video test

5-Year Yield

5-Year Yield on a third push down after breakout. An A-B-C corrective reaction up from this would be textbook.

SRS

Taylor days – post game analysis

Doing some end of week analysis I was struck by the similarities between the Sell Short Day on Thursday (Dec 4th) and the Buy Day on Nov 21st.

Rather than being classic Taylor days (failed test followed by a swing in the other direction) the coils that formed on these days made them more difficult to read at the time, at least for me.  

(Though the market had clearly failed to get any momentum beyond the previous day's range, in both cases the Opening Price was holding and Value was being built in the direction of prior two days.)

The attached charts show the similarities between these two days and the subtle clues that showed the auction had indeed changed direction (before the breakouts).

Chart1: Sell Short Day (December 4th)


Chart2: Buy Day (November 21st)


n.b.
LMF = Low Made First
HMF = High Made First
OP = Opening Price
VA = Value Area
PDL = Previous Day Low
PDH = Previous Day High

SRS

Can high liquidity + low volatility = high risk?

Rick Bookstaber Blog Re-Print (note the date):

THURSDAY, AUGUST 23, 2007

Can high liquidity + low volatility = high risk?

Lower volatility can mean higher risk. Here is how I think we get to this paradoxical result.

With the growth of hedge funds over the past few years, more and more capital has been scavenging for alpha opportunities. When anything moves a little out of line, there is plenty of money ready to pounce on it. That is, there is more liquidity. And this is great for the liquidity demanders – for example a pension fund that has to invest a recent inflow – because they don’t have to move prices very far to elicit the other side of the trade. And that means lower price volatility.

The lower volatility in turn leads to higher leverage. One reason is that many funds base their leverage on value at risk, and they calculate value at risk using historical volatility. So when there is lower volatility they can lever more and still stay within their VaR limits. A second reason is that as more capital flows into the market and as leverage increases, there is more money chasing opportunities. Alpha from the opportunities is thus dampened, so a hedge fund now has to leverage up more in order to try to generate its target returns. And so the cycle goes – more leverage leads to more liquidity and lower volatility and narrower opportunities, which then leads to still higher leverage. This cycle is not much different than the classical credit cycle – which it is a part of this time around – where financial institutions make credit successively easier and easier because of competitive pressure and an environment that has, up to that point, been clear sailing.

This then gets to the higher risk. Because the real risk in the markets is not the day-to-day volatility, it is the risk of a crisis. And as I argue in A Demon of Our Own Design, high leverage is one root cause of crisis.

Bernanke has said the hedge funds “provide a good deal of liquidity in the markets and help the markets work more efficiently.” And that should be good, right? Well, it depends on how they are getting that liquidity. If it is through leverage, there may be a cloud inside that silver lining.

This relationship between liquidity, volatility versus risk is hard to observe, because there is nothing in the day-to-day markets to suggest anything is wrong. In fact, with volatility low, everything looks just great. We don’t know that leverage has increased, because nobody has those numbers. We don’t know how much liquidity will be forthcoming if there is a market stress, nor do we know how many of those who are the liquidity providers in the normal, quiet market times will move to the sidelines, or turn into liquidity demanders themselves. On the surface, the water may be smooth as glass, but we cannot fathom what is happening in the depths.

link:

http://rick.bookstaber.com/2007/08/can-high-liquidity-low-volatility-high.html

get shorty

hey guys! 

happy holidays to you all. I have not traded in the several weeks/ months due to the arrival of my new son Kingston Carter and a few major surguries to try to fix my nose once and for all. He is our first child and we have been waiting for an adoption for 3 years! Also may be time to hang up the gloves....:->.

Noticed an interesting tendency based on the 2 period r.o.c. in the sp500 market. There are several disclaimers..... 

1. this is not a system (no stops etc)

2. earlier data 1980's does not test out as good (but i believe 80's to early 90's data had different microstructure issues)...

Anyway... here is the idea...

