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Alex,
Thanks for your reply. Some of what you say is
accurate. If you read my statement carefully you will see that penetrating the
boundary is only one element of the prediction. The second part is the presence
of a forecast window generated by my Near Impulse Forecaster. I have a long
history of data and trades validating that when these conditions are present,
72% of the trades are profitable. Last week it was 81.25% and this approach has
resulted in only five losing weeks this year.
Even in trending markets, trades between a boundary
and a mid-line can be profitable. The secret is knowing in advance when it is
going to happen.
What I was pointing out is the rare condition of so
many stocks meeting the reversal conditions.
Thanks again.
Regards,
Jim White
----- Original Message -----
Sent: Tuesday, October 05, 2004 2:12
AM
Subject: Re: [RT] Ben's Call
Those channels can "predict" reversals for ranging
markets only. When
market is trending they
don't produce tradable signals. Sometimes
price makes a
short living correction then penetrates boundaries and
keeps
going on. Sometimes it penetrates even without correction.
For
trending market of 2003 I counted 5 "tops" that were
"predicted" but
never happened.
Channels of all
types are estimators for volatility, not predictors
for directional
movements or reversals.
Alex.
Monday, October 4, 2004,
11:47:32 PM, you wrote:
JW> This is a a supplement to Ben's call
for a significant top today. Whereas
JW> Ben's analysis was based on a
macro view of the markets, my methodology
JW> includes macro models as
well as a detailed look at individual stocks in the
JW> OEX and NDX. My
forecasting methodology also is predicting a reversal this
JW> week but
the macro models of the markets have yet to flash a sell signal.
JW> The
most likely reversal days appear to be Wednesday or Thursday.
JW>
To get an opinion of the magnitude of the decline, I look at the
individual
JW> stocks. The more stocks in an index contributing to the
reversal, the
JW> greater it will be. Those of you following Clyde's
work on Hurst channels
JW> realize that the chance of a reversal is
greatest at the boundaries of the
JW> channel. I measure channel
location along with forecast signals to get a
JW> feel for the extent of
an index move. Yesterday, 29 of the NDX 100 stocks
JW> were at a channel
boundary and near a reversal - today's up move resulted
JW> in 50
of the 100 being in reversal territory.
JW> I expect some rounding
action in the next two days with more stocks entering
JW> their time and
price limits for a reversal so the decline could be
JW>
substantial.
JW> I have also exited fund positions and began to enter on
the short side.
JW> I urge caution this week.
JW> Jim
White
JW> Yahoo! Groups
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