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Zeev et al,
There is another view of sentiment on the equity option front that might be worth keeping an eye on and that is the International Securities Exchange (ISE) Sentiment Index (ISEE).
http://www.iseoptions.com/marketplace/statistics/sentiment_index.asp
The ISE, as it states, is the largest equity options exchange in the world. Their sentiment index, the ISEE, is based on the following:
1) An equity option based index
2) It is a call/put ratio (c/p * 100)
• < 100 = higher puts
• 100 equilibrium
• > 100 = higher calls
3) It is based on calls and puts purchased opening long positions (no position closing transactions)
4) It claims to use only option investor purchases with NO market marker, broker or other specialist transactions
I don’t know if this will make it a cleaner number, but if as advertised it filters out the funny stuff it may be worth following.
In comparison to the traditional p/c number, the ISEE did not hit any earth shattering extremes this week. It actually hit a noticeable local low on 5/11 (82), which was the lowest reading since the March low last year (76). So far, both those index lows look like darn good market turning points. It also called the Jan 04 top as well, 304 on 1/20 (3 times as many calls).
Unfortunately, it has a very short history to work with (only goes back to August 02), so it’s hard to start shaking in your boots when it nears some historical low. Its lowest reading ever was 60 back in Oct 02. Yes, according to the ISEE, put buying really can exceed call buying (ISEE<100) on a basis that does not suggest the end is nigh.
Also, for comparison’s sake, the traditional p/c number showed increasing put buying throughout the day on Fri whereas the ISEE showed marginally higher call buying.
I follow it in Excel and keep a few ma’s along with one derivative, the ISEE divided by the NAS. This number actually was an all-time low on the 11th. In other words, the ISEE reading relative to the NAS reading on the 11th was as low as that ratio has ever been in its brief history. That was interesting. See the third chart below.
All the best,
Stiv
When in doubt, it’s best to ask smart people. Has anyone on this august board looked into the ISEE indicator. I first read about it in Barron’s in a Dec 1st article. It may or may not address some of the fuzziness in the p/c ratio. The ISEE is basically a c/p ratio that claims to factor out “transactions made by market makers and firms”.
The brief description below is from the ISE website at
http://www.iseoptions.com/marketplace/statistics/sentiment_index.asp
The ISE Sentiment Index (ISEE) is designed to show how investors view stock prices. The ISEE only measures opening long customer transactions on ISE. Transactions made by market makers and firms are not included in ISEE because they are not considered representative of market sentiment due to the often specialized nature of those transactions. Customer transactions, meanwhile, are often thought to best represent market sentiment because customers, which include individual investors, often buy call and put options to express their sentiment toward a particular stock.
Every time an investor buys an opening long call or an opening long put on the ISE, ISEE captures that transaction and processes it as part of a broader algorithm that measures buying activity within ISE, the world’s largest equity options market. By collating the buying decisions of options investors (persons other than broker-dealers), it may be possible to gain a better understanding of marketplace trends, which can help refine investment decisions.
ISEE is computed by dividing opening long call options bought by customers by opening long put options bought by customers.
The index is then expressed as above 100 or below 100
ISEE > 100
More customers have opened long call options than put options. Call options increase in value when the underlying stock price increases.
ISEE < 100
More customers have opened long put options than call options. Put options increase in value when the underlying stock price decreases.
I’ve just started looking at it, and it appears to have hit an extreme that looks problematic. The 304 reading (3 times as many calls purchased) on Tuesday looks troublesome.
Based on the chart I have, the peaks and extremes appear more ominous if they occur when the short term trend for the ISEE is above the longer term trend..in the attached chart when the 10-day sma is above the 34-day sma (arbitrary choices on my part). In other words, a spike up in call buying when the short term trend in call buying is already high.
I can’t point to any other discussions of the merit of the indicator.
TIA for any input. It’s off to work I go. Give ‘em hell today!
Stiv
Greetings all! Hope everyone had a great Thanksgiving and got properly stuffed!
Doing a little prospecting tonight...got inspired by the Lions win today, I guess.
Looking at NLS and JNJ. These are not finely tuned, so I would think they can be pushed a bit more
How about some gold for this week? In case the images flicker out, I'm looking at DROOOY and GG, but I'm sure many hit buy signals Friday.