1. sell a 2 roc change up in the sp when below a 20 day simple moving average  and try the williams  type 1st profit close for a few days.

dangerous i know in any market, but an interesting tendency worth studying.

results on tradestation with code at end (not sure how great my data set is here.. im in the process of moving into a new house and grabbed this from an aqcuantance)

Period	Net Profit	# Trades
YTD	$16,275.00	9
12 month	$16,275.00	10
07	$18,325.00	8
06	$12,300.00	4
05	$8,025.00	7
04	($9,925.00)	7
03	($250.00)	2
02	$8,650.00	10
01	$4,250.00	8
00	$22,025.00	11
99	$3,200.00	2
98	$2,400.00	8
97	$6,612.50	5
96	($4,200.00)	5

 Performance Summary:  All Trades                 

  Total Net Profit $87,687.50  

 Open position P/L $0.00 

Gross Profit $195,587.50   

Gross Loss ($107,900.00)         

  Total # of trades 86  

 Percent profitable 77.91% 

Number winning trades 67     

Number losing trades 19           

Largest winning trade $11,000.00  

 Largest losing trade ($19,050.00) 

Average winning trade $2,919.22   

Average losing trade ($5,678.95)

Ratio avg win/avg loss .51  

 Avg trade (win & loss) $1,019.62           

Max consec. Winners 18   

Max consec. losers 2 

Profit Factor 1.81

  Max # contracts held 1 

Account size required $24,525.00   

the code is below for 2000i:
if  marketposition =0 and  c <> (c[2]+average(truerange,20)) then sell close;if  marketposition =-1 and c <  entryprice then exitshort at close;if barssinceentry=4 then exitshort close; Interesting that the short idea even worked during the great bull of  95-00 and you would expect to work during the great bear of ought-eight. maybe some plungers can add to this idea. Happy holidays and c ya in the new year! mindful

Stocks

TIPS Spread

Realized Volatility Since 1928

ES Initial Balance Stats

The Initial Balance (IB) is the price range established in the first hour of trading. Peter Steidlmayer (creator of Market Profile) believed that the first hour was when the locals would attempt to find a price area where two-sided trade could take place.


Chart 1: IB proportion of the day's range frequency distribution

IB mean proportion of the day's range: 51%

IB median proportion of the day's range: 48%

IB median proportion when IB range is NR7: 37%

IB median proportion when IB range <= 60% of 10-day Avg: 35%

IB median proportion when IB range <= 80% of 10-day Avg: 40%

IB median proportion when IB range >= 150% of 10-day Avg: 64%

IB median proportion when IB range >= 200% of 10-day Avg: 80%

Chart 2: IB proportion of day's range vs. IB % of Avg


Chart 3: IB proportion of day's range vs. IB range

Range extension beyond both sides of the IB: 37%

Extension beyond both sides of IB when open outside VA: 28% ^#

Extension beyond both sides of IB when open inside VA: 39% ^#

VA = prior day Value Area

Data from ES day session from Nov 1st 2007 unless otherwise specified

#: This data is for ES day session from April 10 2008 - I will update these stats if they change markedly as the sample size increases.

SRS

Balance region

Chart 1: 10-Year Notes – 5 days of overlapping value


Chart2: 10-Year Notes – Composite Market Profile of the same 5 days

Watch for a breakout from balance. If price is accepted beyond the balance region the market will probably continue to auction in that direction for at least a few days. However, a false breakout (failed auction in MP parlance) can create short terms excess and lead to a strong move back through the balance area and out the other side.


Chart3: ES – 10 day Composite MP: The market is in the process of carving out a balance area between the October 6th gap and the October 10th low.

SRS

THE OPTION STRATEGIST WEEKLY UPDATER 10/17/08 by McMillan Analysis Corp.

