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impressive, leaves the pros in the dust. good luck for 2022 !
BTW how was 2021 on that front?
oh man, best of luck ! I see you're chasing 2 points moves on SPY with options, use lagging indicators, eventually allocating small capital - We all believe in magic...
Unless, wait - what do you call big coins?
So in which camp are we at the end, what determines prices - is the mega secret algo / or is the demand-supply volume competing for shares?
I must admit the wording got my attention, I've always translated "pressure" in term of volume, sell vs buy around certain price X.
But it seems there are some buyers out there who don't really want to buy, or at least not as much as the sellers who really want to sell. Correct?
If I get you correctly ... On one side you're saying the following affect(ed) the stock prices in '20-'21: the Fed pumping actions, the Gov stimulus plan, the resulting inflation.
And on the other, that we will return to ma(200) because we visited that level every +-2 years.
So
. will the above factors stop to influence the market, or do you assume some of the factors will disappear?
. the ma200 is a rolling average - i.e. if the price flattens or slightly drops, even for an extended period, ma200 continue to raise. How fast ma200 will turn, it all depends on the magnitude of said changes.
But in any case - the level where sp500 eventually meets ma200, wouldn't that be different of the ma200 level of today?
The line between corporate finance theory and a personal opinion becomes blurry.
I stop here, google Damodaran corporate finance - he provides an excellent explanation of those concepts. It was the essence of my post.
I've read the article twice ... I get the effect of low interest rates is that corporates are using bonds and/or bank loans to finance their business - then deposit their cash from operations back to banks (instead of reinvesting back into their business).
I understand these cycles repeat themselves and banks are at some extend lenders and keepers of cash deposits, with a bigger weight on the 2nd.
Hence, the preferred way of corporate financing must be through issuing bonds.
I fail to see the implications, e.g why is this good/or bad - and for who.
Whatever the method, there is a cost of financing for a company, issuing bonds/or getting loans is not a zero sum game.
So what is different recently, that make bonds the favorite financing vehicle? In spite of a low interest rate ...
On the same topic - For intraday timeframes including hourly and above, the 7h30 length of the trading day can't be split in equal candles. So you have a short candle somewhere in the charts - but there is no standard where to have it, at the beginning of the day, at the end. It depends on the data provider.
As a result, charts from different providers won't agree on Open and Close values either, as they can be skewed in time to address this problem. Is this an issue? - I leave the conclusion to you
insert-text-here
I don't know if hyperinflation is coming or not, but I question the path you follow to the conclusion.
We discussed it before, the demand increase (hence price increase of final product) does produce inflation - however this inflation has low unemployment, more taxes for the gov due to more consumption. Above all, it can be controlled by the interest rate. I am not sure how hyper will go, is my guess as worthy as yours ...
see those guys
why not good?
As rough numbers they are not that useful to look at.
Typically you want to look at ratios (to equity, assets, ebidta, etc), historical evolution of said ratios, and their industry peers' ratios.
With the same "algorithm", you missed at least 3-4 other "relevant" lines, hence selecting the evidence... 414, 416, 408 - every 2 points basically.
IMO the predictive value of those lines is in the eye of the beholder and it only appears with striking clarity after the action.
Fine, if that's your conclusion. I mentioned the elements at which some other people look at, to reach (maybe different) conclusions.
When you look at price increases you can have multiple causes (a) shortage of supply, (b) increase of demand, (c) increase of production cost reflected in product price.
Another aspect, when talking about "increases" is the choice of your "benchmark" for comparison. If the benchmark is a reference value taken back a fixed time period (Qtr, 1Y, etc), the increase may be just corrective/ maybe it's a counter-move.
The same reason why people look at MA, to filter out noise...
huh? 200 of what time, daily? or 1H ?
I don't understand what's the point of paying above/below "average"...
If the "average" is the MA200 on daily - Yes, some folks buy when the current price is above MA200 daily.
And those who don't were in the market only 6-7 months in 10 years. Their funds, eaten by inflation?
Here a Q, can you explain why for so long (May'2020 ?) the "paid price" is above the "average" - and yet the "average" is calculated on "paid price", supposedly being the "middle line"?
Hmmm, time for thinking ...
The "price paid" over a day has a zillion of data points corresponding to the zillion of transactions, that all settle based on supply and demand. Of *that transaction, and on *that exchange.
There are different exchanges, each of them with a separate price - which you don't see because Robinhood does the shopping for you.
Bottom line - it's a closing price that goes in the MA function.
I would open some articles, for free.
What was the "price paid" yesterday, BTW ?
So that one that gets with the rest of the other 199 data points needed for MA200.
Man, can you check your sources.
There is no such thing as "the price paid", it's either open/high/low/close - with those measurements taken with certain time resolution (from 1 sec to 3 months).
So if you do a MA200 on 15 min time frame - you get a mathematical average of "closing" price of last 15 min candles, 200 of them averaged out.
