"The market always destroys the weak- that is, investors who don't have well founded convictions. You need some convictions to avoid getting faked out, but having the courage of your convictions could get you wiped out if your convictions are false." –George Soros

Two powerful sentences for me. This is on the wall in my office.

Bill,

It just occurred to me that with your increasing calls for reader participation, it would be very helpful and reassuring, if everyone who intends to post information on some topic, also post their bona fides, so that we gentle readers will have some useful basis for assessing the correspondent's judgement. This is the type of information that you've provided us for yourself and I believe that the blog is in danger of becoming a free-for-all bulletin board unless readers have the opportunit to vet the background of contributors.

With much gratitude for your prodigious efforts at enlightening your readers,

Barry

Barry-

Just FYI

Most professionals cannot contribute to web sites based on corporate policy. Liability issues abound.

Therefore they must remain anonymous.

In other instances self employed 'professionals' could also use this site to indirectly solicit your business for their management or newsletters, etc.

I am not that familiar with bulletin boards, but I would assume you would want to judge individuals postings and determine whether their contribution is of value or not. My guess is that Bill would also be quick to edit out obvious 'problems'.

Barry,

This site has only had this many comments while Bill has been busy. It won't stay this way for long, so don't worry.

Barry,
It's a good point, and well noted. I agree with g034 that these are unusual times and that we are all awaiting the new blog format. For my own part, I've said numerous times that I am not a professional. And I've never hawked a stock here either, except to point out analyses that follow Bill's methodolgies or to show where I have applied it with some success. Long time readers have heard some examples of my trades where it "doesn't work out so well" too.

I presume that monitors will provide some basic background stuff as the site comes up, even if it is anonymous. I got my first book on TA <1yr ago, and am very much a non-pro (though I did the CMT-1 in the fall, I don't do it for a living). But I mostly post observations anyway... very much in learning mode.

"According to the latest Investment Manager Outlook analysis from the Frank Russell Company (creator of the Russell indexes), 80% of the managers surveyed were bullish on large capitalization growth stocks, which was far and away the most skewed category of them all."-
Sentimentrader.com 1/12/06

"New research by Lehavy and Sloan shows the stocks that institutional fund managers are busy buying are outperformed by the stocks the fund managers are busy selling. In the three years after portfolios were formed, those stocks that had seen the lowest level of interest from institutional investors outperformed those stocks with the highest attraction by over 4.5% p.a. (using data from 1982-2004)."-
JohnMauldin 1/13/06

If you are trading gold, you should take a regular look at the COT data. Bookmark this and you won't need to rely on others:

http://www.cftc.gov/cftc/cftccotreports.htm

Also, fibonacci is a key indicator here. It has worked like a charm. If you are not familiar with this, google it.

The recent low consolidation area was in key fib levels.

go to stockcharts, enter $gold, use daily and 3 month view. When you have the chart up, go to "annotate" at the bottom of the chart. This will bring up another chart with tools at the top. The fib tool is black and blue horizontal lines. Line up the November low and the December high and drag the lines forward, to the right. You can see how the prices consolidated between the 61.8% retrace and the 38.2% retrace with the 38.2% providing resistance. This is not the best example, but it is the latest one that I was able to use to my advantage. These retracements become extremely powerful when you find overlapping price points on the daily and weekly charts.

Learn Fibonacci, you won't be sorry, besides, the history is a pretty cool read.

g034 - do you use absolute cycle low-high (including intra-day) when using this technique?

g034-

Let me ask about timing re-entry. Once it starts to correct, do you then anticipate (expect) that the retracement is at least to the 50% level? Does that trigger a buy-in for you? Or are you waiting for a 61.8% retracement as normal? How does this work for you?

What do you mean by: "These retracements become extremely powerful when you find overlapping price points on the daily and weekly charts." ?

I am also interested in Fibs and elliot wave but without knowing to much about them I question their predictive abilities that are often touted. That being said it seems that many traders use them and that alone may cause the price actions but I would like to hear g034 comment on it.

I am an non-professional trader/finance student.
I think I killed the last forum with my last comments so I will not make anymore if I don't give some evidence or data to provide . Then it would be nice to hear a discussion. Here is an article from the economist about Greenspan.

http://www.economist.com/finance/displaystory.cfm?story_id=5381959

I have enjoyed reading your comments while bill has been away/ busy.(Stockman, g034, MarkM, ClaudeG,)

Andy

stockman-

That quote leading off this thread is like The Tell-Tale Heart! I can HEAR it. It is speaking to me! Take it away!

