My second article for a school paper on economics and market mechanisms.
Will post an update on the markets tomorrow.
Website link:
http://www.insidermediagroup.com/features/hft-attack-on-efficient-markets
PDF version:
http://www.insidermediagroup.com/features/hft-attack-on-efficient-markets.pdf
Saturday, December 18, 2010
Tuesday, December 14, 2010
Elliott Wave S&P 500
My attempt at a count of the S&P 500.
Interesting thing about Elliott wave is it is Fractal
Below is the Mandelbrot set, the most famous Fractal pattern.
I plan on studying Fractal math just to get a better understanding on the dynamics of a pattern.
From this website
These are my targets and the first one is around 1260.71
4 hour Chart
Hourly Chart
I think the 1300 mark makes the most sense at this point, as it is in the area of a Fib and it is psychological. Also wave 1 = wave 5 equity is around 1292.70 which again is close to the 1300 mark. W1 = W5 for time is about February 28th, 2011.
If this count is correct, the implication is that the 5 wave impulse from the lows in July will end. This will lead to a correction. At a minimum (38.2% retracement) the S&P 500 should fall to 1192.50 level, and the 61.8% retracement will be 1123 level.
I will keep updating this count as an experiment with Elliot wave. Would like to learn more about it and judge how effective it can be.
Interesting thing about Elliott wave is it is Fractal
Below is the Mandelbrot set, the most famous Fractal pattern.
I plan on studying Fractal math just to get a better understanding on the dynamics of a pattern.
From this website
These are my targets and the first one is around 1260.71
I think the 1300 mark makes the most sense at this point, as it is in the area of a Fib and it is psychological. Also wave 1 = wave 5 equity is around 1292.70 which again is close to the 1300 mark. W1 = W5 for time is about February 28th, 2011.
If this count is correct, the implication is that the 5 wave impulse from the lows in July will end. This will lead to a correction. At a minimum (38.2% retracement) the S&P 500 should fall to 1192.50 level, and the 61.8% retracement will be 1123 level.
I will keep updating this count as an experiment with Elliot wave. Would like to learn more about it and judge how effective it can be.
Thursday, December 9, 2010
S&P Elliot Wave analysis - Irregular Correction & EUR/USD divergence
I will start off with mentioning some videos that have provided an interesting count.
Target guidelines from the following was used:
http://www.esignalcentral.com/university/get/getManual/eSignal_Manual_ch9.pdf
Starting with a longer term chart
So Above is the daily chart. It is a bit hectic, however, I didn't want to erase everything when zooming out.
Man thing to note is where we are in the wave count at this scale. August 2010 terminated Wave 1. I did some research on Andrew's Pitchfork Video of action / reaction lines Here
Based on pitchfork time projection, mixed with Fib levels and elliot wave, a short term projected target of 1145 - 1155. The big red dot.
Wave yellow B touched the 61.8% retractment of the breakdown of the markets in 2008. This point a short term top, in my opinion until it is taken out.
Once Wave 4 completes, wave 5 should go to modest new highs before terminating, leading the way for a strong down move in the indexes.
On the shorter term count, the cyan count seems to have terminated, making the high 1235.
So to sum it up, we might be about to continue a 4 wave down on longer term chart. Which means news highs are expected, by next February. Price target of 1255-1260 on the wave 5 up.
On the shorter term, it appears our irregular correction has just put in a B wave. This means we have entered into a C wave down that should take out the A Wave at 1175. With the target of 1145-1155 this price target is also 1.62 x Wave A which satisfies the fib targets of a Wave C.
From the PDF above on Elliot wave here is a picture of a irregular flat.
 |
| See more here |
Expect to see the Euro fall against the greenback. Price should breach 1.26 if the divergence is to play out.
Tuesday, December 7, 2010
S&P 500 - December 7th, 2010
Weekly chart of the S&P 500: Interactive Charts powered by freestockcharts.com
Hello 61.8% retracement. Today candle stick pattern was a Shooting Star
Lets attempt to overlay some Elliot wave
A bearish candle, off a 61.8% retractment is interesting. Tomorrow look for confirmation.
On the monthly, it is always nice to see where we are currently over the longer term.
Why Economics Matters by Satnam Lehal
New Palgrave Economics Writing Prize Winner 2008–9
We are very proud and happy to announce the winner of our competition launched in association with the Financial Times and the London School of Economics– ‘Why Economics Matters.’ Satnam Lehal, 31, a graduate of Oxford and Cambridge Universities who works in financial services, won the £1000 prize this year. For more information and updates about future competitions, please keep coming back to this site.
Why Economics Matters by Satnam Lehal
Located on this site: The New Palgrave Dictionary of Economics
"The New Palgrave Dictionary of Economics (2008), 2nd Edition, is an eight-volume reference work, edited by Steven N. Durlauf and Lawrence E. Blume. It contains 5.8 million words and spans 7,680 pages with 1,872 articles. Included are 1057 new articles and, from earlier, 80 "classic" essays, 157 revised articles, and 550 edited articles. It is the product of 1,506 contributors, including 25 Nobel Laureates in Economics. It is also available in a searchable, hyperlinked online version with added content from quarterly updates. The publisher is Palgrave Macmillan. The first edition, The New Palgrave: A Dictionary of Economics (1987), was published in four volumes.[1][2] Institutional access to full-text online articles for both editions is available by subscription.[3] "
Wikipedia: The New Palgrave
We are very proud and happy to announce the winner of our competition launched in association with the Financial Times and the London School of Economics– ‘Why Economics Matters.’ Satnam Lehal, 31, a graduate of Oxford and Cambridge Universities who works in financial services, won the £1000 prize this year. For more information and updates about future competitions, please keep coming back to this site.
