AAPL, AIG, SBUX and SP500

Let me to present for this venerable forum few samples of how to use SG-analysis to understand market processes.
Take a look on three stocks and wide market index from my point of view.

In a few words SG-analysis is based on multiscale presentations of time-series data that allow to understand price changes in terms of natural channels, simple oscillations and special configurations.

Starting with AAPL (stocks have been chosen somehow)

A "logical" question: is it a time to short it? reasonable answer is: no, it isn't a time to short because of: upside price flow is strong enough and there are no any sign of destabilization;
may be a small cloud at scale 1: the amplitude is slightly increasing but it is local in time;
looks like huge amplitude increase at scale 4 creates a huge potential for downside move; it's possible but not right now;
furthermore if you can control a position closely it is not a bad time to enter UP.
Sentences above is my "lyrics" to express my view. But it is not necessary to make the same conclusion. Analysis is clear, decision is definite but logic is fuzzy

more charts can be found here
http://sganalysis.com/2012/04/03/aapl-aig-sbux-and-sp500/
and around

thank you for your attention,
Sergei

 

light grude OIL _ Apr04

it is oil, an upside flow at 4th scale is wide but stable, although there are faint signs of destabilization of the flow up to the level 2 (increase in amplitude = AI), but this do not cause a strong fear
and the configuration on the scale 4 is also the AI with great quality that does not indicate a sustainable process;
stabilization of the flow is difficult to imagine but it is possible, well, let's see,
the "diagnosis" for now is a steady growth;

for practical use: price flow means that price is changing inside natural (w/o st.dev. and other artificial things) channel and somehow is filling it
so you may calculate parameters of the changes and get answer for the most important question: "what's going on now?"
for example, for OIL now price are moving from the upper side of the (main) channel at scale 4 to the lower side;

 

(sorry for repeating the post instead of editing it)

it is oil, an upside flow at 4th scale is wide but stable, although there are faint signs of destabilization of the flow up to the level 2 (increase in amplitude = AI), but this do not cause a strong fear
and the configuration on the scale 4 is also the AI with great quality that does not indicate a sustainable process;
stabilization of the flow is difficult to imagine but it is possible, well, let's see,
the "diagnosis" for now is a steady growth;

for practical use: "price flow" means that price is changing inside natural channel and somehow is filling it (natural means: w/o st.dev and other artificial far-fetched methods);
so you may calculate parameters of the changes and get answer for the most important question: "what's going on now?"
for example, for OIL now price are moving from the upper side of the (main) channel at scale 4 to the lower side;
and now you have to answer the only one "simple" D) question: is there any flow that you are ready and able (!) to follow for

 

S&P 500: scale 4 shows: 1. abnormally high speed up with acceleration, 2. breakout in the main direction and 3. very narrow channel – everything are the signs of crazy buying market; and there are no clear signs of instability;
the end of this strong upward flow will be after breakout of the configuration at scale 2 and higher;
what will be after that – we will see soon (“soon” in terms of PFT may take a long time but it obviously be and will take days or more probably weeks).

That happened today is still inside the main flow and is not dangerously yet but any rally - a nervous time.

 

S&P 500: scale 4 shows: 1. abnormally high speed up with acceleration, 2. breakout in the main direction and 3. very narrow channel – everything are the signs of crazy buying market; and there are no clear signs of instability;
the end of this strong upward flow will be after breakout of the configuration at scale 2 and higher;
what will be after that – we will see soon (“soon” in terms of PFT may take a long time but it obviously be and will take days or more probably weeks).

What happened today is still inside the main flow and is not dangerously yet but any rally is a very nervous time.
And the only thing that we know for sure: it will be very big and clear announcement about the rally's end. But most participants will ignore it, as usual

 

can't leave it without attention: AIG - my favorite for now

favorite not only because it follow the Theory (it's not unusual for non-perturbed processes) but because it clearly shows the superposition of the oscillations at the different scales: Amplitude Decrease with breakout "forward" at scale 1 combined with strong AI at scale 2 actually together create the stable flow at scale 4. Excellent!

But we have to watch AI at scale 2: there is the Rule: do not ignore AI and do not stay against it. Of course all rules are based on fuzzy logic but decision is clearly definite.

 

//I will use Price Flow Analysis or PFA instead of SG-Analysis to be different in search: looks like "s.g.analysis" and the similar are used already//

so, that is the interesting and important in EURUSD:
1. not ideal but definite direction at scale 4: down and even configuration has "mean line" (bisector) down;
2. let's check: how stable is this down flow?
scale 3 explains us why at scale 4 channel doesn't look ideal:
a slope of mean line of the configuration is just slightly down and we can expect breakout down "soon";
3. at scale 2-3 obviously the most important flow is strong and narrow flow down;
recommendation is as usual : to follow the strong flow if you can control your position closely enough

 

RURUSD - possible scenario
10 days ago first forecast was created and now is close to be confirmed,
but situation is more interesting because of all important scales have clear illustrative configurations accenting the basics of the PFT
take a closer look:

scale 4 - Amplitude Increase with flow down near possible reversal

scale 3 - configuration "crane" (highlited by green tangent) has come to the logical end: breakout of the last tangent and is ready to show the projected speed (must be soon)

scale 2 - shows how to increase details do not adds information about the process: we see almost the same picture as at scale 3 and more closer does not mean "better"

scale 1 - gives us inside structure of the oscillations at scale 3 and sharp clear overflow from configuration "AmIn" to "AmDec", i.e. from destabilization to stabilization through u-turn

for better understanding of multiscale analysis (the basics of PFA) the same zones at different scale are marked by rectangulars with same color

 

http://sganalysis.com/2012/04/07/striking-pictures-from-the-market

page has been got out of the dust in the archives and translated especially for this Forum members

just few charts didn't included in the paper

thank you for interest

 

Why do I think PF-Analysis can help to understand and to make better decision?
To answer this question we first have to answer: what does not allow to any person to make right decision?
Everybody knows that there are a looooot of reasons, but my answer: the most important is - a delay. The Dramatic Delay (DD ) appears to be a shadow for any person's action on the market.

Leave the 21 sources of the DD (just saying that DD is included in the nature of the exchange and any other noisy data) and find out how PFA can decrease it.

Do not pay attention to attempts to predict the market: it's not helpful and for many people it is very dangerous: they easily become the blind slave of their own prediction.

Let's return to the PFA and the basic purpose of the PFT: honestly answer to the question: what is going on now?

PFT gives us the important addition to the question saying: "what is going on at that particular scale now?" And allows to choose the main and the secondary scales of the process (MS and SS).

For RURUSD scale 4 was choosed as the MS and scale 3 as SS while scale 1 and 2 are supporting scales for scale 3. Configuration at scale 3 (called "crane") shows us very possible turn up of bisector at the next turn up of the channel. It means that if it will happen we will see at scale 3 turn up of the channel of scale 4 before (!) it could been seen at scale 4 charts. It gives us an advantage and decreases our delay if we decide to enter in the channel moving up.

In other words" the PFA at Secondary Scale allow us to get information about that is going on at Main Scale before it become confirmed there.

For RURUSD this point of unconfirmed turn up is the point to exit from down channel and 1st risky point to enter up.

next posts will be about "how to enter in the channel" and about another advantages which can be taken from applying of the PFT