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Well, writing helps to get the thoughts organized. Especially in money making business there are as many bull news as bear ones at any given time. It's important to have a perception of the impact of the breaking news.
AAPL holds well its ground. It's a range trading. My understanding is that someone don't want it to be too off from 25. I believe it will close around 25 next week if there is no major event. The earning is no longer a big issue since it was preannounced.
It's funny that we share a lot of principles since I thought you made your decision based on fundamentals. It's a pleasant surprise. Since we agree on the big picture, buy-and-hold may be the worst strategy at this particular moment. Like you, I cashed my exposure to the gold, a little bit early though. Also, the correlation of Canadian gold funds with XAU is funny. I don't understand. However, I still hold the view that we may close to a major bull market of gold. Especially if there is a broad meltdown of the broad market. Whether a meltdown will happen is out of question, the question is when and how. I don't know. It has been stretched for so long and many bears got slaughtered in the past few years. Equity funds are the place to preserve value. This is becoming a common belief as the %%% returns are widly published. This creats a positive feedback to support the market as the manager can not do else except buyshares if general public hand them money. However, a constant positive feedback will not creat a stable system, only a metastable one. Whta will be the trigger to make it go back to equilibrium? I am unable to answer.
I am off the topic about AAPL here.
With respect to MA, I rely heavily on it. Two drawbacks: 1) MA is a lagged indicator. 2) no current volatility infomation. Also the length of MA is so crucial that it can give whatever result you want if you optimize. I am amazed by your comments on optimization. I strongly believe you are right. This is the reason that the 2000% return system is true except that they can not make money in real life. Your effort to use wave to determine MA length is a very good direction. I have seen some work on that. However, it could be dangerous to trade on these waves. e.g.
you stated that 70% of mayor (?) waves fell between 14-21 time units. This seems not true for AAPL. (Sorry, I don't have hard fact back me here since it's fuzzy to determin mayor waves) The error of time zone is 50-67%. That combines 70% gives no better than 50% chance to benefit from the timing. With a tight stop, I would have got wiped out by a lot of wipsaws. I tell you my experience with AAPL here. There was a false breakout in AAPL about a month ago. I bought WAAAF @ 5.25. I thought it was forming the bottom. As soon as I saw AAPL slipped from 30, I dumped all my AAPL holdings and became a naked call writer (not really, since I have WAAAF, my position was a calender spread at same strike price). We all know now that WAAAF hit 4 finally. What I am trying to say here that it's very difficult to timing a turn. One has to keep trying and calculate an exact probability for a trade is not so simple either. I can do some calculation on the probability once I have the XCI and SOX data. Is there any site that I can FTP?. It seems to me that XCI is more interesting. It could be leading indicator for AAPL as you suggested. I am expecting a correlation coef > 0.95. You can tell me whether I am right.
Oh, my last comments on MA. MACD used to be an excellent tool. Now a lot of people are using it. One gets more and more whipsaws. The time that a school kid can make money our of commodity market with a two MA crossover system is gone forever.
I don't follow XCI and SOX. I should do it sometime. The geative correlation of AAPL with SPX and INDU, I have been noticed it for the past 2-3 years. But it may not be a tradable pattern. No one comes up with an explanation yet. |
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