Tuesday, April 14, 2015

The large players divergence

In every markets there are professionals and/or large operators, and this is true of course for financial markets since these are probably the largest business in the world.

Large operators are responbile for market movements, and we can track their activities by reading the footprints they left on the charts.

One new tool has just been developed and it can be very useful to pinpoint tops and bottoms: it compare the activities of large players, by looking at the divergence of large operators volume flow with prices.

The result is quite astonishing!

Let's look at what's happens when the large players divergence cross its standard deviation: this is the full picture for a 30 minutes italian stock insurance company

and now let's see the new tool in action: entry points are upside down, so a bottom signal indicator trigger a top on price chart and a top signal indicator trigger a bottom price chart

Friday, October 10, 2014

SP500 Index entry points using the Expectancy Bounds oscillator

The Expectancy Bounds oscillator is a very powerful tool designed to identify high probability succesfull entry points on any time series.

It measure the players expectancy for a stock, index, etc to raise or drop. Since it tracks the large players behaviors, it is a great tool expecially for funds managers for succesfully accumulation / distribution strategies.

Here is a beautiful example on the daily SP500 serie

Used along with the Mass Index, we can keep only the very likely pivot points: let's have a look at what's happens when a signal is triggered.

The first entry long signal appears @ 1575: grey shaded rectangles are overplotted to highligth the price entry zones, and vertical violet dashed lines for the triggered signals


Once again, the expectancy bounds clearly identify a buying zone, as can be seen in the following picture

While most of the market guru analysts calls for a bearish situation in SP500 index, big players knew it was a great chance to accumulate, and it's just what they did, strong accumulation as market drop.

Green rectangle highlight the zone where the Expectancy Bounds triggers the entry long.

Update 2

The SP500 index is still pushin' higher, raising up to 2000.

This clearly show are powerful is this tool and how big players behave. They saw a great oppurtunity to accumulate in the range 1920 - 1820, as can be seen in the last analysis picture @ point 1200, where the Expectancy Bounds starts trigger the entry long signal, for an actual average gain of 7% ( no leverage included)

Monday, September 1, 2014

The expectancy bounds

This is a tool based on a completely new approach: it provides a measure to evaluate when a stock is to be considered cheap or expensive.

In other words, it tells when there is a high expectancy for a stock to increase or a low expectancy for further price increase.

In the following pictures, the upper horizontal red line in the lower pane set a bound for low expectancy while the lower horizontal red line suggest high expectancy for a very likely rising prices.

The little rectangles overplotted on price pane depict the zones where the indicator is above or below these bounds, providing very high probabilities tops and bottoms and / or reversal points.

Friday, August 1, 2014

The large players tracker

This tool is a part of a new set of indicators going to be released soon: these tools are designed to track and follow the activity of large players (funds, hedges, institutionals, etc), since they are responsible for markets movements and create trends.

To know what large players are doing is very important: although it is true that they are not always right, it is always true that it is not wise to trade against the large players.

It is when small players trade in the opposite direction than large players that the best trading opportunities arise, and some of these opportunities are shown below, where price and Large players tracker diverge.

These are great long and short entries, and can be triggered by a simple OB/OS indicator to fine tuning the best time to entry.

All pictures are 1 minute time frame on Generali Assicurazioni, an important Italian insurance company

Monday, May 19, 2014

New version preview

Although not ready and with works still in progress, here's a preview of the new Fx based platform with one of the brand new tools in action, the Volume Waves.

Big players are always actives in any market, and to be succesfull a trader should play the same side of the market as strong hands plays.

Go with the winds at your back, not fight against it.

When strong hands enters a market they always left one or more footprints that can be highlighted with the proper gears.

In my opinion, one of the best tool to understand what big players are doing is to analyse the chart with the volume waves approach.

Based on the Wyckoff volume analysis method and recently resumed and improved, here is an example plotted on a 6 minute stock chart

Every waves is measured and compared by the strenght and the actions of big players: using the Volume Wave tool become immediately clear what the strong hands are doing.

In the following picture the red waves magnitudes are rising, meaning selling pressure is increasing

but, most important, we can clearly see the top @3,27 show an effort with no result, signaling a change in behavior.

This implies that the higher green up wave was more selling than buying, and we knew this well before the
strongest (2.3 millions) up wave ended because it overcome the previous 1.3 millions up wave well before marking the new 3.27 high.

This volume patter is a clear Upthrust, and a short position can be placed with high success probabilities when the NST indicator cross below its 50 value threshold.

Here what's happened then

Friday, May 24, 2013

Forecasting TA indicators

A new  feature now available in AMF is the ability to perform forecast not only on standard OHLC data, but also on Technical Analysis indicators.

No other cycle software can forecast TA indicators along with data, and this is a very useful tool to confirm market data analysis and predict.

The following example is the Relative Strength Index (close, 14) analysis and forecast on an italian stock (Generali, G.MI), daily data.

Let's now run a 60 days forecast on RSI, plotted in blue in the lower pane.

The green line is the RSI predict, and we can see a bottom is due soon, followed by a rise in trend that should last about 50 bars (50 days) or more.

At this time we do not know if this stock will reach its top at the first RSI top since the second RSI top could be a bearish divergence.

As of now, we can say that a bottom should happen in few bars and a long up leg should unfold then, so it is time to prepare to close short position/s (if any) and go long.

Stock moves lower marking a double bottom exactly as expected, and a rising move take place.

And here is the full picture 60 bars after our predict was launched: prices perfectly follow the RSI forecast!

With this analysis, we knew in advance which side of the market to trade.

Friday, April 26, 2013

Relative Strength Analysis

A very important tool for stock trading is the Relative Strength Analysis.

By plotting the resulting series from index/stock ratio, we can have a good idea of the relative strength of a stock compared to its index.

This approach is very useful to discover stocks that will underperform or overperform the index, so we can focus on long position on only those stocks showing a declining RS, and the opposite for short position.

RS is plotted contrary to the stock data, it means a declining ratio series shows increase of strength for stock while rising serie shows increase of weakness.

Of course we can accomplish the same analysis approach on this serie as from any stock data serie.

Let's apply cycle analysis on FTSEMIB / Atlantia on intraday 12 min time frame, 50 points ahead forecast.

The resulting predict call for an immediate uptrend (stock decline) up to the ratio top, 40 bars ahead.

Channel show the actual trend with support and resistance levels.

The first out of sample bar marks a little lower bottom, followed by an immediated uptrend

Exactly as predicted, ratio rise for 40 bars, reaching the expected top time target 

Ratio plummet sharply after reaching the predicted top, finding support on 75% internal Channel retracement line.

Exhaustion wave adds reliability to the cycle analysis by plotting a red and a blue signal in line with predicted top and 1 bar before ratio hit internal price retracement.