Hi Keith!
How are you, sir?
I haven't looked closely at Pioneer's FA, but I wouldn't think it a hidden beauty by any means.
http://www.quicken.com/investments/stats/?p=PXD&tag=1
They're not sitting on a pile of money and have some bills to pay. On the other hand, they had nice one-year growth and they seem to think (company news) their recent projects hold great promise.
I don't follow the sector closely and find it difficult to sift through the countless companies within it. The chart on PXD caught my eye doing a 'Graphs In Bulk' at ClearStation.
On BSTE, I never pursued. I had an old xd setup that I can't find anymore. I still have it on my CS Watch List...and I watched it every day last week as the bow broke and cradle fell.
Regards,
Steve
I got into PXD a week or so ago. It has a nice roll to it. Probably not enough action for the techsters in the crowd, but I'm attracted to the slow mo. And I love how x-dev can rack up some serious gains compared to a neutral buy and hold. My override on this setup would be to wait for the second or third buy signal and then pounce.
"Pioneer Natural Resources is an independent oil & gas exploration and production company with operations in the United States, South Africa, Argentina and Canada. For the 6 months ended 6/30/03, revenues rose 84% to $626.6M. Net income before accouning change rose from $9.2M to $146M.Revenues reflect higher production levels of natural gas and oil. Earnings also benefited from lower operating expenses as a percentage of sales."
Fundamental Data
P/E Ratio 16.25
Beta 0.60
Float (mil) 116.70 Shares
Outstanding (mil) 117.84
Earnings Per Share (MRQ) 0.65
Market Capitalization (mil) $2,955.40
Price/Book Value (MRQ) 2.09
Book Value (mil) 12.00
Dividend Rate 0.00
Yield % NA
Last Split Date NA
Last Split Factor 0.00
EMA...got out of 75% of my position on lack of an early follow through. Will hold a small position to see if the next leg up materializes.
stiv
deepster,
Risky, but I'm holding for a serious break of 2 in the short term. One more jump tomorrow would be fine by me.
stiv
EMA looking strong today! Which one of you sages saw that one coming? Many thanks!
Stiv
Happy Birthday Dewd! And thanks for the many happy returns!
Stiv
JimBob,
Congrats and well done! That's a great feeling to watch it happening in your own account.
Hope you don't mind, but I added a new member (VLNK) into the 1000% club. Don't change any setting on this even a fraction, or the percentage disappears before your eyes.
Earnings were out today...and they didn't suck as bad as last quarter/year. Hence, it is showing a pulse the last couple of days.
Regards,
Stiv
Thanks for posting, Myst. I've been graphics hosting compromised the last 2 weeks.
Stiv
deepster,
I had a similar problem which manifested itself with individual files as opposed to folders. For some UNKNOWN reason, when I had copied some files to another folder, they became read only. I did find a fix though, if you boot into safe mode, then you can reset your security/file sharing settings.
That was the fix for the Home edition, XP Pro I think is different. Try reading the following site which I think was one that I looked at when I had the problem. It talks about not being able to move or delete a file (my version of the problem). It should work for folders.
http://www.powerquest.com/support/primus/id3541.cfm
Best,
Stiv
Greetings all!
JDSU caught my eye today. Anyone following? Any better setups?
Myst,
Any chance that you have the printer connected to a scanner first? I spent one particularly idiotic hour trying to fix a 'printer' problem wherein it was connected to the scanner, but the scanner cable wasn't connected to the pc.
Stiv
Hey Lou! How are you faring in the blizzard? Absolutely incredible storm! The amounts are amazing. We received nary a flake back here in your old stomping grounds of Motown. That is, until this afternoon when the low pressure swirl started throwing squalls all the way back over Lake Erie for about an inch. I hate to say it but I'm a storm junkie, and I frequently flipped on the Weather Channel over the weekend for updates. Fierce beauty!
Thanks for the chart. I do think that the pause in the war momentum and the market's reaction on Friday should carry us for a rally here. Looks like Europe did some buying today.
Good Luck!
Stiv
Bob,
Glad you didn't wait up for me. Got any xxl's in the bunch? Put me on the list for the limited edition IHHBO version.