Stock Market

After another extremely volatile week, the technical picture has improved slightly, but not universally. The massive oversold condition continues to exist and has now been in place for at least two weeks -- longer, by some measures. There is no better place to start than with the chart of $SPX. Figure 1 continues to show $SPX in a severe downtrend, with the 20-day moving average (currently near 1080) also still declining. That is bearish until a pattern of higher highs and higher lows forms on the chart. One thing that has been clear about this market is that it makes large moves -- moves which typically have taken days or weeks in the past -- in a matter of hours or days. From that perspective, it is possible that the pattern of higher highs and higher lows has begun to form. Last Friday's decline reached $SPX 840; the large rally early this week carried to 1040 (intraday, with a closing high at 1003); today's decline fell to 865 and then a late rally ensued. Thus a "higher low" was put in place. If this rally continues, and closes above 1003 and/or trades above 1040, then technically a short-term series will have formed the requisite higher high, higher low pattern. The equity-only put-call ratios are potentially nearing buy signals. The standard ratio has, in fact, generated a buy signal. The weighted ratio is another matter. Our computer analysis says that this, too, is a new buy signal, but one can plainly see that it looked that way a couple of days ago, too -- and wasn't. Still, the weighted ratio is very close to a buy signal, if not already on one. Market breadth is a different matter. Nothing reflected the deeply oversold nature of this market any better than the devastation recorded in breadth. Breadth needs to continue to improve in order to generate buy signals from this indicator. The volatility indices ($VIX and $VXO) registered all-time highs this week as well. $VXO topped out at 103 last Friday (when traders were buying index options in advance of the potentially volatile events of the upcoming weekend). $VIX, however, made its high just today -- at 81. These are both all-time highs. As our readers know, a spike peak in volatility indices is a short-term buy signal. Today's action alone constitutes a spike peak, as both indices finished 14 points below today's highs! However, a true intermediate-term buy signal doesn't occur until the trend of volatility changes. That trend is still upward (see Figure 4). $VIX would have to close below 55 to threaten the current steep uptrend. In summary, the oversold conditions continue to exist. But oversold does not mean "buy." However, there are some true buy signals setting up as well: equity-only put-call ratios, spike peak in $VIX, potential higher high, higher low in $SPX. As a result, we feel that some bullish strategies can be attempted with the realization that any probe below $SPX lows at 840 would negate all bullish setups

McMillan

THE OPTION STRATEGIST WEEKLY UPDATER 10/17/08 by McMillan Analysis Corp.

Stock Market

After another extremely volatile week, the technical picture has improved slightly, but not universally. The massive oversold condition continues to exist and has now been in place for at least two weeks -- longer, by some measures. There is no better place to start than with the chart of $SPX. Figure 1 continues to show $SPX in a severe downtrend, with the 20-day moving average (currently near 1080) also still declining. That is bearish until a pattern of higher highs and higher lows forms on the chart. One thing that has been clear about this market is that it makes large moves -- moves which typically have taken days or weeks in the past -- in a matter of hours or days. From that perspective, it is possible that the pattern of higher highs and higher lows has begun to form. Last Friday's decline reached $SPX 840; the large rally early this week carried to 1040 (intraday, with a closing high at 1003); today's decline fell to 865 and then a late rally ensued. Thus a "higher low" was put in place. If this rally continues, and closes above 1003 and/or trades above 1040, then technically a short-term series will have formed the requisite higher high, higher low pattern. The equity-only put-call ratios are potentially nearing buy signals. The standard ratio has, in fact, generated a buy signal. The weighted ratio is another matter. Our computer analysis says that this, too, is a new buy signal, but one can plainly see that it looked that way a couple of days ago, too -- and wasn't. Still, the weighted ratio is very close to a buy signal, if not already on one. Market breadth is a different matter. Nothing reflected the deeply oversold nature of this market any better than the devastation recorded in breadth. Breadth needs to continue to improve in order to generate buy signals from this indicator. The volatility indices ($VIX and $VXO) registered all-time highs this week as well. $VXO topped out at 103 last Friday (when traders were buying index options in advance of the potentially volatile events of the upcoming weekend). $VIX, however, made its high just today -- at 81. These are both all-time highs. As our readers know, a spike peak in volatility indices is a short-term buy signal. Today's action alone constitutes a spike peak, as both indices finished 14 points below today's highs! However, a true intermediate-term buy signal doesn't occur until the trend of volatility changes. That trend is still upward (see Figure 4). $VIX would have to close below 55 to threaten the current steep uptrend. In summary, the oversold conditions continue to exist. But oversold does not mean "buy." However, there are some true buy signals setting up as well: equity-only put-call ratios, spike peak in $VIX, potential higher high, higher low in $SPX. As a result, we feel that some bullish strategies can be attempted with the realization that any probe below $SPX lows at 840 would negate all bullish setups. Charts: http://www.optionstrategist.com/products/advisories/hotline/charts.asp

October 14 - 15 Head & Shoulders example on ES

Yesterday, on the close I made a comment that the indexes had the potential to set up H&S patterns to watch for going in to today. Some members had difficulty seeing the pattern. Here is it on the ES, other indexes had similar patterns.

