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PositiveDev's trading journey


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Also sold my GDX and GDXJ positions today for decent profit, due to my account being closed shortly I have to close all my positions (by 22nd August). I would have kept them otherwise since these were intended as long term positions. I'll need to put them back on via another broker.

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Screenshot2011-08-12at180007.png

 

Gold topped on 20th Feb 2009, 2 weeks before the stock market bottomed.

 

 

I just checked my proprietary DBDT indicator and it gave a buy signal on GDX by the close of trade on 10th August. That's quite interesting for me since historically my indicator has been reasonably accurate with GDX.

 

GDX buy signal 10th August;

Screenshot2011-08-12at182327.png

 

 

GDX 1 year;

Screenshot2011-08-12at182345.png

 

 

 

Also a buy signal on XAU (Gold/Silver index)

Screenshot2011-08-12at190505.png

 

 

If gold remains at elevated levels and crude remains suppressed then I would certainly think there is a strong chance of a very large upward breakout for the gold miners.

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Another chart option;

 

http://www.prorealtime.com

 

This again, is free, you just need to register and it's web based, using Java again. You only get end of day data for free. It's fast, suggesting it's well written, and it seems quite user friendly. Some nice features such as automated draw of trend-lines, you can also compare performance of various underlyings on one chart (that's what I need).

 

Apple;

Screenshot2011-08-14at090710.png

 

 

 

E-Mini NASDAQ, AUD/JPY, EUR/USD, AUD/USD;

Screenshot2011-08-14at092908.png

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Who is the fairest of them all?

 

Let's be honest, it's more a case of the ugly sisters when we're talking about the Euro and the Dollar. Which of the two ugly sisters would you prefer? Now that's what I call a dilemma.

 

Dollar Index futures;

Screenshot2011-08-16at065720.png

 

Given the recent travails the dollar seems to have faired reasonably. The debt ceiling farce was pure theatre. The US politicians are not stupid, although sometimes it seems that way. I got an over-riding feeling that under the surface, there was a test of international resolve here. How far can we push? How can we find out what people really think of the US dollar and US treasuries, when it comes to the crunch? Well there is no better way than to turn the debt ceiling into a political football.

 

Still, on a longer term chart you could argue the dollar is building a base here;

Screenshot2011-08-16at065842.png

 

 

 

And how about the ugly sister?;

Screenshot2011-08-16at065957.png

 

The first word that came to mind here is - Precarious. If I could still trade through ThinkorSwim right now I would be minded to buy some FXE puts here.

 

 

How has this ugly sister aged?;

Screenshot2011-08-16at065930.png

 

 

 

US dollar sentiment;

Screenshot2011-08-16at071242.png

 

Sentiment made a low of 10 at the start of May.

 

The Euro is a failed project, sooner or later the market is going to price accordingly.

 

 

30 year treasuries recently soared up to 140, almost reaching the rarified heights of December 2008;

Screenshot2011-08-16at074015.png

 

 

On a 10 year chart it could almost be a double top;

Screenshot2011-08-16at074530.png

 

 

 

 

The 30 year topped on 18th December at 141'28. That was the day after USD/JPY made a multi-month interim low;

Screenshot2011-08-16at075426.png

 

 

And the Dollar Index?

Screenshot2011-08-16at080208.png

 

 

The Dollar rallied from 78.775 to 89.97 from 18th December 2008 to 9th March 2009.

 

Maybe we should be watching the 30 year.

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  • 3 weeks later...

I'm baaaaack, and boy is it freezing back home. It's no wonder so many brits head mediterranean bound each year, (and in the twilight of their years).

 

 

 

 

 

a5c27614-1.jpg9066dd0c.jpg

 

 

Home.jpgNice.jpg

 

 

 

It looks as though my call for a potential "Silver style" correction in gold hasn't borne out, although the next few days should be interesting since gold may be forming a double top;

 

Gold futures;

Screenshot2011-09-06at165136.png

 

 

 

 

 

I made a very good call on GDX (Gold miners) back on 10th August on the gold thread;

 

Screenshot2011-08-12at180007.png

 

Gold topped on 20th Feb 2009, 2 weeks before the stock market bottomed.

 

 

I just checked my proprietary DBDT indicator and it gave a buy signal on GDX by the close of trade on 10th August. That's quite interesting for me since historically my indicator has been reasonably accurate with GDX.