Haven't checked the board here in a while...thanks Original and Churak. If only my investments were as <g>ood.
stiv
Mojo,
Try this link for Yahoo. Use the symbol just as is listed (they utilize the ^ as the first character in all of their indices), and make sure you have the Yahoo Finance data source selected in XD.
http://finance.yahoo.com/m1?u
stiv
Sorry Lou,
I don't think you are allowed to make money with XDEV until it has been certifiably tested that it will make you money walking forwards and backwards at the same time
stiv
On a happier note, is everyone aware that probably the single greatest actress of our time ever to wear a white tank top in a movie about tornadoes is on tonight in that very movie on NBC? She also happens to be the single greatest actress ever to wear a rain-soaked t-shirt in a movie about an obsessive-compulsive writer and his misfit friends. Now that's entertainment!
stiv
aptus,
At the risk of dragging this out, and I don’t much follow the AIM board so I had to peek to see what the ruckus is about, I will make a couple of points.
Now, I don’t AIM, but I have tried to slog through AIM spreadsheets in the past…with the prompting and guidance of Myst I might add. I loved the investing idea not to mention the Excel challenge of it. In fact, I’ve traded more than a few spreadsheets with Myst over the past couple of years. He opened up the AIM trading approach to me and I tried to offer back a little Excel help. I’ll venture to say that Myst is not just the creator of XD, but if not an expert also very well-versed in AIM.
I have AIM derivative spreadsheets on various hard drives that I think are the some of the early beginnings of XD. I’ve always felt that XD is a direct offspring of AIM. No AIM, no XD. At the very least, I can tell you he has stayed up late many a night trying to tweak Safe amounts, Ad-safes, Advice amounts, and various formula inner workings of Portfolio Control in order to improve AIM returns. Most importantly was his idea to link these tweaks to price changes/trends.
This may be a small point of contention that you have, but AIM and XD are blood related. Furthermore, I don’t think that Portfolio Control separates AIM from XD.
And here’s where my AIM ignorance comes to the forefront (not to mention this excellent Tylenol with codeine), so please set me straight…you too, Myst. I think your main argument on the difference between the two is that PC and price determine trade signals in AIM, whereas XD doesn’t have a PC therefore price is a sole determinant of trade signals.
It seems to me, once you get past the offputting labels of Portfolio Control, Safe, Advice and all, that both really only use money available and price as the only determinants. Isn’t PC a result of original money invested that is subsequently adjusted depending on actual trades, with a different adjustment amount (tweak) whether it’s a buy or sell? Different tweaks lead to different results.
I imagine PC as ‘adjusted’ real cash in the account or hedged money available. XD uses actual (unhedged) money available. It's only the percentages of real cash that are different. I know that PC just keeps going up and thus drifts away from the actual cash in the account, but it still is a derivative of it. It just makes the math work a little harder to generate a trade signal.
While this hedge on real cash may offer some level of risk control, to me it seems an area where XD really outperforms. XD will be aggressive, even in a downtrend, to build returns. After looking at a number of comparative spreadsheets, I do think the bigger risk is to use AIM and do nothing but wait for a long climb back after a steep price drop (which may never happen) than to use XD and trade no matter the trend. Extreme price deviations are a blessing for a downwardly mobile stock.
Furthermore, both use the change in price as the other key factor to signal a trade. Price determines Stock Value, which is then compared to PC and then bring in Safes, Advices and Ad-Safes and such and a trade is signaled. In XD, price deviation from a moving average is the key comparison, if money is available a trade will be signaled (depending on an adjustable Buy/Sell multiple).
Again, I’m not an AIM expert but it seems to me there a number of variations out there that are efforts to tweak all the different ways to adjust PC and Safes and everything else in AIM to amplify returns. It seems to me that XD is one of those efforts and a particularly excellent one at that. Maybe the best!
Regards,
Steve
Hi bikeh,
Here is the setup that I have for VLNK for your reference:
stiv
Hey Myst...you getting snow-blasted out your way yet?
I'm seeing the same and hoping the setup is there for VLNK. If it runs from here, it will be the first time without bumping off of the lower xd band. Got my eyes open.
Ahhh, PUMA one of the quintessential bubble beauties from the good ol' days! Yeah, there's a bunch that are returning from the dead...
...check out MSCC, too!
