The blue circle shows the tweezer top that was mentioned last week and it did indeed identify a top but the bears could gather no downside steam. The indicators maintain a negative profile and the bounces are not occurring due to positive divergence but rather a strong belief that you need to get in now or you will miss the bull train. The higher high on Friday occurs with negative divergence now in place, as well as the RSI and stochastics moving into overbot conditions, once again, so price should receive another spank down. There is some momo that came into the markets on Friday afternoon so a stutter step or two may be needed as price rolls over.
The upward-sloping channel is in play so watch to see if price exits either side to identify a winner and a loser. Projection is for a smack down from these levels, 1485-1489, then a move to the lower rail of the channel again at, say, 1481. If the bears come to play, 1481 would lead to 1476, 1472 and 1468. If there is a continued absence of short sellers, then price floats up again to tag 1496, the last remaining upside gap fill. Of course, the most important thing on the 30-minute chart, is to watch the 8 MA and 34 MA cross, perhaps the bears will push the 8 under the 34 this week to take control. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.
Hi Keystone, this is a bit off topic. I noticed that your Quant Bot went live in 2008. I assume that is is after much back testing and perhaps forward testing too. I was wondering if it was possible to you let me know the theoretical results that Keybot would have ended the the Year, for the year 2000 and 2007. Both major topping years.
ReplyDeleteTIA. T69
Trader, there was quite a bit of back testing. As the algo was developed over many years, however, the focus was on the individual components that make up the overall model. So there are no overall results prior to 2008. When the inner components were identified, which affect markets to the greatest extent, those were then grouped together to form the overall model. The back testing for many years is of not a concern since the quant is an oscillator. This is one way to take out the bull versus bear market issue where you wonder that if a model works well in a bear market, will it work well in a bull market, and visa versa. An oscillator takes that off the table, at least with Keybot it does. Since each side of the zero line is a mirror image, so the model responds in the same manner on the underside of zero (bearish) as it does on the top side of zero (bullish). Just like stochastics, or the RSI, study those indicators, see how they have a center line that separates bull versus bear, then, say for stoch's, you have overbot and oversold levels, Keybot operates in a similar manner so it works great in bull or bear markets. Good luck to you.
ReplyDeletethanks for the detailed response KS. I understand. and also it's interesting that Keybot works like an oscillator. Yes I like both stochs and RSI....
ReplyDeletecheers.