 

GDX buy signal 10th August;

Screenshot2011-08-12at182327.png

 

 

GDX 1 year;

Screenshot2011-08-12at182345.png

 

Also a buy signal on XAU (Gold/Silver index)

 

If gold remains at elevated levels and crude remains suppressed then I would certainly think there is a strong chance of a very large upward breakout for the gold miners.

 

GDX today with 10th August marked;

Screenshot2011-09-06at165426.png

 

 

 

I also made a good call on EUR/USD before my trip abroad;

And how about the ugly sister?;

 

EUR/USD

Screenshot2011-08-16at065957.png

 

The first word that came to mind here is - Precarious. If I could still trade through ThinkorSwim right now I would be minded to buy some FXE puts here.

 

 

 

EUR/USD today;

Screenshot2011-09-06at165756.png

 

 

I would have lost buying puts on GLD but made decent gains on the other two had I not been without a broker. ThinkorSwim (TOS) no longer offer brokerage services outside the US and Canada, before my holiday I'd instructed a new broker Mirus Futures to organise the account transfer from TOS to them. I get back home and I can still log in to my TOS account however they seem to have added some funds to my account (just a few hundred dollars though - a parting gift perhaps?). I'm having second thoughts about Mirus, I spoke to them on the phone before my break and they told me not to worry, everything will be sorted blah blah blah. Bizarrely, a couple of positions I closed on TOS (I was told I had to close all positions by 22nd August) seemed to have risen like a phoenix from the flames and reappeared on my account, despite my account history clearly showing them being sold.

 

I'm now going to review my options regarding a new broker - Mirus have not inspired me with confidence. They might have at least emailed me if there was a problem, but there hasn't been any email or phone message left from them. On the plus side TOS advised me that my account would be closed by 22nd August, and I still have login access, including to the Prophet charts I use to calculate my indicator charts, so that is very useful. I can't count on it lasting though.

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I started reading this thread and quickly realised I have the technicals skills of a 4yr old. Will come back to it in a month or so.

 

Looks interesting, how are you finding your strategy holding up?

 

It's was working well until my broker, ThinkorSwim (TOS), ceased operations in the UK so I am without a broker right now (although I can still log in I can't trade). Getting back up and running is not a straightforward procedure unfortunately. TOS offered a great platform, a reasonable data-feed, trade execution, charting software and capability to chart my indicators all in one package. I signed up with another broker Mirus Futures but they have failed to transfer my account funds from TOS despite my account transfer form being sent well in time (over a month ago), and despite reassurances prior to my holiday in Nice. So I have to line up a data-feed, platform, broker and software that can calculate my indicators within 10 days otherwise TOS are mailing my $ account balance back to me. It sounds easy but unfortunately it's not. The issue is further compounded by the fact that I have a mac desktop and laptop - I cannot stand Windows yet most trading software is Windows only. It now looks like I will have to buy a PC to continue. Also, having emailed the technical departments of various platform providers only one has come back to advise they have the functionality to calculate my indicators - Investor RT - and it was the president of the company that responded to the email I sent. I was quite surprised by this, he seemed to think my request was quite complex. It's not really complex - it's just very contrarian. To this day I am surprised why people think a derivative of the price of "x", is useful as an indicator for the price of "x". That seems to me like trying to tell what the weather is going to be like by looking at a thermometer.

 

Sometimes the TOS depictions of my indicator charts were unreliable, I would reload my indicator charts and they would change, which they should not do since they were based on historic data. So despite this ongoing period of frustration, and since Investor RT looks very promising, I am viewing this period as a slow surf along the cloud towards the silver lining.

 

My opinion of 99% of "technical indicators" is as follows;

 

RedHerring.gif

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Posdev, I dont want to clutter up your thread with my comments, so this will be my last one.

 

You say most indicators are Red Herrings, is this from trading experience/analysis using them? I currently starting my education in this area, and the array of indicators does seem overwhelming, part of me wonders whether this would be in part a waste of my time!

 

Also, what is your work background...I assume you must be a software programmer! I find mhyslef in a similar position, a job which does not interest me (Surveying) and increasingly find my attention leaning to understanding shareprice...

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Posdev, I dont want to clutter up your thread with my comments, so this will be my last one.

 

You say most indicators are Red Herrings, is this from trading experience/analysis using them? I currently starting my education in this area, and the array of indicators does seem overwhelming, part of me wonders whether this would be in part a waste of my time!