Looking forward to the new 3.0. Great idea and great work (Yong!) on getting CCI loaded. The port features you described previously are going to be a huge addition!
stiv
NEOG hit on target today. An odd thing about thinly traded NEOG, it sometimes sees it's daily action right at the close. Today it was flat all the way and then popped eod. Seen it before.
RYVNX says it's time for a market turn:
Tried to squeeze BSTE a bit more...
stiv
Hi Keith,
Here's one that's been on my list for a long time. It's a money maker that is successful staying under the radar. Thinly traded but looks to be x-dev positive.
Cheers!
Steve
Hi kedew,
Here's one...
Hi Tom,
As expected, VLNK came back some yesterday. It's bad enough trying to play with the penny's, but trying to catch a parabolic top is even harder. I don't think Myst and Yong have it quite ready for day trades.
I think it is one of the strengths of x-dev, as opposed to (my limited knowledge of) AIM, that it will get you fully in or out of a position in order to maximize total return. It only will hedge the bet so far or so long before committing everything one way or another. You either have to wait for the next action to occur or override the system to take advantage of an extreme trend or significant trend change.
As Myst described, if the system is all cash and a trend change occurs to the upside, one should consider restarting the position at a partial vest.
While x-dev is programmed to take action at the extremes, it typically won't try to handle the ultimate extremes. It will only do so at the expense of total return. It just won't pay. And since the extreme extreme is usually short lived, they usually revert back closer to the mean. Unless of course it is a total collapse.
Now, you can make x-dev go for the ultimate tops and bottoms, but it will sacrifice significant performance to capture them. One way to program x-dev is to open up the bands to hit the highest highs and lowest lows. This usually is not the most profitable set up, since it will ignore the real profit potential territory which is inside those extreme solitary bands.
Another way to try to hit the very tops and bottoms is to adjust the buy and sell multiples. To illustrate with VLNK, if I adjust the sell multiple, I can have x-dev be relatively more or less aggressive when selling a position. The higher the multiple, the more aggressive it will be - the sells happen quicker and at higher share amounts. The lower the multiple, the slower the sells happen and with fewer share amounts.
So with VLNK, if I lower the sell multiple, I can stay in a position longer and try to catch the blow-off top. But as you will see, you end up missing the profit on trades that could have happened more frequently further inside the bands.
To illustrate, here are a few charts that show different sell multiples for VLNK, all else being equal. Of course, every issue is different, but for VLNK, the aggressive seller will get the profits. Note how with a sell multiple of 1, I can get that extra 40% move on the last trade, but I would have to give up nearly everything else from earlier trades to do so.
Sorry for the bandwidth feast...
Sell Multiple = 13
Sell Multiple = 10
Sell Multiple = 5
Sell Multiple = 2
Sell Multiple = 1
Now to clarify, and here's the ironic part of everything I just said, I am not yet trading VLNK mechanically with x-dev. But I have used it exclusively on the buy side for some very key trading decisions to average down my original pre-xd, poorly timed purchase.
Because this is a high risk and relatively low dollar amount penny play, I am looking for a significant trend change to the upside. One that will generate those dreamy pie in the sky returns of a couple of years ago. In essence, I am trying to capture that extra 40% by overriding the system. Exactly what I just argued against doing because you can't beat the x-dev system!!
Didn't I just say, "the aggressive seller will get the profits"? Doh! Someone please hit me on the head with the big xd hammer.
stiv
I sorta like this view!
stiv
Quahog...excellent! That's it!. That's exactly what it's screaming for. I had to abandon the thought of adding "Ay, there's the rub" because of an 80 character limit on the tagline. "Ay, there's the Hub"...perfect addition!...even though it still ends up on the cutting room floor.
Can't tell you anything about the second one you mention, but I do like the rhythm of it.
stiv
In homage to ‘I hubbed her brains out’ (my favorite, it definitely needs a bootleg t-shirt), here’s a variation:
I hubbed her brains out with my penetrating financial insight, and she blew me away with a firm grasp of the market.
