell you differently.

"Be neither a bull or a bear but a trader and be prepared to go either way". Amen, I totally agree.

"Follow the moving averages...." My advice is this: Develop a model that's ACTIONABLE. I get chuckle whenever I go through the Stockmarket.com public list. I see dozens of pages with trendlines, chart patterns, Elliott waves, oscillators, etc. Most of these pages are history lessons, but don't tell me a damn thing about what I should be doing tommorrow.

Do their indicators mean they're bullish? bearish? a little bearish? a little bullish? Does it mean they're 20% short or 100% long? If indicators aren't quantifiable and ACTIONABLE, don't even waste your time.