Best to your trading

Alavi

MacDonalds Weekly H&S

Had a nice clean break off that neckline. Measure Move is at 52 area

September Price-Volume Profile

Playing with my new software. Notice high volume points, value area, and single prints for September...

Extreme VIX Statistics

Thanks!

Thank you SRS for the detailed info. Really helps me as I'm new to Market Profile. Much appreciated!

Value Area Rule - Market Condition

Hi Cleon,

Here are some general examples of the influence of market condition on the VA rule:

When the market is an a trading range – coming into balance – you often get 1 day up 1 day down sort of action. During such a noisy environment, in general the odds of the prior day VA getting filled would be higher than average. See Chart 1

When this happens the market is effectively carving out a higher timeframe value area, which will often be reflected by a 60 / 120min low ADX. See Chart 2 (same 4 days in Bund as Chart 1)

(This biref Steidlmayer article is worth reading.)

In a trending market, an open out of value in the direction of the trend (i.e. above the VA in an up trend) that then tests back into the VA, is generally less likely to fill. Gaps against the trend – for instance an open down below the prior VA after a high-to-low day in an up trend – are more likely to fill than average (this scenario would be analogous to a pinball buy). See chart 3

Dalton: “The direction of the current longer-term auction has an obvious influence on the momentum, or strength behind the value area penetrartion. When price auctions up into value during a buying trend, for example, the chances of continuation are much better than if the market were in a downward trend."

 

There are also some conceptual issues to be considered when assessing the value area of a particular day:

1. Value is created by rotations. Although a Value Area can always be calculated, those days which auction continuously in one direction are indicative of a market that is searching for a fair price. In other words those days that exhibit little price rotation (i.e. trend days) do not produce a true Value Area.

2. Dalton: “Narrow value is a sign of poor trade facilitation and lower volume. Because volume slows price, narrow value areas are more easily traversed than wider, high volume areas. Therefore, the Value Area Rule carries a higher probability when price enters a narrow value area.”

These are just some general points. Others may disagree with them and I do not in any way wish to present myself as some sort of expert. But, I believe these examples go some way towards explaining why, when assessed without taking into account market conditions or market logic, the VA rule is closer to a 50% tendency.

Tendencies such as the VA Rule, violation stats or the HoD/LoD times, can form the strategy, but effective tactics are still needed to enter (LBR set-ups) and manage (trail stops) each trade.

SRS

Great comments guys! Thanks SRS for elaborating on the Rule as well. I pulled the quote from Market Delta, but I would assume Dalton would be the definitive source as per your comments. (Mind over Markets (p279) does not state the half-hour periods must be consecutive <= good to know!!)

Yeah Tiny, the stop would be an issue if you were trying to take this trade. When you noticed the 2nd penetration, you would have to decide whether or not to 'go with' or wait for pull back entry. My thought was simply that when we did get that afternoon pullback, if you had this data in mind, it could influence your decision on whether to be long or short around the 1200 pivot, but you would have to have some confirmation on your bias regardless I suppose. I did not take advantage of this, but it just perked my interest in looking at higher timeframe patterns which is something I am personally working on these days.

Glad to see we got some discussion going here!

As an aside, to your point SRS, I would assume that one simple condition that could affect the outcome would be the range of the initial VA. For example, the day after an NR7, you could have a very narrow initial VA, with a small gap outside of that , then two taps back inside before a trend day emerged...(more of a question than anything as I'm fairly new at this)? Whereas, I would also assume, that a wide initial VA, with a gap, then then has price retrace back into the VA for two period, could have a higher likelihood of crossing the VA range??

Would be interesting to see if Dalton broke down this Rule by looking at the ratio of the gap to the VA range or something like that.

cleon

P.S. I just realized that there was probably a trade around the likelihood of a return to the VAL after the market was not able to trade back below 1193?? There was a mini double bottom on the 5m and a 1600t div at that point (noon'ish). What do you guys think - too much hindsight, or it had potential at the time statistically?

More on the MP 80% rule

The big problem I see with this, and Cleon pointed it out in his post, is the stop loss. This is like the Larry William's OOPS setup, the Burning Dog, the 5SMA trade, or the BB Z day trades, where the stop has to be "end of day" or "none" and a target is used as the exit. This makes it MUCH more difficult to take without further analysis of the market, in my very humble opinion.

tinymjs

MP Value Area Rule (80% Rule)

As cleon pointed out in the prior post the Value Area Rule  is typically stated as:

If the market opens outside the prior day's Value Area and trades within that VA for two (consecutive *) half-hour periods, then the market has a good chance (frequently quoted at 80%) of filling that entire VA.

