The Stock Market

[Parvis]

"Bullish Sentiment" is meaningless if there is no more money to be invested - therefore I am not redefining bullish sentiment - but rather pointing out the useless significance of this data in general - for trading - or even 'investing'.

It certainly is rather useless in predicting an upturn - downturn - or sideway consolidation - tomorrow - next week - or next year.

When I mention 'divergence' it certainly has nothing to do with 'sentiment'.

From my standpoint 'meaningful Market cashflow' is everything you need to know for trading - 'Investing' is a 'different vehicle'.

Edited November 14, 2010 by Parvis

[midas]

Midas this :blink: :blink:

is nearly in everyone of your posts. Is it a nervous twitch or something?

sorry bit off topic, just curious

quite possibly zorro.

And i am curious ....are you related to David Tepper because you both have the same.. erm...." style "........

" On September 24 David Tepper almost screamed that he was "balls to the wall long" and EVERYTHING was about to go up on QE2, you were very likely buying shares Bank of America and Citigroup from? Why, David Tepper, that's who. In Tepper's just released Q3 13F, the Appaloosa fund manager disclosed that in the quarter ended September 30, one week after his pompous, self-serving speech on CNBC served as a reason to pump the market up by almost 2%, he sold 18% of his BofA holdings (his largest holding both at June 30 and September 30), 11% of Citi, 19% of Wells Fargo, 19% of Fifth Third, 19% of Capital One, 75% of his then $157 million Hartford Financial position, and lighten up on pretty much all of his other financial positions. And congratulations to CNBC for serving as the medium which David Tepper manipulated to his advantage and dump about 20% of his financial stake, which as of June 30 was his biggest, at 56% of total holdings. "

[Abrak]

No sorry your logic is introverted.

If you take 100 people and ask them which way the market is going to move. If you take a logical extreme whereby 100 people take a view that the market is going up, then by definition it must go down. You do not need to know there cash flow because it has already been invested in the market. To the extent it is future cash flow they would have logically borrowed to maximize their future net expected wealth.

Bullish sentiment by 'definition' means there is no more money to be 'invested'. How possibly could a rational person be bullish and intend to invest existing cash flows in the future when he expects prices to be higher.

I would also suggest that if you analyze the data it has been statistically significant over the past 23 years.

And Parvis if you merely wish to go back to your more buyers than sellers argument for determining share prices as long as you realize it is entirely circular and meaningless that is fine. Oh and on top of that it clearly is false.

[zorro1]

No sorry your logic is introverted.

If you take 100 people and ask them which way the market is going to move. If you take a logical extreme whereby 100 people take a view that the market is going up, then by definition it must go down. You do not need to know there cash flow because it has already been invested in the market. To the extent it is future cash flow they would have logically borrowed to maximize their future net expected wealth.

Bullish sentiment by 'definition' means there is no more money to be 'invested'. How possibly could a rational person be bullish and intend to invest existing cash flows in the future when he expects prices to be higher.

I would also suggest that if you analyze the data it has been statistically significant over the past 23 years.

And Parvis if you merely wish to go back to your more buyers than sellers argument for determining share prices as long as you realize it is entirely circular and meaningless that is fine. Oh and on top of that it clearly is false.

Like this bit

"To the extent it is future cash flow they would have logically borrowed to maximize their future net expected wealth".

[lannarebirth]

More sentiment stuff:

http://pragcap.com/bullish-sentiment-soars-roof

http://www.tradersnarrative.com/sentiment-overview-week-of-november-12th-2010-5009.html

[Parvis]

No sorry your logic is introverted.

Your statement does make sense - from the standpoint of someone who understands zilch of what moves the Markets - today - tomorrow - next week - next month etc.

But most people do not have the vaguest idea about what cashflow is in terms of the Stockmarket - nor have the vaguest idea of how to 'measure' it with reasonable accuracy. They very often are likely to (mis)quote meaningless numbers of statistics they do not comprehend from sometimes very reputable sources. So you are not alone.

If you really want to quote one of my previous posts - I suggest to quote the one that contains a certain mathematical formula - which can be used to define 'meaningful cashflow' and other "unknowable information" - if you plug in the appropiate numbers. But judging from the lack of comments - it went over the head of all - except possibly for one "this is an old one".

Edited November 14, 2010 by Parvis

[lannarebirth]

Your statement does make sense - from the standpoint of someone who understands zilch of what moves the Markets - today - tomorrow - next week - next month etc.

