I was wondering if anyone ever used Vantage Point's intermarket analysis program (www.profittaker.com)? You pay a whopping $3000 for the program and then $995 for each market module. They claim it can forecast the market with 80% accuracy. Is it just hype? I do like the idea of intermarket analysis and I do that a lot myself, but does the program really work? If you've used it or if you know of someone who's used it, I appreciate your comments here. Thanks. stock.
Percentage winners says NOTHING about profits or a system. Go and get a demo and see for yourself. Testing intermarket relations is not a big thing. TS, WL all can do it. Regards
Volker, Thanks for the tip. But can you give me just some rough idea of how you can do it? Do you write a correlation program using $SPX, $TYX, $CRB, $EUR as variables? I'm not that technically savvy as far as writing computer programs is concerned. I'm sure Weath-lab, TS, and Amibroker, etc., can do it. But the problem is that for someone like myself who can only write simple TC2000 algorithms, this type of software seems to me to cater to an exclusive club of traders who have degrees in mathematics, computer science or engineering. At least that's the impression I have when I read through the messages posted in the Wealth-lab and Amibroker forum. All that technical discussion sounds really Greek to me, and it is unrealistic to expect every trader to get a degree or take a few courses in programming languages to start using those kinds of programs. I know you might not be sympathetic at all, since I assume you are well versed in programming languages. At any rate, I'm glad to know that Vantage Point is not the only answer to forecasting intermarket relations. Thanks. stock.
Well, I am not very good in programming codes as you might think, in fact I am more the "copy and paste" programmer. Anyway, you are right that WL (or any other software for that matter) would fullfill a task like intermarket correlation. It is not easy and it would take defenatly to long to explain it here. On the other hand I would not buy a software just because it makes things easy. If you need a software or system just as a decision support, then it is ok. But if you wanna trade it, following all the rules.... mmhh.... then I would ask for more proof. Do they have an open uncensored forum? Maybe if you have a concret idea people might help you programming it. In any way get the DEMO. Regards
I think intermarket analysis is one of those ideas that sounds great but doesn't work in real life. Let's look at one of the most obvious examples, the relationship between interest rates and stocks. Low rates are good for stocks right? So your system gets long the stock market when bonds or eurodollars rally. Ooops, now they are rallying because of flight to quality, stocks are getting killed. so much for that. How about the stock market versus the dollar. A rising stock market has pulled the dollar along, as investment flows have to converted into dollars. worked great for a few years in the bubble market, but then the dollar stayed strong even as the stock market tanked. Bottom line is just as Sarasota said. These relationships are not stable.
there is a bit more to intermarket analysis than the obvious - all markets have an inter-relationship, and have a level of deviation from the mean, which would allow arbitrage between the markets - but of course, the calcualtion of the mean, and the changing level of the mean is the key part to get right
AAA, I agree with you in part. I don't think the correlation between any two markets is 100%. Right now, just as you pointed out, even historically low rates can't seem get the stock market going. But you can't just look at the correlations between the bond and the stock market exclusively. You'll have to also look into, for example, the commodities market as well. Right now, if you look CLOSELY at the CRB index, it's rallied quite a bit. This is ALL because of the drought we've been experiencing: grain and corn prices have blown the index out of proportion. Industrial metals like copper aren't doing that great. Besides, you need to take into consideration global markets. Neither the Japanese market nor the Euro markets are doing that well. Once you take these other markets into consideration, you wouldn't go long the stock market simply because interest rates are low. In other words, intermarket relationships aren't one-to-one. It's one-to-many. If intermarket relationships were so unstable and chaotic, then there would be no point to study finance and economics. In order for financial and economic policy to work, there has to be some relationships amongst the markets. stock.
stockoptionist, I agree there are relationships that generally work out over time. Example, Fed cuts rates, generally the economy improves. But the question I was addressing is whether or not you can trade off these relationships. I think that is much more problematic.
Percentages themselves mean nothing ... Heck, I can easily predict the 5 day moving average tomorrow with 80% accuracy. I explored Neural Nets, Genetic Algorithms, and such for quite a while. I did get some good predictions of pricing bands ... probable highs and lows. Still not too useful for trading. Using trading systems recognizing price reaction work the best for me.