Ben - Why it works? Not a simple question, but here goes:
The majority of investments are traded with the aid of trading computers. They recommend when to buy or sell and at what price. The major players no longer rely upon mere emotional humans.
The total influences which impact the investment's price are too many for humans, especially if you want to keep your mutual fund or pension for example one step ahead of everyone else in the market.
But a computer's great strength is also its Achilles heel. When you give a computer the same problem to solve two times in a row (and it doesn't matter how complex the problem), it will give you back the same answer two times in a row. Repeatability equals predictability.
A very simplistic example: Two days ago, a computer analyzed 2+3 and got 5. Yesterday the problem was 2+4 and it got 6. Today it its problem is 2+5 and its getting 7. If the problem for tomorrow will be 2+6, and the current trend certainly supports that, you do NOT have to wait till tomorrow to KNOW the answer will be 8.
In the case of trading computers, their answers are very simplistic as well. Buy, Sell or hold.
The challenge is to figure out what answers the computers have been generating in the past. Once you know that, you can start to predict tomorrow's answers. The "how" is to look at their influence on an investment's price. We use high-low price charts that are stripped of non trading days, log based etc.
When a stock's price gets too low, the trading computers start issuing buy recommendations (some people even let the computers do the trading). If the price gets too low, i.e., too good of a deal, the volume of buys stops the downward motion. This is a clue to the "answer" of the computers. Likewise when it goes too high.
Inpathique Analysis is a process of using these influences to find the "Inpathique" pattern of the computers which has been inadvertently imprinted upon the high-low chart. These patterns follow rules and behave as predictably as the computers that generated them in the first place. Once you know the computers' pattern, you can project it into the future. The computers will continue to confine the stock's price within those patterns for the next period of time. The further into the future you look, the more opportunity there is for new factors (not previously programmed in, such as a major gold find) to enter their equations and influence their answers. For this reason I look at the latest clues they have left behind in the high-low price charts every couple of weeks and fine tune the projections in order to always keep them as accurate as humanly possible.
Sometimes it is not the trading computers that will generate enough buys to stop a price from dropping too far. Barrick knew their price was too low, their investors were putting the heat on them as well. The solution, they did (announced) the buying. By watching my Inpathique pattern for ABX, I predicted the low for Barrick to be Dec. 8. I missed the low by three trading hours, (it was the morning of Dec. 9). On Dec. 24, I missed the high by only 20 minutes. Believe it or not.
If you ever get into this new discovery, you will be frequently amazed at the way stocks will follow the Trans-set and Ghost lines etc. that are precisely predictable and caused by price fluctuations in the past.
It does take a lot of work however. There is no computer program written that will do the work for you (I just use a computer graphics program for drawing the lines quickly and accurately on high-low charts). If there was a program, everyone would use it and I suspect the patterns would disappear.
--------
Influence of POG on ABX. POG is largely controlled by computers and programed in and allowed for. I.e., the trading computers are taking into account the patterns of influence on POG that are generated by yet other computers. The problem they have to solve is more complex. The output remains the same, buy, sell or hold.
---------
NASDAQ traders - First of all, we require the majority of a stock's shares to be traded by computers. Small stocks frequently are not although private investors are often using computers as well. ---- Across the land, everyone sees the same thing at the same time. "It went above its 30-day moving average "buy," "buy" (Don't shoot me, but the influence of the computerized analysis is there albeit watered down). The resulting patterns are used as guides rather than money in the bank rules.
I actually like the NASDAQ boys if I can be on top of the action fast enough. They drop the price to shake some stop loss shares loose for example and the price plummets for a few minutes. Those dips (and their reverses) often approach the limits of the Inpathique pattern at that instant and scream trade, but you really have to be on top of it. No - Inpathique cannot predict that the NASDAQ MM was about to do that, it can only tell you when the price is too good to pass up because others are about to jump on the bandwagon.
The idea is to use your Inpathique analysis to know when the big players are about to buy or sell and at what price, then beat them to the punch.
Greg |
