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Thanks for the explanation Guy......Ahh, my old
nemesis, the word "proprietary" <g>....
It always seems to rear it's ugly head at *precisely*
the most interesting times !
Dick
-----Original Message-----
From: Guy Tann <grtann@xxxxxxxxxxx>
To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Date: Monday, June 22, 1998 10:35 PM
Subject: RE: Times are a changing? Bonds & Equities
>Dick
>
>First, I'd better explain myself a little better. Our systems are in a
>continual state of evolution. Stuff that used to work great in the 60s for
>example, don't work well now. If we ever tank, I should be in great shape
>because I can dig out our old technical systems that worked like a dream
>back then.
>
>Currently, all of our systems are based on some proprietary indicators that
>we developed over many years. Being very honest, without spending a lot of
>time, they would be meaningless to anyone not familiar with our
methodology.
>I can give you some indication as to how we work and our general
philosophy.
>
>1. We are strictly technical traders and have almost never (want to leave
>myself an opening here) paid any attention to fundamentals.
>2. We are contrarian traders. For us to execute a trade, we have to have
>two things present. They are, first a buy or sell signal and second, a
>'contrary' which is another proprietary indicator that gives us some idea
of
>what happened that day, price wise. There are times when we wait because
>experience has taught us that without this 'contrary' our probabilities
drop
>to 50% or less.
>3. We've gravitated to trading strictly S&P futures because the
>profitability has been better, and more consistent.
>4. All of our indicators are based upon our philosophy that the 'price
>action' in the futures market already includes all fundamentals as well, so
>that by basing our system on these 'price actions' we can develop some
>thoughts as to the probability of success in making a trade.
>5. We feel quite strongly that you should develop your own indicators as
>opposed to using the ones packaged with MetaStock or other software. Our
>signals are quite good at picking tops and bottoms, FWIW. If you develop
>your own, then you won't have the problem of trying to trade the same day
>and time that everybody else is trying to trade. Just our thoughts and
>opinions. We're not knocking anybody's approach, but this is ours. Works
>for us. We're constantly working on developing new indicators, all the
>time. My dad, who's 89 BTW, spend about 8 hours a day working on new
>indicators. He's sent me 3 programs this week alone to evaluate, one of
>which doesn't use a contrary indicator, which is unique for us. For
>example, the William's %R indicator that's floating around, is very similar
>to an indicator of ours that we developed over 25 years ago. Again, this
is
>easy for me to say, but we have my dad working on it full time, my brother
>part time and me, most of the time. It's hard with an 8 year old on Summer
>vacation, but I do spend as much time as I can. Sometimes up to 10 hours a
>day.
>
>We first automated our systems in 1962 when I left IBM and joined a
>manufacturing company in Detroit. That gave me access to a mainframe
>computer. From there, I converted it to Basic and use GE timesharing.
Then
>converted it to COBOL and stuck with that for several years. In the early
>70s, we built NorthStar Horizon computers running under CP/M and COBOL
>(MicroFocus). We've been in micros ever since. My current box is a
Pentium
>400 with 64Mb RAM, 14Gb disk, a DVD II drive, a 17" monitor, etc. We've
>come a long way baby, in terms of processing power. That first NorthStar
>had 4k of memory and 2 floppies.
>
>Hope this is of some help.
>
>-----Original Message-----
>From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]
>On Behalf Of Dick
>Sent: Sunday, June 21, 1998 11:25 PM
>To: metastock@xxxxxxxxxxxxx
>Subject: Re: Times are a changing? Bonds & Equities
>
>Hi Guy,
>
>I've been reading your comments with great interest, and I
>haven't seen you describe your S&P futures trading system...
>
>What's interesting to me is that after all these years, you've
>managed to not only survive, but prosper using it. (Most I
>know haven't accomplished either of these seemingly elusive
>trading goals in futures trading)
>
>Could you describe your system ? (I hope I'm not being
>nosey, but I'm curious about the nature of a mechanical
>system robust enough to survive all these years of use.)
>
>Thanks,
>
>Dick
>Dick@xxxxxxxxxxxxx
>
>P.S. I lived in So. Cal. for about 25 years, and right now, hawaiian
>property is cheaper than many parts of California (because of the
>Japanese credit collapse, and the subsequent sale of assetts to the
>tune of ~.25 on the dollar) Go figure, eh ?
>
>
>
>-----Original Message-----
>From: Guy Tann <grtann@xxxxxxxxxxx>
>To: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
>Date: Saturday, June 20, 1998 11:55 PM
>Subject: RE: Times are a changing? Bonds & Equities
>
>
>>Otto
>>
>>I agree with your comments, however right now, it appears that we have
>>decoupled without the recession indicators flying, at least here in the
US.
>>With regards to Asia, I see a flight to US Bonds to increase the meager
>>interest earnings available to the Asian saver and as protection from the
>>collapsing markets over there. For it to happen now, after the market
>>collapse in Japan, the problems in Korea, Hong Kong reunification, etc.
>Why
>>now? Why not earlier, while the Japanese market was beginning its way
>down?
>>
>>Commodity prices have been on a downward slide for some time now as well.
>>Through all this, Bonds remained coupled to equities here (at least in our
>>system). I guess what I was posing was has anyone else seen this or was I
>>imagining it and did anyone have thoughts to share whether concerning the
>>fundamentals or what they noticed through their Technical Analysis.
>>
>>BTW, other areas to consider in addition to utilities are food vendors
like
>
>>the big grocery chains. People still have to eat, as the story goes.
>>
>>
>>
>>-----Original Message-----
>>From: owner-metastock@xxxxxxxxxxxxx [mailto:owner-metastock@xxxxxxxxxxxxx]
>>On Behalf Of Otto
>>Sent: Friday, June 19, 1998 7:00 PM
>>To: metastock@xxxxxxxxxxxxx
>>Subject: RE: Times are a changing? Bonds & Equities
>>
>>I apologize if I am stating the obvious or something totally out of whack.
>>But it has been my understanding that equities and bonds decouple every
>>once in a while whenever investors are beginning to focus on a possible
>>recession ahead. With a possible recession ahead, the utilities rise
>>markedly and the bonds follow, because investors are anticipating an
>>economic slow-down which will reduce money demand, reduce interest rates,
>>and thus increase bond prices.
>>
>>If investors go back to focusing on economic overheating (and fear of the
>>fed), then the bonds and equities will re-couple, as investors see any
>>evidence of overheating of the economy as bearish for both equities and
>>bonds, and they will see any evidence of moderate cooling of the economy
as
>>relief from their fear of the fed, and thus bullish for equities as well
as
>>bonds.
>>
>>If the bonds make an extreme move (currently perhaps yields increasing
>>beyond 6.2%) then the bonds might re-couple because this would strangle
>>profits enough to be bearish for equities who would then join the bonds on
>>the way down. If the bonds make an extreme move up, pulling the yield
down
>>to 5.4% and lower, this does not necessarily mean that equities will
rejoin
>>the bonds and rise, because the drastic drop in bond yields can happen in
>>times of deflation (recession, depression, disaster, catastrophy, end of
>>the world, etc.) and this is not good for corporate earnings, therefore
>>remains bearish for equities.
>>
>
>
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