A Y2K Christmas Gift from me to you -- How to do technical analysis of the markets regardless of Y2K gyrationsgreenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread
Well boys and girls, Moms and Dads,
My work here is about finished. Time is running short and we've about reached the time to say goodby. So, before it gets any later I wanted to give you all a Christmas gift. Knowledge. Information.
As you know, I'm an old retired commodities broker/trader. (some would say not that old while still others wonder if I had any dinosaur friends as a kid) I've tried to impart some of what I've learned in the gold and precious metals, the oils and even some of the stock markets for a 'technical' analysis. I know, many of you have wondered how I based all of my comments. Some marvelled at my track record. Well, if you paid close attention, I got out on some limbs there too from time to time, and darn if someone didn't saw em off. So, it's not infallible nor is it easy to do, however, I'm going to impart for you information and instructions for you to learn how you too can keep tabs on these markets. I don't do this to recommend you use this to 'trade' the markets'...cause frankly, I don't know how long the markets are gonna be around, or if they'll come back, but I'm figuring they will sooner or later come back, and this info will be useful once again. So, here goes. Take notes. Save. cut and paste or throw away. I posted much of this earlier on a thread started by Andy but I felt it deserved its own thread, as some of you might wish to comment or ask questions as it is kinda complicated.
For those of you who want to learn some of the secrets of the big boys... cause this is how the big boys and those computer programs trade... take notes here.
The big boys and the big computer trading programs will rely on this DMI/ADX type of oscillator as one of their 'key' elements they use to decide on when to buy and when to short a market. If you want to make money like the big boys learn how they do it. This applies especially to commodities, but not necessarily all stocks. (though stocks are acting more like commodities every day).
There are many software programs that you can get that will enable you to program in Price charts for any commodity (or stock) and for any month. The Link I'm going to give is for commodities only and it is a website that provides on line futures trading. They have a free 30 day trial program with no obligations to buy anything but after wards they want a monthly subscription to their "charting" programs.
The website is Futuresource. It is at www.futuresource.com You will see where it say in a little top at the box where it says "become a free member"... click on that and follow the directions to registration.
Now... once you're a member go to the "charts" section and you'll get this URL:
You won't get there without registration though.
Now, once there you'll see a form for chart parameters.
See the "symbol" box? If you want gold, click for "Gold-Comex" Then what month do you want to see? Currently the 'power' month for gold...the current month with the most contract volumes...right now its February, 2000. Until a couple of weeks ago it was December 1999 contracts but Dec. is about to expire and everyone has bailed except for those wanting to take possession of their gold.
Now...continuing to fill the form out...You've got "gold-comex" You've clicked for month "Feb" and the year "2000". NOW...for
"Type" -- click on "bar" because you want a bar chart for prices. Then click on "period" which means the period of time that each little up and down line represents. Periods of time can be a line for a whole days price range, or a whole week for a line or a whole month, or it can be an hour or half hour or 15 minutes or 5 minutes or 1 minute or you can have a "tick" chart where you see patterns based upon each trade (that will cross your eyes for sure). There's also perpetual and variable...but don't worry about those, I've already confused you enough as it is. JUST CLICK ON "DAILY" for the period selection.
NOW NEXT: Look at the term "Study" ... THIS IS THE GOOD STUFF HERE... This is the "PAYOFF" part. This will list a variety of study options. Most of these are what we call "oscillators" which are logarythms that are measuring the price movements looking for patterns and or strenths and weaknesses in price patterns in both value of $$ and on time basis too. So...for our purposes of showing the DMI/ADX...here's how
Go to "study" click on and look for the following:
"Wilder's Dir Mvmnt Index-ADI (14,1,1,1)"
Click on that and select it. then you will see a box that says parameters with little open blocks underneath the "Study" box that now shows the Wilder Dir Mvmnt Index-ADI ... Note that those boxes are for those numbers to go into in that order, so box 1 gets the 14 and each other box gets a 1. This sets the parameter for the DMI or Directional Movement Index. (btw a guy named Wilder invented this hence the name "Wilder's DMI" for short.)
So now your almost set. Finally you note the bottom two boxes. "Density" and "size"... I prefer setting them to LARGE so the chart looks larger and easier to see and read.
And there ya go... just go to the top of that form and look for the grey button that says "get chart" and away weeee goooo. It will take a little while to download and set the chart. It will come up as 2 separate boxes for charts. First one is the "price" bar-chart where each up and down line and in the daily case it means each of those lines represents the price range for a day's transactions. You'll see that in the case of the Feb 2000 contract it started trading in August of 1998 on this chart..although there are no lines just dots. that is because no one was doing much trading in those months. The Feb contract didn't start getting much price action until last May so most of your oscillator activity will be based upon price action since May.
Note the lower box is the 'study' or oscillator box. You'll note in this lower box, in its upper left hand corner you will find the CURRENT numerical value of each of the 3 lines. Also, you'll note on the side of the graph certain numbers 20, 40, 60. This is a freebie and cramped for space so it won't give a full oscillator range which is zero to 100... a percent graph range... 100 is tops. The key is signals come when there is a crossing of the blue/red lines and the first color to reach above 30 indicates a buy/or short signal is given (blue=buy or go long and red=short or 'sell short') BUT there is the caveat that the 'gray' line must be below 20 and the crossing of the two colors must occur below 20 to get correct signal. If crossing occurs above 20 you get a non-confirmation and it means 'choppy' and erratic trading ahead. The rule is when the advancing line reaches the 80 zone consider getting out of the trade and taking your profits home with you for awhile and wait for the next signal. It might take weeks or months to see another good signal again. They don't happen all that often, not the good low-risk ones that have lots of elbow room to maneuver for beginners.
