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Hello Jim,
I agree on market statistic approaches. I use NYSE adv/decl line
particularly. Sometimes at their extremes they give clues for
determining/confirming key supports/resistances.
Best regards,
Alex mailto:alex_bell@xxxxxxx
Tuesday, October 5, 2004, 4:44:07 PM, you wrote:
JW> Alex,
JW> 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
JW> 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
JW> profitable. Last week it was 81.25% and this approach has resulted in only five losing weeks this year.
JW> 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.
JW> What I was pointing out is the rare condition of so many stocks meeting the reversal conditions.
JW> Thanks again.
JW> Regards,
JW> Jim White
JW> ----- Original Message -----
JW> From: Alex Bell
JW> To: Jim White
JW> Sent: Tuesday, October 05, 2004 2:12 AM
JW> Subject: Re: [RT] Ben's Call
JW> Those channels can "predict" reversals for ranging markets only. When
JW> market is trending they don't produce tradable signals. Sometimes
JW> price makes a short living correction then penetrates boundaries and
JW> keeps going on. Sometimes it penetrates even without correction. For
JW> trending market of 2003 I counted 5 "tops" that were "predicted" but
JW> never happened.
JW> Channels of all types are estimators for volatility, not predictors
JW> for directional movements or reversals.
JW> Alex.
JW> Monday, October 4, 2004, 11:47:32 PM, you wrote:
JW> JW> This is a a supplement to Ben's call for a significant top today. Whereas
JW> JW> Ben's analysis was based on a macro view of the markets, my methodology
JW> JW> includes macro models as well as a detailed look at individual stocks in the
JW> JW> OEX and NDX. My forecasting methodology also is predicting a reversal this
JW> JW> week but the macro models of the markets have yet to flash a sell signal.
JW> JW> The most likely reversal days appear to be Wednesday or Thursday.
JW> JW> To get an opinion of the magnitude of the decline, I look at the individual
JW> JW> stocks. The more stocks in an index contributing to the reversal, the
JW> JW> greater it will be. Those of you following Clyde's work on Hurst channels
JW> JW> realize that the chance of a reversal is greatest at the boundaries of the
JW> JW> channel. I measure channel location along with forecast signals to get a
JW> JW> feel for the extent of an index move. Yesterday, 29 of the NDX 100 stocks
JW> JW> were at a channel boundary and near a reversal - today's up move resulted
JW> JW> in 50 of the 100 being in reversal territory.
JW> JW> I expect some rounding action in the next two days with more stocks entering
JW> JW> their time and price limits for a reversal so the decline could be
JW> JW> substantial.
JW> JW> I have also exited fund positions and began to enter on the short side.
JW> JW> I urge caution this week.
JW> JW> Jim White
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