If your time is "daily", MA200 - you get the last 200 trading days "close" price, averaged out (sum them, divide by 200)
No one keeps track of the "price paid", in any of the indicators, they only use OHLC open/high/low/close.
. OHLC, recorded how many times a day?
. Well, depends on the timeframe you chose.
And note there is no volume in the MA calculation. It's just a snapshot of the price at the end of the day.
In MA, "days" contribute to MA equally, regardless of volume. Which tells you how accurately this reflects the "average" since "N" can vary widely between periods of the year.
VWAP attempts to correct this, the closing price is "weighted" by the volume of that day. Nowhere as popular as MA, maybe too complex to understand... what is weight, after all
def
nowhat,
I did not intend a battle of charts, you might have missed the point.
Whatever line you're showing (last one) is not that relevant, since there will be another line replacing it.
Of course you don't show the previous 6 lines, but what's the relevance of the 7th, as it's just "business as usual".
ciao
I still don't get why you draw 1 line - when in fact there are at least 7 ... if you are consistent with your method, that is
I've redone my chart, it's when you switch time frames that lines do not align at hair distance.
So - 7 trend lines violated by SPY, and it continues to do so ... isn't that something. It reminds me of SnowWhite and the dwarfs
chart showing how serious things are
OMG, already 2 violations going towards the 3rd. all in one day.
bad-omen-chart
I would go for the fill, maybe for different reasons. A 200 points jump in 10 days is 100 points per week for SPX. Not that is unheard off.
Now, how cool is that, in 2.5 mnts (10 weeks) to have SPX 5000 ... and so on by August to open champaign at 6K.
So I would say, maybe is in the law of things, to relax that trendline to a say, more amenable growth average - if the source reference point that defines the growth stays the same (25 March, SPY=384).
What do you think? No charts this time
And with all bad things we have on Earth, inertia or friction might play either way on that drop and SPX can go a little lower than the magnet, or higher. But indeed it might be the gap magnet, the real cause of the drop.
Timing also, 60% of all years April is a up month. So ... does it start now, or later?
I would go for the magnet, at some point. Filling, going through, or not touching ... I am not so sure yet.
I suggest new drawing, better reflecting the situation.
Technically, no - it didn't really gap "at the line" but somewhere close enough to make the story credible.
link
I see you switched timeframes now from multi-year to 1h or might be 30min.
Now, if you also extend a bit your period of observation (zoom out) from the few days to say 4x few_days - I let you discover the relevance of those trendlines, because I don't see it.
After 2-3 touch points ok, sometimes 4 or 5 depending on the timeframe, a line is violated and another line replaces it as "the trend".
Does it mean that, once pierced to down side, we crash?
Does it mean that once pierced up, we keep going up?
Does it mean we keep bouncing on it?
To all of these, I doubt ... (see proof below)
So what is the relevance of piercing of the so called trendline? Other than another line replaces the previous, sometimes with a reversal and sometimes without - can't say.
In case you want to hear, when you professionally draw support trendline it's most of times a regression line over a cloud of points that you draw, by not doing the math... :)
The start point(of that regression line) is a significant low and the last point being, well, the last price of SPY.
As with any regression line, as soon as you change these points (i.e there is a new SPY price addition to the points already considered), sometimes the change to the regression line is small or zero or invisible, and sometimes it becomes visible and you end up with a different line .
Do the points (future SPY prices) stick close to the line?
No... and this is fundamental... it's the line that sticks to the points, by definition.
It's the same with any average, SMA for instance. You calculate MA on the price, and not the other way around. It's like saying you'll continue to drive your car at 60mph in spite of traffic jams, because that's the average you see on the gauge.
You want to see what a regression line gives on the chart you have shown? See link#2
That's the middle line in the colored area... Isn't that close to your trendline (black) when you shift it down by the amount of distance between max/lows and the regression line.
charts and clonks
regression
Let's have more fun by looking at different time frames ... which in this scenario translates into inclusion of more points to draw a regression line. What do we have? Oh, just different values.
1H->daily
What does the (daily) chart say? -> It says that if we go lower than 390 - 'we crash and burn. Really? - Look at the 2x previous piercing, there was no crash and burn.
However .... lat's find some correlation now. Right below the proof that piercing leads to crash and burn. Irrevocably?
26-Feb-2020
I found it, I agree, they can.
link
Don't know the word you mention, man. Besides bouncing, is it linked to trading?
The RLC filter calculation done by the first blonde lady seems correct, but the rest looks ambiguous to me.
Is there an expectation that we bounce off that line? Only the balls bounce, anyways.
What makes you say that, I mean your "belief" is based on what ?
Because I find it myself quite unlikely that he "knew what was going on" and stirred the board in a direction ... which direction BTW?
By your own words he was changing direction often.
He had tons of posts where you could see he lost money, as a lot of his buys/sells were posted almost real time. How many buys and sells you see posted here? How many he did, and NOT post? - I don't know.