* Mind over Markets (p279) does not state the half-hour periods must be consecutive, just that the market show acceptance by printing inside the VA during two half-hour periods.

Day Session ES from 10th April 2008

Trading Days: 119

Open outside prior day Value Area: 76 (34 Above, 42 Below)

Two half-hour periods (double TPO) within prior day Value Area: 41

Completely filled prior day Value Area: 16 (39%)

Two consecutive half-hour periods within prior day Value Area: 40

Completely filled prior day Value Area: 16 (40%)

Completely filled prior day Value Area in single prints: 3

Obviously this is far from an extensive sample size and therefore the reliability of these stats is open to question.

However, the stats are consistent with Dalton's view in Mind Over Markets (p280):

“If a trader enters a Value-Area Rule trade without evaluating other market conditions, the probability that price will trade all the way through the value area is little better than a flip of a coin. 

"The power of the Value -Area Rule lies in your interpretation of surrounding market conditions. Through an understanding of the confluence of balance, value area width and market direction, you can identify the situations during which the Value-Area Rule offers a high degree of reliability.”

I will update theses stats in the future, if they change markedly.

 (It should be noted that the Value Area on any given day can vary across quote vendors i.e. CQG, eSignal, CISCO, Aspen, WindoTrader / Photon etc.)

SRS

VIX Futures 'Term Structure'

fchris

you can watch the interview here:

http://www.cnbc.com/id/15840232?video=866439825&play=1

Washington Post article here:

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/24/AR2008092401377.html

fchris

New email received

Dear American:
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.

Yours Faithfully Minister of Treasury Paulson

fchris

Cash S&P Prior Value Area

Chart 1: Market Profile of the Cash S&P from January through October 2004. After rallying for most of 2003, the market entered a period of rotation and came into balance around 1125.


Chart 2: Weekly Cash S&P. The red box highlights the 2004 10-month balance. Will this prior Value Area provide some support?

SRS

9/4 End of Day Volume at Price

ES - Wolfe Wave

Wolfe Wave example on 1600-tick ES.

Pattern objective is the lower trendline.


Follow up:

Not all WW work out as nicely as this!

SRS

Inflation Sep 2008

well

Is my PC running ok, or do I need a new one??

Summery:
How to look at the performance of your PC.
What type of a trader are you.
Operating systems.
Type of CPU’s, RAM.
Custom PC builds.


First off lets start be looking at your current PC and see what see how hard its working to determine and weather you need a new one or not. Start by “right” clicking on any part of the “Start” bar, you should get a pull down menu and two thirds of the way down you will see “Task Manager” select it will start the program.

You should see the following, two line charts and two bar charts. The line charts are a graph of history and the bar is instantaneous. One is monitoring CPU usage and the other is monitoring memory usage. NOTE: if you running a dual core or a multi-threaded CPU you CPU graph will be divided into two windows. To combined the two, go to tool bar
View-> CPU History->One Graph, all CPU’s this will allow you to see everything on
one graph. You can also control the update speed View-> Update Speed-> (low, Med, or High).

Also at the bottom we have some numbers in four boxes. The one that’s most important to us is the “Physical Memory” look at the top two. “Total” and “Available” this is a seven digit number (remember we are talking about megabytes). NOTE: if you have 4gigs Windows will only show 3.x gigs. Why is that? That’s a complex subject I don’t want To get into it here. So see what you have available. Keep in mind you want some overhead. How much? That is all user dependent. But if you have every possible application that you would use open all at once and you have less then 100-200Megs left, you are likely running out.

Now lets look at the CPU graph. If the markets are closed you will most likely see the CPU at 4-10% at best. With this window open start up any application and see what happens… what you will want to do is run this program during trading hours and see how much CPU power / memory its using.. keep in mind when markets are very active the usage will be higher. So have a look right at 9:30-10 and then at lunch and then that 2-3pm. That way You get a feel of what is happening in different market conditions.

