tag:blogger.com,1999:blog-816559531110064247.post4477810089172113292..comments2024-03-08T01:03:44.522-08:00Comments on Humble Student of the Markets: What China and Google tell us about the marketCam Hui, CFAhttp://www.blogger.com/profile/09672203690656029787noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-816559531110064247.post-80315651018232068332015-08-12T05:15:56.899-07:002015-08-12T05:15:56.899-07:00I should probably explain my previous comments a l...I should probably explain my previous comments a little more. Using SPXU as an example, the +2 sigma Bollinger band is at 34.38 and the -2 sigma band is at 31.52 yielding a 4 sigma range of 2.86 points. The average true range is running about 0.964 points/day. So, dividing 2.86 by 0.964 gives an average time for a bottom to top or top to bottom move equal to ~2.97 days. For someone who is a day trader, that's probably plenty of time in which to execute a trade. But, for someone like myself, an empiricist who wants to see strong evidence of the move's direction BEFORE making the trade, the current situation leaves little room in which to make a profit. Buying in when the move from bottom to top is already ~70% complete (assuming a continuation of the status quo) is simply not an option. Quite a frustrating market at present.<br />-RAS RASnoreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-41314636235612864762015-08-12T01:06:31.447-07:002015-08-12T01:06:31.447-07:00That was a lot about Google, which was already in ...That was a lot about Google, which was already in the market. Seems like some were expecting a spinoff of some divisions hence the run up; but China ? The negative reaction there, seems more overwhelming? Is that indicative of a two headed marketmonster, one trying to go higher while the other one being weighted down. Google now trading at 666 coincidentally. muhahahaha.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-59355742593896088912015-08-11T19:58:15.541-07:002015-08-11T19:58:15.541-07:00One further thought. One of the factors making thi...One further thought. One of the factors making this market so difficult to trade is the narrow range in which it has been oscillating. One can see that in this chart of SPXU:<br />http://stockcharts.com/h-sc/ui?s=SPXU&p=D&yr=1&mn=0&dy=0&id=p36663324414<br /><br />Note how narrow the Bollinger bands have become over time. It takes almost no time for the price to swing between the bands, making it difficult to time both entry and exit. Nimbleness is a necessity if one is going to make any money in such a market, and for those of us who are not full time traders, it is often difficult to be in front of the computer screen at the correct moment. <br />-RAS RASnoreply@blogger.comtag:blogger.com,1999:blog-816559531110064247.post-55782532788664787652015-08-11T19:28:27.849-07:002015-08-11T19:28:27.849-07:00I'm in complete agreement with your conclusion...I'm in complete agreement with your conclusion. This is a very choppy market and it is unwise to make commitments except when clear buying opportunities are presented. At this juncture, it might be tempting to go short, but one would be doing so at a time when the risk/return balance wasn't clearly in one's favor. Better to wait until the odds are stacked much more favorably, and from tonight's perspective it appears the next buying opportunity when that will happen is when SPXU becomes overbought and SPXL oversold. <br /><br />I've never seen a more difficult market in which to make money. Whipsaws abound.<br />-RASRASnoreply@blogger.com