Tuesday, September 26, 2006

Tale of Two Timers

Two proven methodologies that I have referred to in the past are Terry Laundry's
"T Theory" and Robert Taylor's "Taylor Trends." I am making note of them here because both of these two very disparate methodologies are converging into a single, bullish view of the months ahead. In fact both are suggesting that there will be a brief decline into mid-October (Taylor) or early November (T Theory) at the latest, then we are off to the races well into the future.

Although both timers can be off on the very short-term, they both have an excellent record of intermediate and longer-term forecasts. According to both, from wherever and whenever we bottom in the coming weeks, the trade of the year is to get long and stay long soon thereafter.

A

PS: Taylor Trends has an interactive member forum up and running, for those who have read the book, Paradigm. It will be interesting to compare notes with others who are following and appreciate these forecasts. You can access the forum at the Taylor Trends member web site.

Friday, September 22, 2006

Sunday, September 17, 2006

Back to the Beach

Ah, Kiawah. I'm back on the beach for a week, here celebrating Alana's 16th birthday and to watch her defend her No. #1 seed position on her high school tennis team against two formidible South Carolina Independent School Association Class AA opponents.

The flight Saturday was uneventful. I bought a copy of The New Yorker in the Spokane airport and read it cover to cover during the two legs of the flight to Charleston. The first leg was consumed by a three-hour read on Bill Clinton, a very long article written by David Remnick who followed Clinton from the World Cup final game to a tour of Africa meeting with heads of state in an attempt to do something about one out of four African's having contracted exposure to the AIDS virus. Well written and fascinating, whatever you think of Clinton.

On the second leg, from Chicago to Charleston, I read the rest of the magazine, including an article on the neurological goings on when we are faced with risk:reward decision making as it relates to buying and selling of stocks. It ends up that we are neurologically programmed to be chicken-shits when it comes to economic risks. We make the wrong decisions by giving much more credence to risk then the risk:reward parameters suggest. And that most successful gamblers, traders and investors are able to intellectually overcome this general population's tendency to avoid risk and to view any economic choice for what it is, an issue of probabilities.

At 5:00pm ET I landed in Charleston, picked up my Hertz rental and was off to Kiwawh. I stopped first to pick up Alana who will be staying with me the week, but she insisted on driving her car over to the villa, the BMW X-3 that I shipped to her last month. The Villa is overlooking the beach and has secure wireless high-speed internet, which should help me make the cost of this trip back in trading next week.
Soon Sarah, my 18-year-old joined us and the three of us went to the local grocery store for supplies for the upcoming week. Ilene would be proud. I checked all ingredients for partially hygrogenated gunk...before buying it.

A couple of observations about being back in the southeast. First, instead of a heavy dose of Pac-10 football everywhere on TV, there are ACC and SEC games. Secondly, whereas Washington state is barely aware of tropical storms in the Atlantic, local news here is obsessed with these storms. On the other hand, it's still summer here.

So today will be a combination of beach and birthday activities, with just enough time to write a new blog before Alana wakes up and I become a dad again.

A

Wednesday, September 06, 2006

Paradigm - Update

On April 5, 2006 I wrote a review of Paradigm, a novel written by Robert Taylor which discloses a market timing model based on natural earth cycles. As I indicated in my review, Robert Taylor maintains a web site that tracks those cycles and issues market forecasts based on the theory he espoused in his book. It is an engaging theory (and novel) and I have been closely following the forecasts for the past four months.

What follows below is a track record of the forecasts as I have been interpreting them. Interpreting is a little misleading, as for the most part they are set out clearly and succinctly, in an easy to follow and tradable manner. But there is some leeway in exact entries and exits, so to be consistent, I based every one of these trades on buying/selling the Open on the day indicated in the forecasts as a likely change in trend. In other words, the trades below can be considered, "give or take one trading day," in about half the signals.

All signals are based on the DIA, the Dow Diamonds which is tradable in and of itself, although I prefer the near term at-the-money options for leverage.


BUY April 15 111.31.....+1.94
SELL April 24 113.25.....-0.41
BUY April 28 113.66.....+2.17
SELL May 9 115.83.....+2.13
BUY May 17 113.70.....-1.26
SELL May 26 112.44.....+1.19
BUY May 31 111.25.....-0.95
SELL June 18 110.30.....-0.29
BUY June 22 110.59.....+1.63
SELL June 30 112.22.....+0.88
BUY July 12 111.34.....+0.16
SELL August 1 111.50.....+0.44
BUY August 11 111.06.....+2.39
SELL August 18 113.45.....+0.25
BUY August 24 113.20.....+1.42
SELL Sept 5 114.62.....+0.48 (open)
BUY Sept 8/11

*Sixteen trades in 17 weeks.
*Twelve wins, four losses = 75% winners.
*Average DIA points per trade, 0.76.
*Average option pro forma, based on 0.76 DIA pts per trade, about 40%.

This represents some pretty good timing and you can find out more about it at the Taylor Trends web site. My understanding is that the forecasts are posted free to anyone who reads the book.