And for other filler material:
InvestorsHub.com - For the latest word on the street
The word on the street is iHub
InvestorsHub.com – The talk of the town
InvestorsHub.com – Because your investments matter
When the analysts are done, the analysis begins, at iHub
InvestorsHub.com, where the markets are open for discussion all day long
Get the message at InvestorsHub.com
InvestorsHub.com - The center of financial attention
Get the message out, at InvestorsHub.com
InvestorsHub.com - To go long, to sell; To sell, perchance to short
(This really screams for ‘ay, there’s the rub’, but it’s too many characters)
stiv
And here I thought it was some important message in my MailBox...
iHub, therefore I am (I said that once to a guy at a race track, and he said I was putting Descartes before de-horse)
I think, therefore iHub
iHub, therefore I am an investor
Markets got you down? Need someone to talk to? InvestorsHub!
Who is Investor Shub?
Markets move and investors talk...at iHub
Q: Why did the investor cross the road?
A: Actually, that’s where he finally rolled to a stop at after jumping from the window
Investors Hub!
iHub, the investor community for the next century
Q: How many investors does it take to screw in a light bulb?
A: Don’t know, but you can see the light at InvestorsHub.com
Investors say the darndest things...at InvestorsHub.com
InvestorsHub - Market analysis and discussion that matters
InvestorsHub - Where investors meet
InvestorsHub - Where ideas happen
InvestorsHub - New ideas for today’s market
InvestorsHub - Intelligent discussion for today’s market
InvestorsHub - Where a really diverse bunch of incredibly intelligent and smart individuals gather to discuss and share ideas for profiting in today’s wacky financial markets
...Stiv
Hi Dambo, Myst
I would agree that otc stocks should be looked at differently and come with a few more caveats, doubts and suspicions; as in the markets, so with xd.
My biggest concerns are that the buy/sell signals in xd may not correlate well with the bid/ask games played in the otc market. Also, I'm wary of the sensitivity that changes in xd parameters can make on overall performance. Small tweaks can cause huge shifts.
Nonetheless, I am more than intrigued by VLNK, and have been building a position based on xd buy signals. I haven't yet traded it mechanically since I have sat on the most recent sell signals in the (typically otc absurd) hope of seeing multiple sells form on a breakout.
Stiv
David,
Loyd has the right solution for you. The drop-down 'Symbol' list is comprised of the symbols from the saved .xdv and .dat files in the 'X_Dev\Data' folder. If you delete the .xdv and .dat files in the 'Data' folder it will remove the symbols from the list. However, you will also lose your saved files and settings.
What I have done is to make a copy of the 'Data' folder and save it somewhere else outside of the 'X_Dev' folder. In my case, C:\Program Files\XdevData. I open and save .xdv files there.
However, each time you call for a symbol in the program, it will still automatically create a .dat file in the 'X_Dev\Data' folder. Consequently, the symbol will be back in the drop down list. You will still have to go back in the 'Data' folder and delete .dat files to keep the 'Symbol' list empty.
Is that clear as mud?
Of course, please do this only if you are comfortable working with folders and files this way. I wouldn't want anyone to be deleting or changing anything in the X_Dev setup that would cause program operating problems.
Note to Myst and Yong for future releases: I do find the 'Symbol' list of minimal value. The reason is that if you select one of the symbols, it uses whatever settings are already being used by the program. It would be more useful if by selecting a symbol it would actually open up the .xdv file itself with its own saved settings. Just a minor.
Happy Labor Day Weekend All!
Steve
Myst,
Happy Birthday Dewd!!
Another year in the books...and a pretty productive one for you I would say.
May your bands rise and fall to meet you, your multiples never deviate from the optimum, and many happy returns!
Thanks for all you've done!
Steve
Has anyone been working with XAU? Have any better settings? It's been advising to buy gold for the last few days. Today was the payoff. Seems to give some nice clean signals.
I'm not throwing my hat in this ring yet, but...
...here is some noodling wherein I wanted to look at the relationship (spread) between RYVYX and RYVNX. The chart below is the simple numerical difference of RYVYX minus RYVNX.
Interesting the 'extremes' it seemed to hit on 7/2/02 (-93.9), 9/21/01 (-91.6) and 4/4/01 (-72.2). Another sign of an intermediate bottom and a rally ahead?
So then, how about a concept of running an x-dev analysis on the spread between two stocks/funds where you would be long one and short the other, but based on the deviation from an sma you could weight them differently in your portfolio?
On the other hand, the idea hurts my head. Paticularly when the negative numbers start popping up in the sma and deviation calculations.
stiv