 

Also, what is your work background...I assume you must be a software programmer! I find mhyslef in a similar position, a job which does not interest me (Surveying) and increasingly find my attention leaning to understanding shareprice...

 

I like people stopping by here and taking an interest, it makes it more interesting for me.

 

I'm going to assume you own a car. Let's imagine you have driven your car along a long winding country road, with me in the passenger seat, we stop for a break.

 

Here's a map of the road we have just travelled;

Screenshot2011-09-10at181021.png

 

Now, I've run a moving average of the car movement whilst travelling along the road, it looks like this;

Screenshot2011-09-10at181911.png

 

We switch seats, with me in the driver's seat now. I would like to try driving along the road in your car, but without the map and partially blindfolded, I can't see the road ahead but I can see the moving average;

Screenshot2011-09-10at182051.png

 

Now, are you going to hand me the keys?

 

 

I'm sure you get the point, most technical indicators are lagging, they tell you something about what happened in the past.

 

There are endless pages and pages of free indicators on the ThinkorSwim platform, plenty of indicators generate plenty of signals generate plenty of trades generate plenty of commissions.

 

 

 

If indicators had a very high probability of forecasting direction they would not be given away for free nor probably for sale either, if it was that good why would you sell it?

 

 

 

Many traders use common indicators such as Moving Averages, RSI etc but in a zero sum game if people are using the same indicators how much of an advantage is that going to give you?

 

Your job as a trader is to take money from the person on the other side of your next trade. I've seen stats whereby 90% - 95% of traders lose money. With that in mind is it wise to use the same type of indicators others in the marketplace use?

 

Certainly lots of people using similar indicators on standard settings can create a self-fulling prophecy type effect where they appear to work, but it will only be sometimes.

 

It does depends on what sort of trading you are going to be doing though. I'm generally looking for turning points in price but if you were going to be a trend follower you might find trend following indicators quite useful.

 

For trades that would last a number of days/weeks I like using Linear Regression to gain context over price,

 

GDX 1 year chart

Screenshot2011-09-10at194711.png

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GDX 1 year chart

Screenshot2011-09-10at210047.png

 

 

The channel lines are Linear Regression channel trendlines. These section off price action to show extremes in price action. When the price is at the far upper or lower line it can be said to be 3 standard deviations from the mean price covering the last year. What I've also set it to show is the 95% line, 2 standard deviations from the mean price. So if price is at the upper or lower 95% line you can say it's at a price extreme that has only been seen 5% of the time during the past year, two standard deviations from the mean price.

 

I also show the 68% lines, that's those lines closer to the median line of the channel. The reason for this is because I want to section of the trend channel in the same way as a bell curve distribution, so that I can easily see areas where the price is 1, 2 or 3 standard deviations from the mean price.

 

 

 

Screenshot2011-04-11at202857.png

 

In the past have looked at Tom DeMark's indicators, they are quite interesting, mainly the TD Sequential (PDF here);

 

Screenshot2011-09-10at200721.png

 

Sometimes it can pick out good turning points, the joke is it picks 10 out of every 7 market tops.

 

Investigate indicators, find out what they do, and how they work and then ask how is this going to be useful to me? You may find something that works for you, trading is very personal. I also post on another forum and some of the people are too focussed on indicators. Discipline and money management are more important IMHO.

 

As far as my background I started a Computer Science course at uni but didn't finish it as I realised it wasn't what I wanted to do. I've worked in an eclectic mix of unfulfilling roles, not software related.

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Well I was told today by ThinkorSwim that my funds are on the way to Mirus Futures. I'm looking at using VMware Fusion (an application that allows you to run PC applications on a Mac), so I'm not limited in choice when it comes to trading applications.

 

All being well, once I'm fully set up I should be able to use Investor RT to generate my indicator charts, and NinjaTrader for execution...

 

I've been looking at TBT;

TBTvolume.png

 

The lower it goes the more volume seems to be drying up, both on a standard and market profile basis. Suggestive of a turn perhaps?

 

 

30 year treasury futures - 1 year (daily)

Screenshot2011-09-13at174544.png

 

 

30 year treasury futures - 3 years (weekly);

ZBweekly.png

 

The potential for a multi-year double top is present.