I certainly miss his posts - a lost oppty to understand how one option player mind works. He provided a level of detail that went beyond "I bought puts".
The ladder strategy of piling up depending on the market action was v interesting to watch, as well as how he committed the funds - at least for those who understood what he was doing.
Such a top 1% option player he was
Too bad he was so short tempered that he got kicked out by the human resource department.
I don't get the significance of your clonks, man. You switch between time frames like nothing, jumping from 20 years to a 20 week view.
Here one example - 2020 was a storm in a glass of water. And if you play by that trendline, we'll be bullish for a long time.
if you get familiar with the paradox of the bald man - it's a little bit what I am highlighting here. link
The 2nd image is showing the last 5 lines counting down from 390 every 10 points, showing the significance of "390". If you had that many touch points on a oblique trendline, that was supposed to show support and clonks. Except here these numbers are just picked out of thin air, just with a zero at the end so they look pretty.
img1
img2
It happens - when confusing "correlation" and "causality".
By saying 'jump' to a grasshopper after removing his legs, we noticed his hearing was seriously impacted by the amputation.
NW I was raising multiple points (and thank you for responding):
. "trendline" is in the eye of the beholder, i.e. how you draw it (see line 1 vs 2, 4.5Y rather than 5.5Y)
. the "breach/no breach" depends on the above line. So, it can be a non-event ...
. "support" is in the eye of the beholder. There are at least 3 other levels providing "visual support on chart" - before 1.20 (blue lines)
So we can easily say "in the past 5 years, we've seen this type of drop 3 times" or "it's the biggest drop in 2.5Y" (A,B,C).
The wow-factor would be different than "a breach of 8-years long trendline". Or not?
Hmmm, not that convincing.
My point was that the support line for USCAD can be anywhere above 1.25 and not only at 1.20. Did it fracture your line, of course. Is it a big deal, maybe.
Does it have to go now all the way down to 1.20 for a reversal to take place - who knows?
So I've asked you to defend - why is a big deal (ok, trendline breach), and why it has to go that low (I still don't have an answer of why it can't go as low as 1.28, and then at 1.25, etc ....
Hmm, I though so...
But you see .. you drew the wrong trend line - it ignored significant bottoms that would have changed its slope. So the violating becomes non-violating.
I've sent a chart yesterday ... here below.
The 12 years low is lower than the 8 years low - so why do we have to take the 8yrs low as reference?
That's a sound judgement USD ...
I am not a rocket scientist and I wonder why all my rockets crashed in the back of the garden - I swear they all have pointy heads.
If compulsory, you've got them wrong, man
See my other msg w/chart, it's pretty big.
That's the trend line ... compulsory !
this time with a link. what's wrong with my chart?
or link
NW, I tend to ignore charts that prove anything and predict accordingly. Deciding which lows/highs are to be connected is quite arbitrary, hence this adjective follows the so called trend lines.
But I do agree, if your time frame is the 10day/1min chart - the dollar is crashing, badly even, and it takes everybody with it, really bad.
Now, what makes you think the economy won't recover and take the dollar with it, at least in the fullness of time ?
I guess this is the crux of the debate - did the black swan hit USD already and irremediably, or there is some hope that it only weakened it temporarily? Ah, Japan, 1980, the path of no return. similar chart. or was it 1929, I can't remember.
If you look past 3-4 years, we had this type of crash many times before.
Why don't we go back before 2010-2005, in a daily or weekly, and find a trend-line with a smaller slope, by joining meaningful lows? I know you can ...
And a lot of people will feel better the whole day, knowing TA is there to support their conclusion (USD is weak temporarily but no trendline has been broken yet).
with a link this time
With all respect, there is a difference between finding specific instances where predictions prove right, and finding that predictions prove correct on average.
The 2nd require keeping a tab on total number of predictions and classify each of them - while the first doesn't.
On the same topic (counting all evidence) - it's a long read but maybe worth it - quite few research papers available on the statistical merit of most popular TA constructs: S/R, MA cross, oscillators. etc.You can see for yourself how reliable these signals are.
"Statistical" means - counting all the evidence, over few years period of time.
TA means "technical", means "mechanical", means "method".
Don't you think the grey powers would make an absolute killing in the market with TA based predictions... if they were reliable?
Think of:
- the processing power of data centers today (how many servers you think Goldman Sachs might have...?)
- the advance in parallel processing (i.e. make them all work together for a common goal)
- the relative simplicity of the job involved
. is calculating S/R, or MA, or stoch oscillator - black magic?
. is it black magic applying any combination of signals to the past (say in 2000-2010), make a prediction and, check what the prediction gave in period until 2019 ? It's called backtesting ...
And yet, the grey powers don't make a killing.
They prefer to spend money on people manipulating every candle of each of 500 stocks by placing bogus trades such as SPX gets where "they" want it to be. And from there, SPY just follows ...
A little read about confirmation bias/selective evidence might clarify the concept I am highlighting in the beginning.