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Thursday, October 14, 2010


I'd like to say thank you to those who have recently acknowledged my research, and the information I present every day. I'll admit I often feel quite aloof to sharing my analysis, but then I remember what it does for me to write about my analysis. It's something you will only realize once you begin to do it.

I write many of my own indicators, but I do not share the algorithms for several of these.
The Market's Tell, Cruiser, HisNobs, Oracle of Delphi, Smoothy, KumoBobsStochastics, HairBrain and Wingnut, are the few that I keep proprietary. I have spent thousands of hours writing these, and they set my site apart.

But recently I completed this one . The Bollinger Bands, Keltner Channels, and Moving Averages are common indicators used by many analysts, but the way I've combined them on my trading platform is unique to my site.

I'm pretty happy with the way this chart conveys the markets momentum, and range so I thought I would explain what you are seeing. (See the comments I've made on the chart). It's available by request.

Often you will see across the top of my charts, a summary of some indicators. These indicators could also be plotted, but at some point my screen becomes too confusing so I've placed the essences of the indicators in a message on the top.

TheMarketsTell is one of my most highly prized indicators. I'll only tell you it uses Price, Volume and standard deviation to calculate the turning points of the market with great accuracy. In the chart below TheMarketsTell has colored the last bar red, indicating a reversal is quite likely. The Gray bars indicate areas of change and indecision.

Next is a warning signal from Smoothy. The names of my indicators do not reflect the internal algorithms as it is my wish to keep these secret, but the message tells of a market that has begun to burn too hot and move too quickly. This signal is also indicated by the double yellow lines on the chart below. This is similar to the red line on on the Bollinger Bands.

Smoothy also tells when the momentum is accelerating. There are times when it will warn of acceleration, and at the same time say the market is stalling. This generally comes before and at the level of consolidation or just prior to a turning point

Another one of my favorite indicators is HisNobs. My grandfather, and I used to play Cribbage, and this is my way of remembering him. HisNobs uses the physics formula for mechanical inertia.

Most of my studies have options to control price color for easy detection, so I place a notice of which one is in control of the bar colors at the top the the graph.

In the chart below you will also see the ADX, this message is my way of testing a theory I'm currently researching.

You will also see a small shadow from the Keltner band behind the Bollinger band. When it shows up there will be a high probability of a swift, and volatile move as is the case here. Squeeze is another study I often present that shows the same thing.

The Red line on the Bollinger Band indicates that Price has exceeded the 2 times deviation of the 20 bar moving average. Price can always be expected to return to the mean, but quite often it will shoot past to the opposite 2X deviation after having just broken out of the other side.

The MOBO (short for Momentum) is a 0.8 deviation of a 10 bar moving average. Price often respects the boundary of this deviation, and when it passes above or below, it is signaling a strong momentum, and is generally a good signal to buy or sell. In the chart below the range of this 0.8 deviation is from 1171.14 to 1181.3.

So as you can see, there is a lot of information presented on just this chart alone.

Some of my other studies such as DDF, MoneySpy, BubbleBoy and Darvas Box to name just a few are available by request.

I would like to say each of your indicators should be based on different algorithms, or else they will follow each other, and when it comes to trading - indicators can be a lure. Trading is 90% psychological and 10% science.

I recently read a long list of advice from Avery T. Horton, JR. and will have to quote some of his many truisms from time to time. Here is one I liked. "Dream big dreams and think tall. Very few people set goals too high. A man becomes what he thinks about all day long." and
Simple is as simple does. Hey, that's not Avery, that's Forest Gump ;-) But in the end keeping it simple can be best.

This Blog has only informational, and educational purpose, and does not represent a proposal for buying or selling contracts, equities or currency.

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