But most people do not have the vaguest idea about what cashflow is in terms of the Stockmarket - nor have the vaguest idea of how to 'measure' it with reasonable accuracy. So you are not alone.

I'm not sure if cashflow is the word you mean Parvis. You may mean "inflows", or perhaps "liquidity"?

[Parvis]

Your statement does make sense - from the standpoint of someone who understands zilch of what moves the Markets - today - tomorrow - next week - next month etc.

But most people do not have the vaguest idea about what cashflow is in terms of the Stockmarket - nor have the vaguest idea of how to 'measure' it with reasonable accuracy. So you are not alone.

I'm not sure if cashflow is the word you mean Parvis. You may mean "inflows", or perhaps "liquidity"?

Ofcourse money that moves into the Market (is already committed) not into Funds - not "liquidity" per my definition - but "inflow into the Stockmarket" is probably a reasonable term - but describes only part of the function.

I use the term "cashflow" - since it can go in both directions - inflow and outflow.

Since it is money already committed (or withdrawn) - day by day - by definition it can not be used as a longterm projection reliably. But "Markets don't reverse on a dime" (as far as cashflow is concerned).

Edited November 14, 2010 by Parvis

[Abrak]

Ok I get your point. Cashflow in and out of a stockmarket or stock is not really something I try to forecast.

It is like one of those arguments. Fundamentalist says to a technical guy 'if you don't understand the fundamentals, how do you expect to predict the price?' to which technical guy replies 'if I can predict the price, what is the point of understanding the fundamentals?'

[Abrak]

If you really want to quote one of my previous posts - I suggest to quote the one that contains a certain mathematical formula - which can be used to define 'meaningful cashflow' and other "unknowable information" - if you plug in the appropriate numbers. But judging from the lack of comments - it went over the head of all - except possibly for one "this is an old one".

Well first of all, I agree with your approach which is that that if your theoretical mathematical model for how prices should be predicted does not correspond with actual price movements over the last 30 to 50 years then it really isnt much use. Unfortunately you have shown no mathematical or intellectual formula of any significance that is either worth back testing or not.

I have a mathematical model which is incredibly simple but is broadly in lines with that used by Hussman. You can see a very high degree of actual returns against theoretical returns. For various reasons I believe that my model will predict future price movements better than his (but there is a degree to which my model adapts very long term returns to benefit from short (two to three year returns.))

Obviously I cannot create a mathematical model that incorporates 'unknowable' numbers simply one based on knowable numbers and the resulting effects of the assumptions of actual unknowable and their various parameters.

[badge]

Im unsure why anyone bothers conversing with Parvis? His forecasting(and ergo one can conclude making money from markets) as demonstrated on this forum, is woefully impractical.

His deliberately veiled theory is pedestrian and redundant IMVHO.(based on results, and daft comments)

No, his focus is on trying desperately to prove he knows what hes talking about. See above

Oh, and that hes a ginueen Amercian citizen

[BlackJack]

zorro1

at this time of the night, it seems like we are the only two humans left on this whole wide world.... lol

what does it mean 20 dollars/trade? is it roundturn--both getting in and getting out at 20 dollars?

is is aus dollars or us dollars pls?

thx again

nakachalet only reason I'm here is its keeping me off the streets of Bangkok and out of mischief lol. Its a sliding scale , your first 20 trades are at around $35 in AND $35 out and the drops to $20 in AND $20 out. I trade withe directshares.com.au so you can check out their prices on line , in OZ dollars. Avoid brokers like the plague.

CMC is less tha 10 bucks a trade and allows free conditional trading

sounds cheap but geez I know brokerage fees add up quick however it does depend on your "punt"

Someone investing 50 bucks will 100% go for CMC. 30k? does it really matter?

Oh one question , do you trade live via IRESS? if so how much for the platform on CMC.

cheers

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[Parvis]

Im unsure why anyone bothers conversing with Parvis? His forecasting(and ergo one can conclude making money from markets) as demonstrated on this forum, is woefully impractical.

His deliberately veiled theory is pedestrian and redundant IMVHO.(based on results, and daft comments)

No, his focus is on trying desperately to prove he knows what hes talking about. See above

Oh, and that hes a ginueen Amercian citizen

I realize you are a genuine Englishman - fat - tatooed - and Brain full of 'mierda" who speaks one language and that one not very well. Who is very good in 'hindcasting Markets' - but claims otherwise. Whose education - or the lack of it - is quite obvious by his choice of words.