 

This next chart is from www.SentimenTrader.com

Composite.png

 

This a a form of composite indicator created by SentimentTrader where they combine data from sentiment indicators for the bond market,

together with put/call ratios, Rydex mutual fund flows, sentiment surveys and Commitments of Traders data.

 

Certainly based on the points where the red/green (overbought/overold) lines are touched, it's seems quite interesting.

 

 

------

 

 

Some information about Investor RT - the application I'm going to use to recreate my indicators - this feature sounds very very interesting.

 

Investor/RT allows the user to create instruments which reflect some arithmetic combination of other instruments. The feature is useful for tracking spreads and straddles in the futures or options markets, or for tracking industry group performance, or simulating the value of a mutual fund.

customInstruments.jpg

Investor/RT allows the user to setup user-defined instruments which are defined as:

  1. The weighted sum of one or more instruments, called the component instruments.

  2. The weighted difference between any two component instruments.

  3. The weighted ratio of any two component instruments.

The components of a user-defined instrument may themselves be user-defined instruments. Therefore, arbitrarily complex calculations are possible.

 

For continuous feed users, each user-defined instrument is recalculated each time any of the underlying components of that instruments changes price. User defined instruments are also recalculated automatically whenever quotes on the underlying components are downloaded from Dial/Data. Values are calculated for open, high, low, last, bid, and ask. Volume for user-defined instruments is a count of the number of times the indicator has been recalculated during the trading session.

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Thanks for taking to the time to respond PD. That linear regression reminds me, in a roundabout way, of bollinger bands...with the channels..but is obviously different! Ive not seen it on any of the standard websites (Google, Yahoo).

 

As a novice im in two minds re technicals...

 

You should take the time to investigate Chuck Hughes - http://www.chuckhughes.com/. He is a top trader and one of the technical indicators he uses are Keltner Channels, as far as I understand he only trades based on technical analysis and he has been very very successful. Maybe his type of trading, with a longer term outlook, is more suited to your goals...

 

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My funds are with Mirus now, and I asked my girlfriend (who works at Apple) to get me a price for VMware Fusion (a Mac application that emulates a PC) and she told me that two weeks ago she was sent an activation key for Parallels Desktop 7 (PC emulation software) by the people at Parallels, so I now have Parallels for free. Now that's what I call good timing!

 

Now I just need to buy a copy of Windows 7, set up NinjaTrader, program my indicators into Investor RT, and I'll be all set.

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I'm currently waiting for a copy of Windows 7 to be delivered, should be in the next couple of days, meantime here's my review of the SentimenTrader website;

 

 

 

Screenshot2011-09-17at225648.png

19th September 2011

www.sentimenTrader.com

 

 

There are a seemingly endless supply of technical indicators a trader or investor can choose from, and since many are derived solely from one data series - the price of a security, it's important to complement these by including sentiment indicators as part of any market analysis.

 

SentimenTrader began in 2001 and is operated by Jason Goepfert, a trader of 15 years, the founder and president of Sundial Capital Research, Inc.

 

Sundial's focus is on "the research and practical application of mass psychology to the financial markets". Their work has been mentioned in prominent media such as Barron's, CNN, CNBC, SFO Magazine, The Economist, Reuters, The Wall Street Journal, Active Trader, Futures, TheStreet.com and TradingMarkets.

 

SentimenTrader is a subcription access website, they offer a 14 day trial with no obligation, along with options to subscribe on a monthly ($25), quarterly ($70) or yearly ($250) basis.

 

 

Once you're logged in you find a well organized page with a bar along the top with drop down menus available under most headings, aside from the "Intraday" heading.

 

Screenshot2011-09-17at184030.png

Drop down menus

Report2.png b.pngBonds.pngComm.pngScreenshot2011-09-17at195338.pngIntra.pngMore.pngScreenshot2011-09-17at194849.png

 

 

 

The "Stocks" "Bonds" and "More" headings have further sub-menus allowing you to get the information you are looking for quickly. To start out, I found it was useful to head for the "Complete List" sections, you can then scroll down the list of available confidence indexes, models and indicators to get an idea of what is available. There is a lot of information on SentimenTrader and it seems quite comprehensive. Eg For stocks there are: proprietary models, numerous Volatilty, Put/Call ratio, Breadth and Sector indicators along with many economic surveys. There are also many indicators for each of COT, Shorts, Cash levels (eg Mutual fund cash) and Rydex. On the complete list page data is in the following format;

 