The above trades are based on the shortest term time model, one of three timing models that are based on the cycle methodology. The medium term model I already highlighted in my original blog, but those signals were all backtested. The above signals were real time. Finally, based on the forecasts of the other two models along with the one above, we are about one month away from one hell of a BUY SIGNAL.

One hell of a Buy Signal, kind of like the way that sounds.

A

Sunday, September 03, 2006

THE GRYPHON

One

"To think differently," was the earliest maxim at GRYPHON Systems. So too was the question, "Why not?" which sprang from The Creator's sometimes irrating habit of believing most anything was possible.

Why not...?

Yes, why not invent trading modules that require no input from the user and demand no external research efforts? Why not integrate multiple, modular adaptive trading methodologies into one symphonic system? Just a couple of examples of the challenges which over the years have resulted in an impressive list of "First in the World" accolades.

Technical innovations without specific aims often result in more and more demands being placed on the user. At GRYPHON Systems, we don't believe in that type of development. A study of our research efforts over a decade will show that our work has been directed toward one goal- to present to the world a new approach, a way to offer analysis as true to life as technically possible with modules being as easy to use as "one touch on one button." This fundamental idea- you could call it human quality- is what gained GRYPHON Systems its worldwide reputation for uniqueness.

One thing you will notice about our modules is that highly advanced technology is discreet. It takes more upon itself and asks less of you. And, as a natural consequence, a simple striking design emerged.

True harmony of form and function spells beauty in any language.

Two

NOT SO LONG AGO, a few of the members of the design team got together for wine and melon to talk about the type of individual who invests in THE GRYPHON. It was a casual get together, more conversation than meeting; an easy back-and-forth as corporate interchanges go.

A question came up, however, which focused us all on a single point. It seems that a heavily talented friend had asked a member of the design team if THE GRYPHON could be properly seen as a 'fast lane' product. Was it, as he had been told, the trading system to own- one more sophisticated statement he might make within his home?

Frowns went all around. Embarrassment was in the air for this distant friend.

The conversation that ensued distilled a single answer. It was that THE GRYPHON was meant only to place in the trader's hands analytical efficacy for all who chose to own it. The esteem in which it is held would not rub off on the owner. To us, using our products for social definition seemed a silly, quaintly adolescent idea, a quest better suited to the many more visible, if less valuable, symbolic products in the marketplace.

We felt that THE GRYPHON was such an easy product to own that its value would stand without the crutch of status. Its sophistication and its identity lay with its ability to analyze the markets without coloration and with its ability to keep trading at the forefront and technology parked out of the way.

So it went. Our friend with a quest for a 'message product' made us think quite hard about what we were trying to achieve with the system. Consensus about his need could only be reached tongue and cheek. It was simply decided that, while he may well end up owning THE GRYPHON , we would not in our hearts consider him to be one of our customers.

At one time or another, with one group or another, such talk goes on at GRYPHON Systems. It shapes our development efforts and loosens up the future for us. Perhaps it is not all that important that you know this, but we will wager that the effect of these conversations is half the reason you are interested in our products in the first place.

Hard to tell why no one ate the pear. Someone did say you couldn't trust a pear.

Three

WORD HAS IT that computer technology and a ceramic chip about an inch in diameter are going to relegate our intellects to the mists of memory. An interesting idea, shall we use our textbooks for placemats?

If, just for a moment, you direct your thoughts to securities trading rather that to the latest 'techno-fad' you will find that advancements in technology actually amplify the need for human intelligence. The human mind is now challenged with having to evaluate an ever increasing lineup of sophisticated products to use in analytical activities. If you are serious about trading, we are confident that you will choose to add a computerized trading aid to your methodology.

When choosing among the literally thousands of computer programs and aids out there, philosophical decisions must be made. Most programs offer canned indicators which have been used by traders over the past few decades. Others insist that "mystical" waves or angles or even planetary positions (!) can be used to forecast market moves.

When we look past the ludicrous, we see that there is a small, robust base of trading programs which have something meaningful to offer. These are not the ones that tout their results, splashing publications with advertisements of huge dollar gains. Rather, they describe themselves in ways that relate to the design philosophy behind their analytical activities.

This is the way to evaluate the best module for the user. By studying the methodologies behind the program, the trader can then, and only then, begin to make an informed decision. Therefore, we at GRYPHON Systems would submit that, with each new technological development, more intellectual prowess is needed if only to evaluate the actual abilities of the "fruits" of the relevant advancements. Sadly, we are now faced with having to expend significant effort evaluating the components of our toolbox. And, make no mistake, all computer trading aids are just that- tools. All aids, including those offered by GRYPHON Systems, serve to inform the trader, not to replace him.

All complex activities from aircraft control to surgery to trading can only be successfully handled by skilled individuals. Technological aids are essential in all such endeavors but they do not replace the user, they simply augment his efficacy.

A

Friday, September 01, 2006

Sally Fastmail Subscribers

For those of you who are getting intraday Sally insider updates through Fastmail, you should be aware that Fastmail is getting funky, it was down all day yesterday, and still down today... and therefore sally alert emails will be affected until they are back up.

A