Timing Models Lining Up For April 13'

Given the liquidity-driven equity ramp YTD world wide (Asia, Aussie, Euro, US) at new 52 week and all time highs, and with reference to my last post on the March 27/13' Inflection point and Trading Time; we need to be preparing for the next rotation in assets -- which is coming soon.

Mar 27/13' Inflection Point In Stocks --Trading Time and Market Symmetry

If we were to think about markets as ecological systems, involving complex yet orderly dynamic formations on a collective level, then we would have to consider the basic building block responsible for that outcome -- the individual decision maker -- a biological system -- with efficient rhythm and symmetry by design. Extending that metaphor into the price-activity inherent in stock market movement, driven daily by individuals, we must therefore look for the symmetry, anticipate the order and potential organization with the macro-formation. I would start by looking at the relationship between price and time as it relates to odds betting.

Market Watch: Update

I'm going to be posting more on global markets, trend structure and their respective signal status going forward. From the list below, we can see directional nature as per time period in weeks, months and quarters, respectively (you can find more information about how I evaluate this here). Each of these time frames represent psychological bias by virtue of directional status (or embedded bias). The status is displayed with a 'value' which demonstrates trending bias at rest (ie., Weekly: Bullish=3 ==> Long Trend (Weekly Level), Sideways 3 Weeks) --- markets are either moving up, down or sideways and will pause in the course of its trending state for some period until the supply/demand of the product (float) has been distributed/accumulated to re-initiate directional activity. So we see Bullish vs Bearish biases with values attached to more accurately characterize state within trend. This can provide important insights to realize asymmetric risk-adjusted opportunities when used in conjunction with my trend- momentum signal -- as a continuation/reversal set-up/entry.

Momentum Signals: Market Watch

Nasdaq Update; A Look Into 2013

Let's take a closer look at the Nasdaq100 YTD to develop some expectations going out into the end of the Q1:

My initial expectations for the NQ in Jan-Feb time frame was to far exceed the current performance to the upside - in line with Dow30/SP500, but AAPL has been a weight keeping the NQ essentially range bound. The day chart below shows the NQ_F basically in a holding pattern since the Jan 2 gap open.  As per the arrows in 2013 with trade reference attached (1-3), I've been in and out of this market, but virtually a non-trading environment -- and currently long on my Momentum Swing (Trade 3). First upside target is the Monthly High pivot at 2802, which is inline with the 2011 uptrend line (in blue) and the 00'-02' bear market 50% retracement level. With AAPL lagging the market I find it very difficult to make the case for NQ's to clear the 00'-02' 50% hurddle retracement level on this rally. We need to keep an eye on whether the NQ can push to 2802 (Monthly High Pivot) to the upside, or whether it sells below the Feb Regression (labelled below - 2727-2725) first, which would imply possible downtrend continuation going into March.

How Can We Become More Antifragile As Traders?

I was reading through Taleb's 'Antifragility' over the holidays and his reference to the correlation between macro-antifragility (macro-resilience) as a function of micro-fragility (micro-vulnerability): the progressive interactions/competitions at the sub-component (or sub-unit) level that contribute to the overall 'character'/resilience and evolution at the component level (or macro level) in complex systems, which as Taleb describes could represent the relationship between say any sector, industry, economy (macro) and its independent units/parts (differentiating products, corporations and people --- the micro). In other words, the survival through competition and adaptation of the parts (random interactions), works to evolve and strengthen the collective and insulate it from shocks and such, in the case of complex systems (systems of interdependence).

2012 Nasdaq 100 Futures Performance

To learn more about 'Nasdaq100 Short Swing' and 'Nasdaq100 Momentum Swing', click here.

For a complete review of all trades taken in 2012:
Short Swing
Momentum Swing