Odds Czar: Simple Biases in the Futures Markets 2006

Discussion in 'Journals' started by Art Collins, Jan 2, 2006.

  1. Art's futures biases for Oct. 9.

    A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.
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    We are now moving into the mid-month bearish timeframe for the indexes. The day-of-month is flipping to the short side, making the calendar biases unanimously bearish. We’re seeing several less-frequent-signals pointing south in the second box. It’s rare you get so many, particularly when they’re all in unanimous agreement. That would be more than enough bearish evidence if the either-or indicators were at least neutral. It turns out they’re solidly bearish as well.

    This could all be pointing to a perhaps short-lived move. The month of year turns positive when November hits. But if history is an indicator, you could get plenty of carnage before the turnaround. Crashes tend to be violent and quick. A November rally could therefore be right on schedule, albeit perhaps off significantly lower levels.
     
    #351     Oct 6, 2006
  2. Your lips to God's ears....:p
     
    #352     Oct 6, 2006
  3. richard rimes wrote

    Your lips to God's ears....

    remains to be seen richard. i suspect god is a perma-bull--just like cnbc.
     
    #353     Oct 7, 2006
  4. Art's futures biases for Oct. 10.

    A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.
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    There are two ways to look at today’s confounding action in the stock-related futures, aside from the fact that it was holiday-impacted. One, the market stubbornly rose in the face of fundamental bearishness, specifically, the Korean nuclear test. One reliable axiom is that you don’t argue with a market moving contrary to common sense—it’s right and you’re wrong, period. A second, somewhat opposite truth, however, is has it that there is an occasional lag time between an event and a corresponding market reaction. I choose to believe we’ll see the latter scenario play out simply because there are still primarily bearish numbers flashing across the CzarCharts. There was no corresponding bond or currency trade on Monday, so perhaps their resumed activity will make a difference. For Tuesday, I regard all three indexes as equally valid sell candidates.
     
    #354     Oct 9, 2006
  5. Art's futures biases for Oct. 11.

    A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.

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    You can’t ignore the fact that the index markets have been in stealth upward-creep mode and that there is no absolute reason why the trend should not continue for a while. Still, I’ll lightly commit according to the sell signals in the Russell on the opening. I’ll add on continued signs of weakness (minus 3 to 5 points and also today’s 74640 low being taken out). Re the "cry uncle" side--I would not want to see the market get five points above its 8:30 opening.
     
    #355     Oct 10, 2006
  6. Art's futures biases for Oct. 12.

    A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.
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    I was all set to surrender to the index bull gremlins and turn my attention elsewhere for Thursday. But then the CzarCharts got more bearish than the day before. Take special note of the three sell flashes in the second box of the Russell. Again, it’s rare to see such a unanimous lineup among the less-frequently flashing indicators. A setup for further frustration? I certainly can’t deny the possibility. But again, as one of my interviewees noted in a previous book, each loss gets you that much closer to the next profit. Maybe Thursday will be the day.
     
    #356     Oct 11, 2006
  7. Art's futures biases for Oct. 13.

    A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.
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    My recent series of trades haven’t been good, and it’s unlikely that any move tomorrow is going to negate the losses overall. That doesn’t mean that tomorrow’s signals aren’t going to be valid though. I’ll reiterate that I do trade 100 percent mechanically. Sometimes that means I’m conversing more than the system would be advocating, but people are interested in what goes on in a traders head even if the methodology is cut-and-dried and boring. So here’s the non-exciting scoop—the systems insist on selling across the board. I’m not one to argue.

    There is an additional statistical fact to keep in mind for Friday. Historical research shows that if the market gaps higher on the opening, (such as off reports, which will be hitting at 7:30 CST), then the odds increase that you’ll have a down day. I’ll be increasing my position should the open be at least three points higher in the S&P and I will then be adding to the position once it breaks below unchanged on the day. Should you be tired of the index abuse, however, you do have valid buy signals across the bond and currency complexes.
     
    #357     Oct 12, 2006
  8. Art's futures biases for Oct. 16.

    A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.
     
    #358     Oct 13, 2006
  9. Art's futures biases for Oct. 17.

    A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.

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    What can I tell you, ladies and gentlemen? The index Czar readings are still showing a downward bias. Perhaps they’ll keep doing so as the market continues to edge upward—many of the individual components are contrarian in nature after all.
    I’m reminded of a quote given to me by Bill Kraigie, a CBOT metals trader, for my book “When Supertraders Meet Kryptonite.” “Buy a creeper, sell a leaper.” I subscribe to the axiom. A market can inch higher until your head spins around. Unfortunately, to date, I have been unable to qualify the phenomenon into anything mechanical.
    One thing that would negate the “creeping” nature of the up move, of course, would be a sharply higher gap opening. You have a chance to see that tomorrow when the producer price index is released. (Actually, you’ll be seeing 7:30 reports pretty much all week long). I’ll reiterate; I’ve run tests that have affirmed that a gap higher opening significantly increases the chances that you’ll see a down close.
    There is something else. I have been partially short the S&Ps for days. My full commitment to the short side would involve entering x number of points lower than the opening on a stop. For days now, the setup has been possible, (different numbers each day), but the execution hasn’t materialized. For Tuesday, the number is -275. That number subtracted from the 8:30 opening is where I’ll be adding to my battered existing shorts—for whatever it’s worth.
     
    #359     Oct 16, 2006
  10. Art's futures biases for Oct. 18.

    A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.

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    Re my index shorts: It may not take much more rocking to finally topple this soda machine. I especially like seeing the cap formation tops in all three indexes. Not that my feelings mean a whole lot, but I’m getting a bit more comfortable with the downside.
    The other two complexes are also showing across-the-board sell signals for Wednesday.
     
    #360     Oct 17, 2006