The first 2+ hours and the last 2+ hours is when you’ll see the highest usage. And also
most of the day on trend days. Since the graph is not very steady you will need to eyeball the average amount of usage on the CPU. if you are at 60-80% of usage on the active hours of the day, you are most likely starting to run out of horse power. And most likely when the data gets very bursty it gets to 90-100%.

Now you have determined that you are in need of a new PC what kind should you buy? How much should you spend? Well that all depends on what type of trader you are.
Are you trading of daily/weekly chats? Do you make 5-7 trades/week? Do you have one monitor and look at 2-3 charts at any given time? Then you will mostly do fine with the standard $500 PC from DELL or HP.

If you are a more active trader with 2 monitors/desktops and each desktop has 2-3 workspaces and 3-6 charts then you will need some thing with more power. you can go to the Dell XPS class of PC’s is a good one will start at $900 but after you add extra RAM (if you need it) and maybe a couple of other options like a dual DVI video card and windows XP you will be at 1000-1200 for sure. NOTE this is for a dual core PC.

Now if you are a trader that’s got a chart application like TS with 4+ monitors 4 desktops with 2-5 tabs in each 4-6 charts in each tap and one streaming all kinds of quotes, and also running a second application like Photon to execute your orders then
You need a “Gaming PC” with lots of power. Here is where the problem comes in..
Dell and HP do not want to deal with people like that. And if there do they send you to there “business class” department and now they want $4000-$6000 to build one.

So what do we do?? Well the there are a number of places out there that will build
A good high performance PC for less then Dell or HP would charge.

So how do we build one? Let me first address the operating system then we can go onto the hardware selection. Ok. XP Pro or Vista. This is a tricky topic but I will give you my take on it and you will have to ask others and come up with your own decision.
Vista is the next and up coming operating system from Microsoft. But just like all there other systems it will take time to get all its issues work out. Most of the problems are user related. The fact is its new and we don’t know how to use it. It tends to be a bit over secure and we have problems getting what we what out of it. Some people tried it and loved it other hated it. So here are my thoughts. Vista needs lots of resources to run. And at the end of the day you have to ask yourself what does vista do for me that XP doesn’t?
So why upgrade my hardware and add Vista to slow it down? And have to deal with a new operating system that I may not be able to operate properly? XP will be around for some time to come. So I’m fine with XP Pro. Now onto the hardware section.

I will try to keep this as simple as possible so you can get an idea of what to buy.

The two main types of CPU that Intel offer at this time is a core 2 (Duo) which most people are calling dual core and a Quad Core. So what is a core 2? It is a CPU that has
2 ALU’s (Arithmetic logic units) this is the thing that does the all the math work.
By having 2 ALU’s running together sharing the same Cache (on chip RAM) it can run programs faster then a signal ALU. And Quad is nothing more then 2 dual cores that are in the same package. One important option to get is a CPU with lots of Cache. The more
The better the performance will be for every day user this is not a big deal but for us it is.
If you are in the “customize” CPU section at Dell or anyone else you will see this.

Onto the RAM, for RAM size everyone seem to have 4gigs in there PC and since its cheap you can just go with 4 and not have to worry about having to upgrade it at a later point. Most ram speeds I see at Dell are 667Mhz and some times 800Mhz, if you see the 800 and you don’t mind the price get it. If you are looking at Ram that seem a bit expensive or it has “ECC” in the name, you are looking at a server grade PC that’s not what you want or need.

Video cards. If you are running only 2 monitors (24” or less) get a dual DVI card. One with 256MB of ram is plenty, we are not playing games so we don’t need heavy graphics processing. And there for the 512MB maybe over kill.


So for most users you can go to Dell pick a dual core build what you need right over the web. You can also build this at a custom builder it may or may not be cheaper. I have not tried. This will/should run two trading applications with out any problems. It’s always going to be application dependent. I hear that Photon needs lots of CPU power and so does TS the two of them together may be a problem. I don’t know for sure.

So now if you feel you need more then that, than its time to go to someone that will build exactly what you need. There they will build you a quad core with all the ram you want and as many video cards as you would like so you can run 4 to 6, 30” monitors if you’d like. I have found the following places that will do this for you. http://www.magicmicro.com/ and http://www.buyxg.com/ . I haven’t bought anything from them yet.

I know this is not an easy subject for most. So if you still have questions or need help selecting the right PC let me know and I will help.

MP for 8/19 - balance day anybody?