Screenshot2011-09-17at200746.png

The data is available to download in Excel format for those that wish to, the last column is a Bullish - Bearish scale that allows a quick glance showing how bullish or bearish the reading is. You can also bring up charts depicting the data;

 

Example chart;

Screenshot2011-09-17at201720.png

Screenshot2011-09-17at204143.png

 

 

 

 

For Bonds, there are indicators for Rydex fund flows, Put/Call ratios, Trader Commitments and Surveys. What caught my eye was the Treasury Bond Indicator Score, this a form of composite indicator proprietary to SentimentTrader where they weighted and combined data from sentiment indicators for the bond market, together with put/call ratios, Rydex mutual fund flows, sentiment surveys and Commitments of Traders data. The result is an overbought/oversold indicator that looks very useful;

 

Composite.png

 

 

For Commodities, there are indicators for Trader Commitments, Public Opinion, Rydex Fund Flow and Individual Contracts. For the Individual Contracts, all major Currencies, Energy, Metals, Grains, Softs and Meat contracts are covered, although it should be noted that Platinum and Palladium are not featured. Seasonality charts are also available for each contract listed within the Individual Contracts section.

 

The "Public Opinion" charts are of notable interest, an excerpt from an explanation on the website;

 

"To calculate this gauge of public opinion, we have created an index based on many of the established surveys currently in existence, some of which are noted below. We have looked at the history of the surveys to determine how accurately they have measured extremes in the past, and weighted their influence in our indicator appropriately based off that analysis."

 

The following is SentimenTrader's Public Opinion chart for silver as it was towards the end of April 2011;

 

image002+%25281%2529.gif

 

This chart played an important role in my analysis of the silver market back then, I was not a subscriber back then, but I found this chart and it led me to their website. The analysis was posted on Green Energy Investors (GEI), with others contributing theirs also, in a collaborative effort that led to a very accurate and profitable top call in silver. Even some of the non-traders took action, such as swapping silver for gold.

 

The initial thread on GEI that started that process, can be found at: "$50-ish Peak in Silver Coming? Hunting the Top "

 

 

 

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Moving on to the Models section, these are also proprietary to SentimenTrader;

 

Screenshot2011-09-17at221710.png

 

In a similar vein to the Treasury Bond Indicator Score these are weighted composites of sentiment indicators, also depicted as oscillators, suggesting overbought/oversold conditions. These are offered over a variety of timeframes, from intraday to a few days, weeks or months. Since I mainly trade E-Mini NASDAQ futures the STEM.MR NASDAQ is of potential interest (although I haven't properly studied it yet) and could be useful as a filter for trading signals from other indicators, as it suggests points where rallies may be overdone, and where sell-off's may be nearing an end.

 

 

The charts on the Intraday section show two week periods for the S&P 500 and NASDAQ 100, and are updated every 15 minutes, charts showing the STEM.MR model are shown beneath each, along with cumulative tick, a price oscillator, breadth charts, VIX and Put/Call ratios. This isn't part of the site I generally use since I prefer to have my own charts set up through my trading platform with my own settings applied however for those not at their normal workstation it's helpful to have on the site, rather than you having to look elsewhere.

 

 

Finally, under the More section you can find seasonality charts for each month of the year for the S&P 500 with data covering 1950 - 2006. You can also check seasonal performance of the S&P 500 around various holidays eg Labor Day, New Year's Day etc. This is an interesting feature I haven't come across before and allows you to quickly gain an understanding of market activity around various seasonal dates.

 

 

Other features I like from this website are the Sentiment Summary on the main page that gives a brief run down for the day and some commentary, both on a 1 to 5 day and 1 to 3 month basis. As a subscriber you also get a daily email with interesting commentary and analysis including general equity market indicators, and also details and analysis of the top sentiment stories, the most recent being about a Wall Street research report highlighting a long-term sell signal from the Coppock Curve indicator. You can also create a list of your favorite charts, saving you time when you want to refer back to your preferred charts.

 

 

 

Overall I think sentimenTrader is well worth the subscription. The fact that all of the information is well organized and formatted makes it very user friendly and they've covered a lot of bases with the range of content, making it appealing to both the trading and investing community. I'm also a big fan of their proprietary indicators.

 

Recommended.

