Today’s all-time intraday high on the S&P 500 reminded me of a correlation I had looked at in the past.
I re-charted it just now and frankly, the implications are fairly profound.[Read more…]
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Here’s where you think I’ve gone crazy.
This post is half in jest…but it’s also serious.
So I came across this pattern on several charts a few months ago over in my trading room one late night, and I posted it…in jest. But I keep seeing it so I figured I’d write a quick post on it.
I’ve noticed that any Chaikin Oscillator that is shaped like the back of the Buffalo Bills’ logo end up with a stock popping.
It works on several timeframes. Don’t believe me?
My point is this.
It isn’t to add the buffalo bills logo to your charting tool-kit.
The point is that there’s all sorts of indicators, and what works for you works for you. Personally, I see people post charts with 10 indicators and I mentally implode. There’s patterns everywhere that work until they don’t.
There is no indicator with 100% accuracy. Most people use the same study settings that everyone else does…which gives the algos a hell of an advantage.
So don’t go chasing after the king indicator; there isn’t one. Even Renaissance Technologies sees drawdown. And their returns are disgusting.
Renaissance’s flagship Medallion fund, which is run mostly for fund employees “is famed for one of the best records in investing history, returning more than 35 percent annualized over a 20-year span” From 1994 through mid-2014 it averaged a 71.8% annual return. (Source).https://www.wikiwand.com/en/Renaissance_Technologies
There’s nothing wrong with indicators, but be
I just came across this cartoon on Reddit. It’s from The Economist and I thought it was a good enough explanation of panic selling that it was worth sharing.
Figuring out a way to get your signal to noise ratio under control is an essential thing for profitable traders, as well as investors. Whether it be from the financial press, the options market or any other element that guides you in your buying and selling.
As I have quoted on my StockTwits profile is a line from Mr. Buffet.
“I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful.”Warren Buffet
Here’s the cartoon.
Elon Isn’t Going To Jail
Analyzing the Narrative
I remember the day fairly well (I am long $TSLA equity as well as call options).
The first big Tesla news of the day was an article released by the Financial Times that stated that the Saudi Sovereign Wealth fund had “acquired a significant position” in the stock“.
I averaged some
Then Elon put the stock in Falcon-X mode when he tweeted on his official Twitter account that he was considering taking the company private at $420 a share
….then came the opening interpretations.
The first thing I thought that made sense started being reported on CNBC three hours after I made this post. Even a good friend called it far-fetched on StockTwits (I see you Flo!)
Then we get a
As some of you might know, I run a trading room. I have a great time with the community we as a team have grown it into so far.
Some of my time with my team is spent pointing out unusual options activity that I like.
But most of my time is spent answering questions about my own trading methodology because they seem to work pretty well. My answer is always that this is what works for me. If something else is working for you and shows you things more clearly than my set-ups do then there’s no need for you to switch.
Then I explain it to them anyway.
Back to the story at hand. The see-saw markets we’ve been seeing recently, the escalating trade war tension…it has people trying to catch wild swings, or end up losing on a ‘sure thing’ because the indices were weighing down the stock.[Read more…]
News broke yesterday that Taiwan Semiconductor ($TSM) had a slowdown in production due to a virus.
Bloomberg had a nice doom and gloom headlined article, entitled “Computer Virus Cripples iPhone Chipmaker TSMC Plants“.
However, if you read the article, the first subheader reads…
“Some factories back to normal, rest in another day, TSMC says.”
Those two statements sound pretty different. The next subheader says that $TSM says that the virus wasn’t caused by a hacker.
Neither statement might be true. But…
I linked to my brief first candle indicator stuff a few minutes ago in my room and on ST/TWTR.
It’s an intra-day trading term that I made up one day after eventually noticing a pattern.
The law is essentially this…typically the first and last candles of the day have the highest volume.
There are several reasons for that, but typically its the big retail brokerages filling their clients’ orders.
For our purposes today that doesn’t matter whatsoever. Today, I just wanted to share another real-time version of it.
I told you there was a podcast coming!
Well, this isn’t quite a podcast, to be honest. It was supposed to be a quick market recap. But then some of my listeners started asking some question.
So the general outline is…
A few members of my trading room [ join us here ] have asked about how I choose my entry points for futures. So I decided to make a very short video to show them, and anyone else out there how I do it.
The indicators on the chart are the Chaikin Oscillator and On Balance Volume.
And yes…that’s a 1-minute chart. I have an article to write about that, but for now I’ll repeat what I said in the video….if the algos are reading the millisecond tape I think I’m entitled to a one-minute outlook.