Edited November 15, 2010 by Parvis

[Parvis]

Abrak - I think we are 'bypassing' understanding each other - probably because I do not mention specifics - therefore my comments may be confusing. There is not need for 'backtesting' - but as always ideas tend to improve when discussed with intellectually inclined individuals.

All it is - is just what I said "Cashflow" - inflow and outflow - and visible 'cashflow' does precede any actual pricemovement. Except to determine this "meaningfull cashflow" requires a mathematical formula - since it is not a 'published figure' - and then ofcourse - a graph. To be able to discuss it further one would need at least a cursory understanding of the mathematical formula I referenced months ago. I assume very few people actually can read this formula - but ofcourse any Economics major from a school such as LSE - probably can.

I realize it is an 'unusual' concept not normally used by traders - I am aware of - nor has it anything to do with conventional "Technical Analysis" - but rather should be used in conjunction therewith.

[badge]

Im unsure why anyone bothers conversing with Parvis? His forecasting(and ergo one can conclude making money from markets) as demonstrated on this forum, is woefully impractical.

His deliberately veiled theory is pedestrian and redundant IMVHO.(based on results, and daft comments)

No, his focus is on trying desperately to prove he knows what hes talking about. See above

Oh, and that hes a ginueen Amercian citizen

I realize you are a genuine Englishman - fat - tatooed - and Brain full of 'mierda" who speaks one language and that one not very well. Who is very good in 'hindcasting Markets' - but claims otherwise. Whose education - or the lack of it - is quite obvious by his choice of words.

Simply bizarre, completely inaccurate and personally insulting. Well done.

For my part, when it comes to judging characters Im a quick learner

Well Mr P, all Im aware of is that any word exchanged with you is a word wasted.

Unless of course those words are a rearrangement of 'with misguided notions of their place', 'a meaningless and irksome jester' and 'in grand scheme of things'.

[Parvis]

Lovely job B

Edited November 15, 2010 by Parvis

[Abrak]

Yes I fully agree we were talking at cross purposes Parvis.

Anyway show us the mathematical formula again or point me in the direction of the post.

[Parvis]

Yes I fully agree we were talking at cross purposes Parvis.

Anyway show us the mathematical formula again or point me in the direction of the post.

Sometimes when one talks in terms not mutually understood equally - disgreements result not because of fundamentals - but because of style.

Attached the formula - what I am really looking for is for anyone even knowing what it is. This is not exactly the formula I use - but rather derived from it.

Equilibrium.bmp

Edited November 15, 2010 by Parvis

[zorro1]

balckjack

yep would be the best value out there.

"Browse all ASX instruments with Delayed Data"

can you elaborate.

[Abrak]

Yes I fully agree we were talking at cross purposes Parvis.

Anyway show us the mathematical formula again or point me in the direction of the post.

Sometimes when one talks in terms not mutually understood equally - disgreements result not because of fundamentals - but because of style.

Attached the formula - what I am really looking for is for anyone even knowing what it is. This is not exactly the formula I use - but rather derived from it.

Oh well I did ask didnt I? As a Cambridge Econ Grad I thought that if an LSE student was supposed to understand it, then it must be simple indeed. But now I recall why I dont remember the equation on the basis that I didnt understand it in the first place.

So understanding no? As to knowing what it is, I can hazard a pretty good guess. It is a game theory equivalence equation.

[Paulo1]

Yes I fully agree we were talking at cross purposes Parvis.

Anyway show us the mathematical formula again or point me in the direction of the post.

Sometimes when one talks in terms not mutually understood equally - disgreements result not because of fundamentals - but because of style.

Attached the formula - what I am really looking for is for anyone even knowing what it is. This is not exactly the formula I use - but rather derived from it.

Oh well I did ask didnt I? As a Cambridge Econ Grad I thought that if an LSE student was supposed to understand it, then it must be simple indeed. But now I recall why I dont remember the equation on the basis that I didnt understand it in the first place.

So understanding no? As to knowing what it is, I can hazard a pretty good guess. It is a game theory equivalence equation.

This helps explain things..LOL

http://www.xtranormal.com/watch/7107529/?ref=nf

[Parvis]

Well Abrak - it is interesting to see that someone actually - at least is aware ot this formula. I do accept it is difficult to understand and takes some thought and explaining to get to the root of it. In practical terms this formula led me to a modified version thereof which shows the longer term trendline of Markets quite nicely and accurately - without the inherent volatility of the Indices (but I trade - the volatility).

