i
-Please
scroll down for PTR's introduction to Market-View, Dow
Theory, Long Term RoadMap, and our aggressive MSAR
trading model-
PTR-MarketView:
Weekly summary
of our current analysis.
Mutual Fund
Investing and Trading Model,
Dow Theory and
Pivot Point Theory ,
Pivot Points, trading help
"No truth meets
more general acceptance than that the
universe is ruled by law. Without law it is self-evident
there would be chaos, and where chaos is, nothing
is. Navigation, chemist aeronautics, architecture,
radio transmission, surgery, music the gamut, indeed,
of art and science - all work, in dealing with things animate
and things inanimate, under law because nature herself
works in this way. Since the very character of
law is order,
or constancy, it follows that all that happens will
repeat
and can be
predicted if we know the law."
"Very extensive research in connection with what
may be termed human activities indicates that practically
all developments which result from our social-economic
processes follow a law that causes them to repeat
themselves in similar and constantly recurring serials
of waves or impulses of definite number and pattern. It is
likewise indicated that in their intensity, these waves
or impulses bear a consistent relation to one another and to
the passage of time."
Introduction-Rhythm
in Nature: Nature's Law
(1946)
R.N. Elliott
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--Please
scroll down to continue--
PTR's Market-View
is the main section or "core"
of our information service, and it is where we
place the vast majority of our near term and
intermediate term analysis and forecast. It is here
that we place access to both our short (truncated)
version and our long winded weekly commentary to explain
where we believe the U.S. Stock Markets are now and where
they are "most likely" to be heading in the future.
<Example: MV-Weekly Summary that
is posted on Friday nights.>
In this
weekly analysis and summary we have four time periods
that we comment on, and while the intermediate and long
term analysis and expectations do not change very often,
the near term and short term analysis are typically changing
every week.
FOR a QUICK EXAMPLE of the type of key
trading information our weekly summary provides for near term traders to
long term investors then click one of the following links:
<Short Term Analysis example: SPX candle charts for 12/8/06>
<Intermediate Term Analysis example: DOW's Gann chart for
10/1/2006>
<Long Term Analysis example from PTR's 2006 RoadMap--posted 1/25/06>
And, for the LONG-LONG TERM:
"They," who ever "they" are, say that a picture is worth
a 1000 words, so here is one that is worth 100,000,
if you already know how to use it?
<LongWave
mean and historical trend...US Dow Index 1900-2005>
The weekly PTR Market-View section is far to
massive to be adequately described here, but the
next "example," at the link below, shows a small portion
of a "typical" weekly post to it.
In this example, please note that we provide
simple and straight forward "signals" and "alerts"
that can be used to support every style of investing and
trading, from the ultra short term "day-trader" to the long
term Mutual Fund investor.
However, note that
this weekly report, or "review," also goes deep down
into the nitty-gritty of what is going on so that those
so inclined to "wallow in the details," so to speak, will
have lots of material with which to do so.
Again, we think the
only way to actually get the feel for this service is
give us test drive, eventhough, those so inclined will
have to risk a whole one month subscription since we give up
on the "perpetual trial scams."
<PTR's
Market-View: Main Menu Example for 6/25/06>
<PTR's
Market-View: Sub Menu (NYA) Example for
6/23/06>
Also in this section, we keep
a few very timely charts showing the major support
and resistance lines for the major indexes and/or
some key individual stocks. This next link shows a single
example of these charts .
<PTR's MarketView: Key Support/Resistance
example for 9/19/04>
<PTR's
MarketView: Typical S/R + GANN chart for SPY proxy
(for SPX cash index) 5/11/05>
<PTR: Free Menu>
In addition to
the key weekly analysis, this section also contains
a sub menu to the weekly Marketview reports where we
keep the links to any miscellaneous chart, graph, or essay
that we believe is currently active for the market.
An example of one of these charts follow at the link
below :
PTR's MarketView Miscellaneous charts example
for 9/26/04>
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down to continue--
PTR's Annual
"Road-Map"
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"I have but one lamp
by which my feet are guided, and that
is the lamp of experience. I know no way of
judging the future but by the past. For it can surely
be said that the future belongs to those who make ready
for it today"
(551
BC - 479 BC) Confucius
"Charts are records of past market movements.
