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I am not sure if I understand all your analysis. (very long)
First of all, if SOX is semiconductor concentrated. SOX should correlate with a lot of high tech indexes. How strong is the correlation of SOX with AAPL in the past? AAPL is still considered as computer company, right?
Secondly, I have been in the quantitative data analysis for years now. I am not so sure how you can quantify the waves. Could you explore it more without revealing any secrect that you don't want to share. In spectral analysis, MESA seems to be a good candidate for financial data. Fourier transform is not so powerful here. I tried some exotic ways, such as fractal analysis, to recover any possible waves. I had to admit that I was not so successful. Since I have a small stack of money, I am looking for very high probability trades, or very high return/risk ratio. Any trades with lower than 70% probability are not something I can make money on after paying slippage and commissions.
If you have past SOX data that you want to share with me. We can exchange some analysis. I am not an agressive trader, but I tend to sell (as you suggested in your contribution). Especially when I examined today's SPX, NASDAQ. All my mutual fund positions were switched to cash for a while now. My market exposure is only in options.
I fully agree with you in that the sector investing requires a close look in individual sector indexes. It could be a leading index for some lagged stocks in the sector as you said. How can one sector hold if the broad market is melting?
The only possible scenario is that the professionals are rotating their money from blue chips back to hi-tech sectors. The influence of the pension money and mutual fund money can not be underestimated. If the rotation is true, it supports the view that we are close to a major top if we have not seen it yet. Since you are good at waves, especially with some quantified methods. I am very interested to hear your comments.
Let me go a little bit beyond AAPL. I noticed a mutual fund mania is in the forming. I am in Toronto. So I can not have your luxuary to have these stop loss orders whatever on NASDAQ. But I heard promotion of mutual fund and even commodity option trades from the radio during the whole RRSP season. (RRSP is the Canadian equivalence of 401k I believe). Even now, some guys are promoting the gasoline call options. They may be right to be bullish on oil. But I have been trading options for a while, even my view is right, I am not able to capitalize on my view with commissions, slippage, time decay and so on. For me, this IS a bubble. I don't know how many trillion of dollars could evaporate when the bubble breaks. I am a scared one who still remember Oct. 19, 1987.
Like you said, we will know by Friday. I still hold the view that AAPL can not enjoy a real rally in an unfavourable climate although today's breakout is there. Does any one have today's intraday data on AAPL? Did you have any clues on the future direction of AAPL? I tested the market maker today with my money. I am not overly bullish. My guess is that Jaime, you have a tight stop loss in AAPL, which is not bad thing in this business. But it may not be far enough in high volatile high tch sectors. Anyone follows IOMG? It could be another MU. Also, I don't quite understand your SOC, mental stop. How do you practise it? Just enter a market order right before the closing bell? |
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