Well, this post has gone on long enough...and I've now shared with you the "secret family recipe" of the brokers and gurus on Wall Street OH, btw, that will be $5,000.00 please. Yup some folks would charge that much for teaching this kind of information in seminars...some times more $$$ than that. Course it is in person and hands on with computers etc. and theory explained and yada yada yada to waste time to justify the high price. Gotta pay for that plane ticket and the hotel/conference room ya know...plus they just won't do it for free.
SO...there you have it...that's one of the prime tools the big boys use to trade the commodities and for some even the stocks. This whole approach is called "Technical Analysis" ... Guys like Andy have been coming in here talking about "did you hear this" or "that" blah, blah, well, that is called "Fundamental Analysis" and trades based upon the Fundamentals of news, PR releases, etc are called Fundamental trading. IF your trading is based upon the charts etc and not on news at all just the charts... that is called "Technical" trading. Each have merits, but the Technical takes out the emotion that can cause errors. That's why I became a "technicals" trader many years ago. It's much safer, (well sortof).
And with that I take my leave. There's no need for me to poke my nose here commenting any more on the markets. You have the tools and the knowledge, now go use them for yourself and the betterment of all mankind. :-)
-- Dick Moody (firstname.lastname@example.org), December 20, 1999
Come on Dick, prognosis please on
OIL - on say 1st Friday of the year
Gold - ditto
After reading all the Oil/embedded threads do you expect an 'oil- shock" situation, bearing in mind that the 1973 recession was only caused by a 4% cutback on production.
You're not getting away this easily Dick! Yas gots ta earn yer money, laddie!
-- Andy (2000EOD@prodigy.net), December 20, 1999.
Well, Dick, what can I say? You are a scholar and a gentleman! I have just signed up at futuresource and set up my first two graphs per your instructions for gold and crude. What a great site. I have up to now been using Lind-Waldock stuff and chopping over to Nymex or Comex - this site has it all on one page... :o)
I understand what you mean about the markets - everything IMHO could go up the swannee after rollover, in fact Interested Spectator and others that I won't name are conviced that the Illuminati planned for a financial debacle when they first got wind of the y2k problem back in the late 60's- you know, that time when the ISO fields were being plotted with a year field of 4 digits - and lo and behold who should stall the decision and eventually overrule the committee's recomendation of 4 digits than, - wait for it...
And now, 30 years later, everything is about to go down the tubes...
You gotta admit, these guys are clever, very very clever, and their long term planning is, uh, impressive...
Anyway, on the off chance that I'm wrong or their plans are not quite so foolproof I have blown about $10,000 on crude and gasoline calls... actually I have 101 of the suckers, and will be selling some tomorrow that I've doubled in favour of buying more cheaper out of the money ($35 oil, 85c gas) calls... feb's are pretty cheap considering the leverage...
Of course should I be in the money after rollover then collecting should be a breeze, right :o)
Thanks again Dick - be sure to check in with us from time to time!
-- Andy (2000EOD@prodigy.net), December 20, 1999.
Hey, what can I say? The technicals tell us the story, but they don't give us a price. It could be $40 a barrel or $50 a barrel for WTI crude by rollover, OR it could be $25. However, I'd be inclined to say she's a goin up for awhile before returning back to a $25.00 level. That means I suspect that we're more likely to see oil going to $30 this week than back to $25.00. Yet, still I don't see oil rocking and rolling that much more between now and rollover. In fact, IF troops are put onto the streets and highways early next week that might also mean the feds might just declare an early 'holiday' for the markets and the banks!!!!! I don't know if anyone has thought of that one. NAhhhh they wouldn't do an early bank holiday would they? YEP, if they really knew that Y2K would get bad. And if it is going to be bad, they'll have the troops out on the 28th.
IF we see no troops out on the 28th or 29th and no early banking "holiday" then it means the gov't either doesn't know or is 'rolling the dice' which I don't think they'd do.
IF there is any credibility now coming in regarding cancelled leaves for Christmas in the military and the Ft Hood MP story and others posted here and elsewhere...if those are credible then it paints a picture that suggests the feds know its gonna be bad.
We see a little more of that with the UN report about the Gulf Oil nations not being compliant.
I may be jumping off the deep end here but these are little tell-tale signs of panic in governments around the world.
So, oil pricing in all of this? Hey, we may only have 5 more days to price oil and after that ??? Who knows? I'll GUESS...and that is all it is ... a brief reach up to or just under $30.00 assuming that there might be trading on the 12/27.
Should the markets stay up til CDC I still don't see much change in price without major announcements of some sort to really frighten the market, like Oil co execs admitting they lied. or Clinton admitting he lied. (FAT CHANCE OF THAT, RIGHT? Of course define what "is" is) So I'll stick to the at or just under $30 right up til CDC, cause I don't think anyone is gonna come clean and I don't think we'll see any smoking guns to panic things except the emergency declarations stuff.
-- Dick Moody (email@example.com), December 20, 1999.
They don't use a collection of indicators to give better confirmations? Oh by the by have you read the Phantom Trader articles at the Futures magazine site and if so what do you think.
Thanks for the link, by the way.
-- Squid (ItsDark@down.here), December 20, 1999.
I hate to see you go and I hope you check in every once in a while to share your views with us. IMO, your posts have been exceptional. You obviously have that "traders mentality," which enables you to assess the markets without being prejudiced by your fundamental opinions. The hardest part of technical analysis is believing what you see and taking action on your work without thinking. You displayed a mastery of that trait and you will be missed. Thanks again.
-- mike (firstname.lastname@example.org), December 20, 1999.
Thanks for your efforts educating the forum members.
Merry Xmass and a safe rollover eh!
-- Brian (email@example.com), December 20, 1999.