Why Economics Matters by Satnam Lehal
Located on this site: The New Palgrave Dictionary of Economics
"The New Palgrave Dictionary of Economics (2008), 2nd Edition, is an eight-volume reference work, edited by Steven N. Durlauf and Lawrence E. Blume. It contains 5.8 million words and spans 7,680 pages with 1,872 articles. Included are 1057 new articles and, from earlier, 80 "classic" essays, 157 revised articles, and 550 edited articles. It is the product of 1,506 contributors, including 25 Nobel Laureates in Economics. It is also available in a searchable, hyperlinked online version with added content from quarterly updates. The publisher is Palgrave Macmillan. The first edition, The New Palgrave: A Dictionary of Economics (1987), was published in four volumes.[1][2] Institutional access to full-text online articles for both editions is available by subscription.[3] "
Wikipedia: The New Palgrave
Monday, December 6, 2010
GOLD hits new all time high, Sabina Gold & Silver SBB on TSX news release
Today a new high was made in gold. Impressive yes, unexpected not really. This commodities will continue to rise as long as USD is being hammered and the world is fearing a breakdown in Euro zone.
I have mentioned previously that my strategy for markets right now, is when I am feeling bullish I long gold / silver mining stocks, some of these that have done extremely well are: AXR, FR, SBB, GPR, FVI, EDR.
If I am feeling bearish I just stick to inverse ETF to short the stock markets.
Currently, I am holding only SBB, with a Buy - stop on FVI at 4.64
I also mentioned previously that the $5 stock range is interesting, as it seems that additional investors get involved after this price level is breached for junior mining companies.
Daily chart of SBB below
Some strong volume has recently entered the market as you can see last week there was a massive increase in the price. I picked up on the pull back.
What is excited is a release at 4:20pm after market close from Sabina Gold and Silver corp on the final 2010 reading for their mining properties.
Here is the Article from marketwire
Also the report from the company website
The highlights are the following
"Hole 10GSE136 returns 8.74 g/t Au over 79.9m including 45.20 g/t Au over 6.0m and 25.27 g/t Au over 4.9m
Hole 10GSE140B returns 18.95 g/t Au over 4.35m and 26.43 g/t Au over 2.9m"
Based on previous results for the same property these are significant results. This stock will be very interesting to watch this week.
Also they have targeted potential drilling targets for their 2011 exploration program.
Friday, December 3, 2010
A sobering wake up call to the world
Well I guess reality will be extended for a few more days/months.
This video basically sums up the situation:
In addition, it seems there are a few people that are trying bring reality back. Remember in Europe nations such as Greece and Ireland were forced into austerity measures since they do not have control over their monetary policy. IMF and European Central Bank imposed measured to raise taxes, cuts spending, and even lowering minimum wage in Ireland.
As the states are the quasi-world bank, they are in complete control of their monetary policy there is no pressure to reduce debt. This is abundantly clear from the below bloomberg article.
debt plan rejected
Additional proof of the failure of the current path we are on is:
Unemployment Rises to 9.8% as U.S. Adds Just 39,000 Jobs
So rising unemployment as billions of dollars a DAY are pumped into the system (today 6.8 billion), should open some peoples eyes.
I starting going long metal mining stocks again, but I am not counting out STRONG selling coming in at any point probably within the next couple weeks. If not, I guess the extend and pretend mentality wins until the next sovereign debt issue.
Below is a current US debt holding, Something doesn't seem right that the FED is the number one debt holder
This is borrowed from ZeroHedge article here
Explosion of debt ......
This video basically sums up the situation:
In addition, it seems there are a few people that are trying bring reality back. Remember in Europe nations such as Greece and Ireland were forced into austerity measures since they do not have control over their monetary policy. IMF and European Central Bank imposed measured to raise taxes, cuts spending, and even lowering minimum wage in Ireland.
As the states are the quasi-world bank, they are in complete control of their monetary policy there is no pressure to reduce debt. This is abundantly clear from the below bloomberg article.
debt plan rejected
There is 0 political will to actually do what is required. There will come a time where it is realized that the unpopular choice is the only choice.“This plan will make an important first step forward in proving something, in proving our nation understands the peril of our ever increasing deficits and that our leaders are prepared to do something real,” said panel co-chairman Erskine Bowles before commission members began announcing their votes.
Additional proof of the failure of the current path we are on is:
Unemployment Rises to 9.8% as U.S. Adds Just 39,000 Jobs
So rising unemployment as billions of dollars a DAY are pumped into the system (today 6.8 billion), should open some peoples eyes.
I starting going long metal mining stocks again, but I am not counting out STRONG selling coming in at any point probably within the next couple weeks. If not, I guess the extend and pretend mentality wins until the next sovereign debt issue.
Below is a current US debt holding, Something doesn't seem right that the FED is the number one debt holder
This is borrowed from ZeroHedge article here
Explosion of debt ......
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