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I've not really been checking my indicators of late since I can't trade right now but thought I'd I'd post this, a sell signal on the NASDAQ that triggered on the close yesterday;

 

DBDT sell signal E-Mini NASDAQ - 1 year chart

Screenshot2011-09-20at184113.png

 

 

E-Mini NASDAQ - 1 year chart;

Screenshot2011-09-20at210243.png

 

 

 

This is NYSE composite with Dow Jones Transporation Index and SPX;

Screenshot2011-09-20at195559.png

Divergence between the NASDAQ and these the indices.

 

 

 

And divergence between the E-Mini NASDAQ and AUD/JPY, EUR/USD and AUD/USD - 6 week chart;

Screenshot2011-09-20at212645.png

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I've not really been checking my indicators of late since I can't trade right now but thought I'd I'd post this, a sell signal on the NASDAQ that triggered on the close yesterday;

 

DBDT sell signal E-Mini NASDAQ - 1 year chart

Screenshot2011-09-20at184113.png

 

 

E-Mini NASDAQ - 1 year chart;

Screenshot2011-09-20at210243.png

 

 

And divergence between the E-Mini NASDAQ and AUD/JPY, EUR/USD and AUD/USD - 6 week chart;

Screenshot2011-09-20at212645.png

 

The above was good for a 100 point decline in the NASDAQ.

 

 

Will the below be good?

 

I think this may be the end of the cyclical bull market in silver. As a result of yesterday's drop my NAV dropped by 2.6%.

 

Previously in April, I bought puts on SLV, and sold half of my physical right at the top, I then cashed in the puts between $33.75 and $35, and bought back my physical position at $37. At the time people were rubbishing the idea of it being a top (apart from Bubb). My thinking was that the bull market would continue, but that the price would have to reach and exceed $50 for this to be confirmed to be the case in my mind. Selling after a drop is not typically what you do in markets, however, the meaning of yesterday's price action and the price action in the markets from a macro perspective could be very significant in my opinion.

 

After much vacillating, late yesterday I sold my entire physical silver position for US Dollars, I got out at $36.4. I am now entirely in cash.

 

Today I see silver down a further 10%, so at the moment it looks like the correct decision, but it's too early to say.

 

Only time will tell.

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I just reinvested 25% of my silver profits into Gold bullion, a no-brainer for me really. I have a lot of dollars in a trading account so it's a nice hedge for that, I am not convinced of the view that there will be hyperinflation at some point, nor that gold will ever be part of a monetary unit. However, I realise I could easily be wrong and want to hedge against that. If there is one thing you can count on, it's for politicians to repeatedly make bad decisions. I am quite sure that if gold were to be considered as part of a monetary unit, it will be the very last option available on the table, and by that time things could be a real mess. I've done very well indeed with silver, but it's far less well rounded as a hedge than gold is.

 

I may put another 25% of profits in over the next few days. I'm keeping the rest since if the precious metals story turns out to be complete bolshoi longer term, I still have the gains to show for it.

 

 

I'm a fan of Moses Kim from expectedreturnsblog.com, he seems quite shrewd and reckons there's more to come on the downside. His latest post;

 

 

Gold's Collapse Continues

 

"As I write this, gold is trading at $1591 in the overnight markets, after trading as low as $1531. Surprised? You shouldn't be. Gold was overstretched and needed a breather. I am actually starting to think we will see gold in the $1400 range.

 

Gold has monster corrections all the time, yet people are surprised when they come. Every time gold rallies, gold bugs say the world is ending and hyperinflation is imminent. This doesn't make sense to me. Treasuries are hitting high after high, which means the interest payments on our debt are holding stable, and somehow gold is supposed to skyrocket? Let's be objective here.

 

True believers in gold should take a one month vacation and not even look at the price of gold. When your vacation is over, buy gold at whatever price it's trading at. I honestly believe this is a better strategy for most people than the alternative, which is to constantly monitor gold prices and buy and sell in an emotional frenzy. Let gold bounce off the 200-day moving average, then let's start talking about a rally."

 

 

 

As an aside William Patalon III, Executive Editor, Money Morning posted a story on 20th September, the headline -

 

Why We Know Gold Prices Are Headed Higher

 

You gotta love it, gold now $200 lower. I'll be paying close attention to this guy in the future!

 

 

-------------------

 

As regards futures trading, I still haven't received my copy of Windows 7 that I ordered that I need so I can run the PC software provided by my broker. I ordered it from Amazon, delivery date states between 22nd September and 4th October...