First time I came across this site after re-reading the safehaven article correlating M3 "shots" with long yields. There are a few political characters on the site but the issues obviously span several administrations.

http://www.geocities.com/arthurcutten/jesse.html

This chart illustrating stealth bear in $SPX caught my eye,
http://jessel.100megsfree3.com/nikkeiSPXgold.png

MarkM/Andy - I can't speak for g034, or anyone else, but I routinely use Fibs in my trading, and your comments got me to questioning my own rationale to see if it is still valid. First, let me give some credit to Joe DiNapoli's book (and I have no interest or connection to Joe other than what I have read in the book on my shelf), Trading with DiNapoli Levels.

I am both a day trader and a STerm swing trader (successful when I follow my rules). I do not use Fibs for timing trades, per se, because Fibs only indicate levels where relatively strong support can be expected in a retracement. If Price retraces to the approximate 38.2%, 50%, or 61.8% levels and then moves back in accord with the PREVAILING trend for my trading purposes, then I go with my next confirming trade signal. If the trend is down, not up, then I most likely would be using Fibs to indicate where Resistance could be expected, and that would be more important to me for selecting my trading signals.

I have read and have found it generally true that a bounce from the (approximate) 38.2% level, or above, is the strongest indicator of continuing moves upward. A bounce from the (approximate) 50% level is good but a bounce from the (approximate) 61.8% level is suspect (means be more careful with stops).

I'm not sure what "price overlaps" on Fib levels between daily and weekly means unless the time period for the weekly data is much longer than that for the daily data. If so, than I would agree with g034's comment in that respect.

Andy - I admire your efforts to start early in life and study what works in trading. Finance text books, and I've read my share, possibly tend to shape students toward thinking that everything is based on hard formulae (including Fib levels). In my experience, though, markets are more Pavlov oriented; ie, the more something works, the more people will follow it, thus, the more it works until it doesn't.

Have some fun with it!

Re: Fibonacci

I use highs and lows.

Example of overlap: on the 34 year gold chart (london fix) found here: http://www.gold-eagle.com/charts/35yeargold.html, 850 high, 250 low, gives you a 38.2% at $479, a 50% at $550, a 61.8% at $620. These would be price targets for me with regards to the London contract, although I know that cash gold traded higher than $850, so please just use this as a rough example of overlaps, don't trade of this. If I have a $550 target on a daily also, I know that this is a key level because it overlaps.

TA is just part of the picture, and is a lot of personal interpretation from experience.

I will post more later on this, but for now, the family calls ;-)

I have a question for the group -

+ whats the working difference between a normal futures contract, and a "mini" one? I understand th size of the contract is the issue. I'm confused because when I look at COT for NDX it seems commercial is net short on one and net long on the other. Thank-you -ClaudeG

NASDAQ-100 STOCK INDEX - CHICAGO MERCANTILE EXCHANGE Code-209741
FUTURES ONLY POSITIONS AS OF 01/10/06 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT
--------------------------------------------------------------------------------
(NASDAQ 100 INDEX X $100) OPEN INTEREST: 59,775
COMMITMENTS
16,078 8,025 426 31,802 44,589 48,306 53,040 11,469 6,735

NASDAQ-100 STOCK INDEX (MINI) - CHICAGO MERCANTILE EXCHANGE Code-209742
FUTURES ONLY POSITIONS AS OF 01/10/06 |
--------------------------------------------------------------| NONREPORTABLE
NON-COMMERCIAL | COMMERCIAL | TOTAL | POSITIONS
--------------------------|-----------------|-----------------|-----------------
LONG | SHORT |SPREADS | LONG | SHORT | LONG | SHORT | LONG | SHORT
--------------------------------------------------------------------------------
( NASDAQ 100 STOCK INDEX X $20) OPEN INTEREST: 347,773
COMMITMENTS
109,431 128,717 4,644 214,167 194,238 328,242 327,599 19,531 20,174

ClaudeG-

How do you like DecisionPoint so far?

Best,

MarkM,

Still learning how to use it. I printed/studied the section on cycles (very nice graphics), the section on trading mistakes (I've made most of them and now the goal is to not repeat), the section on PMO oscillator (so I can leverage the DP reports better), and the section on valuations was interesting.. noting that they are on the high end now - but also noting that the last out-of-control-M3 cycle in 2000 took them higher still. The rydex cash stuff is very nice as well (soon I expect to make a big rydex inverse Nas100 purchase). But DP won't replace my stockcharts acct.. but it will replace my subscription to WSJ.