The future is but a repetition of the past. There
is nothing new. As the Bible says " The thing that
hath been, it is that which shall be." History repeats
and with charts and rules we determine when and how it
is going to repeat. Therefore, the first and most important
point to learn is how to make charts correctly because if
you make an error in the chart, you will make an error in applying
the rules in your trading."
The
Basis of My Forecasting Method--The Gann Angles Course
(1943) W.D.Gann
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Introduction to PTR's
annual "Roadmap"
for the U.S. Stock Markets
.
Like
it or not, you and PTR are both in the business of
forecasting the future, a task that many academics and
social scientist claim is impossible to accomplish
and unwise to attempt. Needless to say, while
we are most likely more involved and closely linked
to this art of forecasting then the vast majority of our subscribes,
we are, essentially, all in this boat together and it's along
swim to shore...so to speak.
<Long Term Analysis example from PTR's 2006 RoadMap--posted 1/25/06>
The majority of you have money to
invest or speculate with, and you want to, or
need to, make prudent decisions about that money
from time to time. We, at PTR, also have the majority
of our free capital tied up in investments, or speculative
trades, and while we use some of the proceeds of this
service to purchase trading software, newsletters, and economic
analysis to help ourselves, and in the process to help you
too, we are primarily professional traders for whom this in
no theoretical or academic exercise.
As might be expected, we do
not agree with those who reject, out of hand, all
efforts to forecast the future, at least certain aspects
of that future. For example, if a couple asked
me to predict whether their next child would be a boy or
girl, I would quickly reply that I have no expertise in
that field and from my limited knowledge of the subject I
"highly suspect" that conception is a totally random event.
Would I be right or wrong?
Well, I
would most certainly be correct about my ignorance
of the subject, but my statement about "a total random
event" is the part which "highly skeptical." That
is to say, if I had taken the "time," and done the "work"
to research the subject, I may have found out that Mr/Mrs.
Unknown have already had seven daughters in a row (over
many years and without fertility drugs), and the "statistical
probability" of a women giving birth to eight girls in row
is only one in one million .
Therefore,
in this example, someone with the knowledge of those
statistics could make a "reasonable forecast" that the
next child would, "most likely," be a boy. Now,
can anybody say for certain, or even give assurances within a
"reasonable certainty" that will be the case? Absolute
not, and everyone should be highly skeptical of those
who say otherwise!
Wrapped inside this little analogy
lies the underlying basis of our job as forecasters,
commentators, and market technicians; as well
as, your job as subscribers. Yes, that's right,
you have a job too! In this job, you are the CEO,
CFO, and Chairman of the Board, we are only the Consulting
Engineers and strategist that research and advise you.
We do not make the final decisions because it's your money that
is on the line and not ours...directly anyway.
Like all
good executives, one of your primary duties is to
be "skeptical" of our opinion and the "supporting evidence"
for that opinion, and if there is little or no supporting
evidence then you need to start looking for a different engineering
and consulting firm. And believe me, there are plenty
of "consultants" backed up by "opinion only."
The way we see
our job is to "review" historical, statistical,
and technical trends, cycles, and macro
economic indictors to guide us in constructing a "road
map" to the future. Unlike a fixed roadmap, or
a travel plan provide by AAA, or some other travel agency,
our road map is both "dynamic" and "interactive."
We leave
our home with a fairly solidified idea of where we
are, where we want to go, and by which route we will "most
likely" take to get there. Never the less, we also
realize that we must stay flexible enough to change routes
or even our whole travel plans if we encounter important new
information indicating obstacles, road blocks, or major
detours in our path.
The
following "Roadmap" is our "best estimate" for
the most logical and probable "path" for the U.S.
stock market and the "key" inflection points of support
and resistance that will "tend to" trigger either a
continuation on up of the 2003-2004 rally or a new reversal
down into a correction or Bear Market.
This
roadmap is based the summation of all the technical
methods we use as well as all the fundamental based
information we are aware of at the time of it's writing.
The continuation of the 2004,
2005, and future "Roadmaps" is reserved
for subscribers
only
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to continue--
PTR's Trading Model:
MSAR
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"When you have eliminated
the impossible, that which remains,
however improbable, must be the truth."
(1891-93)
Sir Arthur Conan Doyle
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WHILE
the primary focus of our service is on the long term
trend and the "bigger picture," we have also included
some short term and intermediate term timing signals
that should be "very useful" to those subscribers who
trade the short term while planning and anticipating the longer
term patterns and outcome.