MP for ES from today for those who don't get mp charts

notice that every single period touches the POC

today also = NR7

maybe trendy wednesday / breakout mode leads to a nice move away from this area tomorrow

Key US Index vs Key Int'l Index

ES High / Low violation stats

Data in ES day session from Nov 1st 2007. As the sample size increases, I will update the stats if they change markedly.

Key: 

HH = Higher High  (ie high violation)

LL = Lower Low (ie low violation) 

HMF = High Made First 

LMF = Low Made First 

VA = Value Area 

TFF = Trade Facilitation Factor (A simple method of quantifying the shape of the profile)

RF = Rotation Factor (A simple way to measure the trend of the day - see Mind over Markets p112 - p115)

Neutral Day = Day which trades beyond both ends of the first hour's range 

SRS

60m 'Buy' Anti - image

Sorry gang...here is the chart for the comments below.

60m 'Buy' Anti

Here is an example of a picture perfect 'Buy' Anti IMHO. It includes all the components mentioned in the Street Smarts book and the LBR trade setup library. It is rare to seem them form this beautifully - especially on a HTF. Now imagine this being a 3m, 5m, 800t, 1600t etc. chart...what fun you could have!

THE OPTION STRATEGISTWEEKLY UPDATER
08/08/08
by McMillan Analysis Corp.
Stock Market

This is a market that has had plenty of opportunity to rise strongly, but has really been unable to do so. Even so, the current trend is mildly bullish. $SPX has carved out a series of higher lows -- at 1234 and 1247 -- which, when connected with the July bottom at 1200, form a rising trend line. As long as that trend line exists, the situation is positive. However, considering that nearly all of our indicators have simultaneously been on buy signals, the current rise is a weak one. It is perhaps most reminiscent of what happened just a few months ago -- in January (see Figure 1). At that time, the marked bottomed in mid- January, after a massive oversold condition arose (partly as a result of Societe Generale dumping the positions of a rogue trader). That oversold rally generated only meek gains but lasted until the end of February, before another bout of selling (surrounding the run on Bear Stearns) took the market to new lows amidst another oversold condition.
The equity-only put-call ratios are both still bullish, and as such they represent perhaps the most positive thing about this market right now. These buy signals came from fairly high levels on their charts, and that should be helpful. They will remain bullish until they roll over and begin to trend higher once again.
Market breadth (advances minus declines) has been lackluster on this rally. Typically, if this rally were the start of a new, truly bullish leg of the stock market, breadth would quickly register overbought conditions and remain overbought for quite some time during the initial phase of the rally. That has not happened.
Volatility indices ($VIX and $VXO) have acted more bullish than most of the other indicators. $VIX has fallen sharply from the July highs, and that is bullish. Furthermore, it clearly made new relative lows (in contrast to $SPX, which has not clearly made new relative highs). Thus this down trend in $VIX is bullish. $VIX will remain bullish as long as it remains below 24.
In summary, we don't have any sell signals from our indicators. In fact, most of our indicators are bullish -- although some are rather tepid. As a result, we are retaining a bullish attitude -- an attitude, I might add, that has gone from enthusiastic to reluctant -- as long as $SPX remains above its bullish trend line. A close below 1247 would be negative, and a close below 1200 could be significantly bearish.

charts:
http://www.optionstrategist.com/products/advisories/hotline/charts.asp

An Index As Big as S&P's

note: the MSCI EAFE index is the gold standard in index investing with an estimated $3 trillion indexed to it. This is the index international funds (that are based in US) watch for relative performance (just as S&P's are the benchmark for domestic funds).

This is the rationale for the EAFE index as an important barometer. I have noticed how the S&P's and this index have an interesting relationship that tends to get resolved with one playing catch-up to the other. These indices are highly correlated on longer-timeframes due to globalization. Attached chart shows a breakdown of the worlds total market value by country. The red box is what is included in the EAFE (symbol EFA) -- note that this index has as much market value within it as the entire US market does -- so this is the ultimate in global coverage. The US and EAFE together make up ~85% of the worlds total market value.

Market Profile – ES and NQ

Chart 1: ES MP shows signs of underlying higher time frame buying


Chart 2: NQ from the gap down on June 26 to date. The MP shows a well formed bell shape curve = balance. Just a different view of the 120-min coil that everyone has been watching.

SRS