 

I can't complain since it's still within the "delivery window", I'll just need to be patient.

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Well it's all too barren here on my trading journey thread, I seem to have been the victim of some sort of fraudster on Amazon selling Windows 7. Nothing arrived, it's been over 2 weeks since it was supposedly sent. Never mind, the card people at the bank will sort that out. Meantime I bought another Windows 7 online - let's hope this one turns up.

 

I've not been looking at what my indicators have been doing since I can't trade just yet, until I get Windows 7 running with Ninjatrader and Investor RT, but I had a look today to see whether it picked anything out of today's action;

 

Sell signal on YM (E-Mini Dow Jones futures) triggered at 17:05 today;

Screenshot2011-10-03at220416.png

 

 

Equivalent short point on E-Mini NASDAQ;

Screenshot2011-10-03at221732.png

 

Entry point based on the indicator sell signal at 17:05 was 2129 on the NASDAQ, my standard trailing stop of 8 points would have been taken out following a bounce, at 2101.75. That's 27.25 points - a reasonable move. Before I start trading again I'll need to review my 8 point trailing stop, based on the volatility right now it looks like a 10 or perhaps 12 point trailing stop would be more appropriate.

 

I really hope we are moving into a long term bear market since my system has typically netted more points on the downside, and I want to take advantage of that.

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Gold futures log chart

Screenshot2011-10-05at203928.png

 

This is gold futures covering 12 months shown within a linear regression trend channel, it's not drawn by me, it's calculated automatically. I've set the regression channel to show the median line, the outermost lines of the channel represent 3 standard deviations from the mean, and the ones inside are 2 standard deviations from the mean. Money Flow Index (MFI) is beneath the chart in dark grey. MFI recently formed a low on 29th September.

 

The first and second time this indicator bottomed, it marked some form of low in gold. (Blue vertical dashed lines)

 

Interestingly, you can also see that the price level gold was at, when MFI was at a low, also marked a key support level in gold, with gold trading back down to the same price level later on, then rallying further. (Horizontal blue lines).

 

What I also find quite interesting is that, on the 2nd and 3rd occasions when the MFI was at a low, the lower 3rd standard deviation line was at the exact price level where MFI made a low previously. (Grey dots show the intersection between the 3rd standard deviation line and previous MFI low gold price)

 

That may just be a co-incidence and/or confirmation of the strength of the trend.

 

 

It seems unlikely but if that relationship were to continue, then gold would rally somewhat from here, before trading down to $1575 by 8th December 2011.

 

 

I bought gold earlier today, without having looked at any of this previously.

 

 

This next chart is a proprietary indicator I developed, working on GDX (Gold Miners ETF).

 

GDX.png

 

It may look slightly cryptic but it has generated a buy signal for GDX today, previously my indicator signals on GDX have worked well.

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A two hour meeting at work progressed in such a manner that even the colours in the room were seeping from the walls trying to escape, the dye in the carpet was doing it's best to reach the door, not wishing to be associated with the grey and desolate reality of the dis-jointed letters uttered by the mouth that we were supposed to be listening to, but could only see open and close as my mind drifted to somewhere much, much more interesting.

 

I received Windows 7 yesterday, I'm sure it's a fake copy actually, even though I installed it, the authorisation key worked and the online validation worked - such is paranoi after having been ripped off previously.

(Also see - Pavlov)

 

It's taken me 5 hours to become aquainted with, and figure out how to program my indicator into, Multicharts. I'm making progress, not as fast as I'd like but since I thought Multicharts would be quite daunting, with it's 961 page manual, I realise it's not so bad and so far we appear to have hit it off, although I'm not prepared to propose just yet.

 

Google Multicharts if you want to know more. I'd heard of it before via www.bigmiketrading.com but knew nothing of it and paid no attention to it until I was forced from my laptop into the lap of Bill Gates after ThinkorSwim rudely interrupted my trading back in August. I will admit I am pleasantly surprised with Windows 7, it doesn't seem as intuitive as Max OS X, but that may be since I've become too accustomed to using the Mac over the years.

 

 

My DBDT indicator working on NASDAQ (on ThinkorSwim);

slowly.jpg

 

My DBDT indicator working on NASDAQ (on Multicharts);

Gettingthere.png

 

 

Similar but different, for some reason the end number is not the same, perhaps I'll figure it out tomorrow...

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