<TABLE: MSAR wkly results for FY-2005: sent to subscribers on
1/6/06>
At the very top of this
highly complex food chain sets "our" primary timing and trading model we
call "the MSAR," and while the "backbone" of this
"system" is a non-proprietary modification to the Parabolic
SAR (stop and reverse indicator), the "qualifier,"
or final supervisory element, is proprietary to PTR.
We have been using this model to "swing trade" since
January 2002, and we have back tested it to January 1,
1997, with "excellent results." This model only
works "reliably" with highly volatile stocks, or indexes,
and only in trending markets, not large trading ranges.
Therefore, we have assigned this model derive it's
Buy-Long or Sell-Short signals, only, from the Nasdaq Composite
index. The actual trading is done using the Nasdaq 100 "Trust,"
QQQQ's, a proxy for the NDX and CMPX...which is now called the
4Q's. While this signal would have been an "excellent"
confirmation for the IIX or SOX indexes, we do not post it's
signals for that purpose.
Based on signals
derived from the "weekly" Nasdaq Composite index,
not the NDX or it's proxy, the 4Q's, and trading both
long and short on every signal, religiously,
in the QQQQ's, the model is currently,
as of 11/22/2005, up 757% since 1/3/1997...based on
net points gained and excluding commissions. By the way, over
this eight year period the weekly MSAR has made only 33 trades to get that
+757% gain, so even full commissions would not deduct materially from the
results as long as a trader is working with at least $20,000 to $30,000
in capital.
As you well know,
that period has encompassed both a huge Bull Market rally
into a 2000 top, a very ugly drop down into a 2002 low,
and now a huge counter trend rally back up, or a final bull market
leg up, into 2007-2008. Needless to say, this has been "excellent"
volatility, and just what the doctor order for a model like
this.
Now, while the future will "most likely" not be
as volatile as the last few years, and a trading
range down near the 2002 lows is very possible as we
get into the years 2010-2014, we firmly believe there will be enough
volatility in the Nasdaq market to maintain a high quality
signal from this model; eventhough, we seriously doubt
it will be able to repeat that +700% gains over the next seven-eight
years.
Furthermore, while
we will continue to "backtest" it every quarter and alert
subscribers as to any changes "that we find," we cannot guarantee
any results. Currently, as of this 4/29/05 update, the
calculations show that this model was up 77% in
2003, 31% in 2004, and up 9.9% so far in 2005. Needless
to say, that 9.9% in 2005 has been made by going 100% short on 1/4/05
and staying there...a move that I suspect few traders could
standby.
<GRAPHIC Example: MSAR weekly signal results 10/02
to 8/21/06>
BY the way, as touched on above, this model has
given only 17 buy signals and 16 sell-short signals
(33 total signals) since 1/3/1997, and has "acquired"
about 8,107 points in the Nasdaq Compx index, which would
have been "about equal" to 202 points in the QQQ's, which
is "about" the same gain of +757% over about eight years.
This is about a 28% annualized return, CAGR, when based
on a fixed cash investment
and the compounding of retained earnings (gains
in capital). That is to say, take note that this calculation does
assume that the full gains made on every trade is continually redeployed
to the next trade, and minus commissions at a deep discount broker
like Ameritrade or Scottrade...but not a fully service broker.
The single biggest
gain in that eight year period was +103% in 3 months
and the signal biggest loss was -14% in 3 weeks,
so this model is not for the faint at heart and IT MUST
be followed exactly or those high returns could easily
turn into high losses.
The signals from this model are taken
from the weekly chart of the CMPX, but a new signal must be
acted on as soon as possible (our results are based on next day buying
and selling), and in no case later than 3 days if a trader "hopes"
to achieve those kind of results which the model has returned in
the past eight years. To aid in the timing, we will send
an email alert to "remind" any subscriber who is using the "Weekly
MSAR model," and makes us aware that they want them. IN addition,
while we "USUALLY" post any new "weekly" signals to the web site "on the
NEXT DAY" after they occur, we DO NOT guarentee that and only say: we
"try to" post them: "AT least by the following weekend
from the week in which they occurred.
While this model
is clearly "aggressive" in order to achieve high
returns, that is not the only way it can be put to use.
For example, since we are by nature "very conservative
traders," we only use this model to trade 25%-50% of our
capital, and then use it's "excellent" signals to supervise
the larger "swing trades" we make to the main profolio.