As I have stated before - SPX 'oscillates' along the trendline.

For instance - as you may accept - a trendline can only continue to be positive as long as 'intense buying' (without affecting the dip) more significant than selling occurs at any Market dip. This shows particularily well recently in the 800 Dow point Market dip starting Aug 9 through early Sept. It shows as significant positive divergence - just as potential Market tops show as significant negative divergence - long before (several days to a few weeks) the actual event.

At present for instance - the question is - trendreversal or consolidation. Cashflow clearly shows - so far - just a consolidation and we will continued uptrend momentarily.

My desire is - during periods of high volatility - to identify intraday (to several days) volatility of 150 - 200 points or so accurately and reliably. I do not use stoploss orders etc etc etc - I feel you either know - or you don't know.

I do not claim - that I have all the answers - it is and most likely will always be as long as I continue - 'a work in progress'.

Edited November 16, 2010 by Parvis

[BlackJack]

balckjack

yep would be the best value out there.

"Browse all ASX instruments with Delayed Data"

can you elaborate.

thats from their web

i only do the trades and so delayed for 20 mins

if you want real time need to pay

[zorro1]

balckjack

yep would be the best value out there.

"Browse all ASX instruments with Delayed Data"

can you elaborate.

thats from their web

i only do the trades and so delayed for 20 mins

if you want real time need to pay

i enjoy watching real time. Yeah like most you pay unless you do less than around 10 trades a month. Mine is $65 otherwise. You really get a handle on how disadvantaged us little people are when you see what the people with real money can do to a stock...

[lannarebirth]

Investors Intelligence Sentiment: (OEX = S&P 100)

[Abrak]

Investors Intelligence Sentiment: (OEX = S&P 100)

The AAII survey (the one Badge usually quotes) shows quite a sharp fall this week.

Also dated 17/11

Bulls 40% down 17.6%

Neutral 27.5% up 13.5%

Bears 32.5% up 4.0%

This seems to more reflect my sentiment of sentiment.

I am exceptionally long cash at the moment which would seem utter madness given how unattractive it is. This partially reflects the rise in the Thai market which has inevitably reduced my future returns. It also reflects my total uncertainty on virtually every asset class. I even sold half my silver - a position I havent touched for 4 years.

The problem I have is that with so much uncertainty and so little in terms of expected future returns, the option value of having cash appears more attractive, than most assets.

[badge]

Investors Intelligence Sentiment: (OEX = S&P 100)

The AAII survey (the one Badge usually quotes) shows quite a sharp fall this week.

Also dated 17/11

Bulls 40% down 17.6%

Neutral 27.5% up 13.5%

Bears 32.5% up 4.0%

This seems to more reflect my sentiment of sentiment.

I am exceptionally long cash at the moment which would seem utter madness given how unattractive it is. This partially reflects the rise in the Thai market which has inevitably reduced my future returns. It also reflects my total uncertainty on virtually every asset class. I even sold half my silver - a position I havent touched for 4 years.

The problem I have is that with so much uncertainty and so little in terms of expected future returns, the option value of having cash appears more attractive, than most assets.

On the II report, theres more bears around today than at previous points, and on AAII you should view those stats against the historical average which shows all catagories pretty inline, although a few undecideds turned bears.

II weekly Bulls and Bears

II weekly Bulls-Bears

[badge]

I note today that Irelands largest financial institution by market cap is..... PaddyPower

[badge]

Been focusing on possible sell signals in shares last few days; FTSE 5700/10 looks likely, with perhaps just shy of the previous YTD high thereafter.

I wonder if it has the legs however, as volume and breadth are diverging, momentum is diverging and sentiment is already very elevated.

Not only did the FTSE have the 'legs', it surpassed the previous YTD high, by almost 1.5%. I sadly had a sell signal come in a tad early and ended up getting stopped out for 0.8%, however I caught the ESX high - 2900 - almost spot on and am thus now looking at possible buy signals, although general market conditions may offer an inclination to ignore any imminent signals, unless only for scalping purposes.

5537 shows for FTSE and 2683 on ESX, both cash, and thereafter 5507ish and 2650ish look to wind up likely signals, respectively.

[zorro1]

BWAHAHAHAHAHA

See you at 12,000 Midas touch