Interesting Links

[Billy]

Please use this thread for posting interesting links with your comments.
I am seldom attracted by sheer links without at least some summary of its content.

Let's start with the new blog of EV member Maxime Austruy who generously shared his pivot spreadsheet with us.
References about the spreadsheet are detailed in his June 13 blog post.
The June 14 blog post about index pattern matching and predictions is most interesting and was already introduced to us by Maxime in the old VIT Google Group. I personally use this approach more as a long term risk-reward gauge from the projected trading ranges than as a leading forecasting tool. Only a sturdy backtest of past projections compared to reality could provide confidence in such projections.
Please make your comments directly on Maxime's Blog: http://small-trades.blogspot.com/
Billy

[Andrei]

Bloomberg Smart Money Flow Index.

Note how it went up from 6/17/2011.

http://www.bloomberg.com/apps/quote?ticker=SMART:IND


[Update]

Smart Money Flow Index

Description:

The Smart Money Flow Index was developed by WallStreetCourier in 1997 and is a trademark of WallStreetCourier.com. Since then WallStreetCourier is the official source of the Smart Money Flow Index for Bloomberg Professional.

The Smart Money Flow Index is calculated by taking the action of the Dow in two time periods: the first 30 minutes and the close. The first 30 minutes represent emotional buying, driven by greed and fear of the crowd based on good and bad news. There is also a lot of buying on market orders and short covering at the opening. Smart money waits until the end and they very often test the market before by shorting heavily just to see how the market reacts.

Then they move in the big way. These heavy hitters also have the best possible information available to them and they do have the edge on all the other market participants. Whenever the Dow makes a high which is not confirmed by the SMI there is trouble ahead or the other way round.
Indicator Details

Updated: • daily/weekly

Signals:

Bullish: If the Dow Jones Industrial Average declines which is not confirmed by the Smart Money
Flow Index

Bearish: If the Dow Jones Industrial Average advances and the Smart Money Flow Index is lagging behind


source:http://www.wallstreetcourier.com/v/c...flow-index.htm

P.S I think (I may be wrong) that there is a similar index either at MarketTells, or at some different site, where flow is being derived by taking 2 different times of a day and doing some calculations. However I don't remember if index there is more longer-term or similar in nature.

[ericoleman]

I used to be a member of the Stockbee blog and Pradeep posts some very good information about trading and investing. Additionally, there are many worthwhile essays on various methods. I would still be a member, but I am intentionally limiting myself from too many external sources of information. Nonetheless, I find the site to be extremely valuable and highly recommend reading many of the free posts.

http://stockbee.blogspot.com/

[Adriano]

The rare elements theme has been quite hot in the recent months. It now seems that deep-sea mud in the Pacific Ocean has lots of them. I wonder what the extraction costs would be.
http://www.nature.com/ngeo/journal/v.../ngeo1185.html

[nickola.pazderic]

When and if the market turns and breaks the 200 DMA, I wonder where and when the Robot will indicate a prime point to enter/jump on.

In the meantime, one might enjoy this simple comparison of 2011 and 2007.

[Billy]

When and if the market turns and breaks the 200 DMA, I wonder where and when the Robot will indicate a prime point to enter/jump on.

In the meantime, one might enjoy this simple comparison of 2011 and 2007.

Nickola,

2007 is not included in the best fit analoguous patterns from history.
The top-5 best-fit similar patterns are all pointing up.
http://www.etfrewind.com/members/Ponzo.png

Our friend Maxime is also doing an excellent job in this field of research.
Zero Hedge are perma-bears, keep that in mind when reading anything from them.
Billy

http://www.etfrewind.com/members/Ponzo.png

[nickola.pazderic]

I need the feedback very much.

[Billy]

Nickola, the updated link now gives much more credit to your initial posting.
The 2007 scenario is now the second best fit historical pattern and is indeed weighing very negatively on the projected average scenario compared to last week.

http://www.etfrewind.com/members/Ponzo.png

I've been following the weekly updates of this most analogous chart from its inception and my subjective feeling is that it is often more a lagging indicator than a leading one. As long as we don't have a backtesting of past projections, it is difficult to draw any conclusions. Maxime is trying to do some backtesting with his own tools.
Anyway, projecting any market from only one year pattern like Zero Hedge did is certainly a flawed concept.
Billy

[nickola.pazderic]

Billy,

I'm very impressed with the analytical minds and training of some of the people here, including Pascal, Paul and you. The complexity is typical of engineers. And it is precisely this type of thinking that makes HGSI and Pascal's book difficult for me. This is not to say I have not taken my math and advanced logic classes and aced the crucial tests. I have. Given a choice, however, I'll see the world as a specialist in qualitative methods.

All my qualitative methods are set against the background of history and geopolitics (probably one reason I like Zero Hedge). As I noted to EB in a seperate exchange, I don't talk politics, culture or religion since I became a speculator. This makes it a little difficult to express my judgments because they can be so easily misconstrued.

That said, I'll make a bold and ugly political statement: the market and the entire edifice on which it stands depends heavily on American military power and its projection. Conservatives know this at least implicitly. And so-called liberals are embarassed by it but must accept it. President Obama understands this point, as did Clinton and every other president in recent memory. There have been no doves in the White House.

From the conquering of the American West to the non war in Lybia, there has not been a time when the USA is not at war somewhere defending its national interests. This fact may not be taught in American high school history books, but, trust me, people in Asia-- especially China-- know it well. Power comes at the end of a gun, as Mao put it. And every Chinese knows this, too.

So what is my point? Consider this fact, courtesy of ZH (but ultimately from Stratfor, a subscription service to which I subscribe):

Stratfor demonstrates, the CVN 77 G.H.W. Bush has just entered the Persian Gulf, the first time a US aircraft carrier has passed through the Straits of Hormuz in months. What is also notable is that the LHD 5 Bataan amphibious warfare ship has just weighed anchor right next to Libya: this is odd since the coast of Tripoli had been left unattended for many weeks by US attack ships. And topping it all off is that a third aircraft carrier, the CVN 73, is sailing west from the South China seas, potentially with a target next to CVN 76 Ronald Reagan which is the second carrier in the Straits of Hormuz area

Whoever controls oil, controls the global economy. Can anyone really disagree with this? (I bet some can, and I dread escalations of political aruments). In any case, a lot of power is lined up in that part of the world. By doing so, the president and the military are tacitly supporting a strong American economy and stock market. They know the biggest drag on GDP comes via high oil prices. Moreover, leaders in the USA know that Americans depend on a rising stock market for the retirement and that a poorly performing market will also prove a dead weight on American GDP growth. To me these facts are almost self evident. They are the background against which all current movements must be considered.

In other words, while all the noise inside the market and inside the media is sending confusing signals, the basic message remains: America and its allies are in control. As long as that is the case, the bias of the markets will be sideways to up.

In the meantime, we bit players will continue to make our meal money on volatility and trends, which will occur within ranges. If a carrier ever gets taken out, then all bets are off.

[ilonaross]

http://www.bloomberg.com/news/2011-0...d-default.html