By the way,
we also use this model applied
to the monthly charts of the CMPX as one
of our primary long wave trend indicators, but that
signal has a significant delay at major CITs. While
it will typically loose the first 20% and the last 20% of
a major move, it is still an excellent long term swing signal,
or at least has been in the past, for long term mutual
fund investor...and it has "typically" beaten the signals
from the "crossover" of long term moving averages.
While the "Weekly MSAR
model" provides are main buy-sell signal, and our trend confirmation
indicator, we also use it's daily signals when we encounter a "high
probability" CIT "area," eventhough, it's typical results when used
for day trading are not any better than some other models we use...eventhough
it is one of the best!
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DOW THEORY
and
PIVOT POINT THEORY
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"Gentlemen, you have come
sixty days too late. The depression is
over."
Herbert Hoover, President of the United States
of America, responding to a delegation requesting a
public works program (stimulus) to help speed US economic
recovery, June 1930
"The farther backward
you can look, the farther forward you
are likely
to see."
History
of The English Speaking Peoples--(1957) Winston Churchill
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DOW THEORY
AT
the turn of the 20th century,
at the year 1900, Charles Dow, one of the founders
of The Wall Street Journal, its first editor,
and the originator of the index that still carries
his name, proposed that there are three types of stock
market movements: the primary trend, which can last over
a year; a secondary or intermediate trend, which can
move against the primary trend for one or several months;
and minor or daily price movements that only last for hours
or days.
Dow Theory
seeks to determine when there is a change in the primary
trend by comparing movements in the Dow Jones Industrial
and Transportation averages. A third index, the Dow Jones
Utility index was later added by some modern Dow Theorist
after they were removed from Industrial Average. In fact,
one of the reasons these three indices appear on top of each
other in the Wall Street Journal everyday is so that investors
can apply Dow Theory.
According to
Dow Theory, the initial warning sign that a turning
point in the primary trend is near is "divergence's"
that develop between the Dow averages. This happens,
for instance, when the Industrials reach new highs
in the primary trend while the Transports and/or Utilities
fail to do so. An example of this occurred in 1990, prior
to the last Dow Theory bear market signal. When the Dow Jones
Industrials Average reached an all-time high, of 3000 in
July of 1990, while the Transports and Utilities did not
make record highs. The Transportation index had peaked back in
1989 and the Utilities topped in 1988. Therefore, the 1990 peak
in the DJIA was not confirmed by all-time highs in the Transports
and Utilities. Soon thereafter, a Dow Theory sell-signal was
generated and stock prices fell 20 percent by October of that year.
Under Dow
Theory, major stock market buy and sell "signals" occur
following divergence's like those that occurred
in July of 1990. Later on, all the averages
confirmed a reversal in stock prices by reaching new highs
or lows in the secondary trend, respectively. The value
of this investment strategy is impressive and statistically
significant. For example, Between 1897 and 1981, an
investor who bought and sold stocks according to Dow
Theory's buy and sell signals would have reaped a return more
than nineteen times that achieved from buy and hold investor.
<Dow Theory: "value" based on historic PE
ratios>
At PTR, while
we fully understand and apply the main tenants
of Charles Dow’s and Robert Rhea’s stock market theories
in our work, we do not have a section
of the review specifically dedicated to this subject,
and we are not even sure if one would be useful. While
we have little to no doubt that there are enough followers
of the theory to make it useful in market trading and
investing, we also believe that there are one or two services
much more qualified then we are to identify and comment on
them. Those two services are identified in the “Links” section
of the review, which can be accessed from the PTR “home menu,"
at
www.pricetime.net
Never the less, since
we do need to keep abreast of the "main" DOW THEORY signals
in our work, we have a subsection in our MarketView Weekly
commentary that keeps tabs on these signals, and while
we always "try" to consider them in our current analysis, we also
will alert our subscribers to any major changes by making comments
in the weekly analysis. At PTR, we "usually" only
apply DOW THEORY to the "primary trend," so these signals
do not change very often.
The next link shows a typical example
of our Dow Theory post.
<KEY
Dow Theory post 2006-7-8: 7/10/06 post>
PIVOT POINT THEORY
This theory is "purported"
to be used by many large spectators as the foundation
for their computer program trading models, and
while we have no direct knowledge that this is or is
not true, we have tested this theory ourselves and
found that, in general, future "events" based on it
are at least 16% more likely to occur then random. That
is to say, and if we assume that random is a 1:2 or 50% odds,
then it can be said that this theory has odds (on average)
of about 2:3 for an event, about 66% verses 50% at random, and that
is 16% more likely then random.
The Theory
is explained in our subscribers introduction,
and we "many times" show the current "year" and future
"year" Pivot Point (PP); as well as the S2, R2, S1, R1
points when we do our overall analysis for the S/R charts.
The graphic at the bottom of this next page shows a typical
example of the Pivot Points applied to the "log scale" chart
for Rambus.
<PTR's MarketView: Weekly post example--Typical
S/R chart of Rambus (RMBS) 12/04>
CANDLESTICKS and CANDLE
BASED WAVE PATTERNS
(5 in 3 and/or
9-5 patterns plus the usual Japanese candle patterns)
While we do not have
a separate section for this type of analysis, since it is well
covered by many other web sites, we make
"extensive use" of
candle patterns in our Elliott Wave, Cycles, and MarketView
analysis.
All I will say here
is: if you are any type of near term or intermediate
term swing trader and you do not know what a 5 in 3
or a 9 in 5 candle pattern are then you are deep behind
the learning curve.
"Evidence,
even circumstantial evidence, is a massive
leap forward from pure conjecture; eventhough, that
does not necessarily
mean it points
to the one and only truth."
For the
PRICE-TIME REVIEW
B.Bonfoey
(Editor)
"Without a doubt, the two candle patterns
that are the most common and most useful in stock trading
are the 5 in 3 and 9 in 5 patterns. This means five waves inside
three candles and nine waves inside five candles. While
these patterns can, and do, appear on all three time frames, daily,
weekly, or monthly candles, for trading purposes the monthly period
points to the major swing points...as would be expected."
Into The
Looking Glass:
"Pattern Analysis--The Art
of Looking Beyond Tomorrow" (2005)
a new
E-Book
for analyzing and forecasting
U.S. and World Stock Markets.
by
B. Bonfoey
|
Goto
the PriceTime-Review Home page
Subscribe now: $19/m--cancel anytime
Sentiment Analysis,
common indicators, and miscellaneous
future sections
The next four sections were originally planned for
the web site, but we had to put them on hold because this project
just plain turn into more work then we expected. Originally,
there was three of us old retired guys to do this, but
one of my associates, and very good friend, pasted away
recently, so their is only two of us and my other dear
friend has not been in good health lately either.
As a matter of fact, I'm not sure
we will be able to maintain the site, unless we get enough
subscribers to hire someone to help with the
basic web site functions. Which, is a lot more work
then I had envisioned. And, since we have no
idea how many will be interested in our service, we may
just have to abandon it at some point. We hope not, but we have
to face reality here too.
FUTURE: Common technical Indicators.
We follow all the popular technical
indicators and we will comment "weekly" on
the "very few" we have confidence in. We have accumulated
data on many market statistics that have identified
very reliable "overbought" or "oversold” levels to
help us identify the "depth" of the current trend. If
you are an accomplished trader, this "timely" information
alone is worth more then the cost of this whole service.
Some aspects of market trading, or investing, comes down to
just plain hard work, and we have been doing that work for
ourselves for many years, and now we can do it for you to.
FUTURE Misc. stuff:
Inversion
methods
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All material contained herein is orginal content,
except as noted, and Copyright(2003-6) PriceTime LLC, or
it's editor:
B. Bonfoey
-all rights reserved-
certified and recorded for record on January
22, 2006
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The
vast majority of information that we discuss and the
opinions we state in regard to that information can be considered
a form of "forward-looking statements," very similar to those
identified in Section 27A of the Securities Act of 1933, as amended,
and Section 21E the Securities Exchange Act of 1934, as amended.
Such forward-looking statements are made pursuant to the
safe harbor provisions of the Private Securities Litigation Reform
Act of 1995.
"Forward-looking statements"
describe future expectations, plans, results, or strategies
and are generally preceded by words such as "may," "future,"
"plan" or "planned," "will" or "should," "expected," "anticipates,"
"draft," "eventually" or "projected."
You are cautioned that such
statements are subject to a multitude of risks and uncertainties
that could cause future circumstances, events, or results to
differ materially from those projected in the forward-looking
statements, including the risks that actual results may differ materially
from those projected in the forward-looking statements as a result
of various factors.
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