Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: Michael Watkins who wrote (5625)	2/11/2001 4:06:14 PM
From: macavity	Read Replies (2) \| Respond to of 8925

I would not get too worked up about it. Technicians view a market as having 2 modes. 1) Trending 2) Oscillating. Basically these two definitions are meaningless unless you define the timescale that you are observing the movement over. This is where any confusion arises. Since january the market has effectively 1) sold off 2) rallied up 3) sold off 4) rallied up 5) sold off or 1) Not moved. Both are correct. If you were using oscillators on hourly and daily charts you would have picked up the first scenario. If you were using weekly/monthly charts then not a lot has changed. Once you determine your timeperiod then oscillators will make a bit more sense. They are based aroud the fact that prices return to a mean (finally), and markets do not remain at extreme levels for significant periods of time.(Whatever that means) At the moment NDX/COMPX is in Hourly Charts - bearish and o/sold; Daily Charts - bearish and o/sold; Weekly Charts - bearish but not o/sold; Monthly Charts - bearish and o/sold. O/sold (to me) just means that the risk/return of selling at this time/level looks poor unless there is a significant breakdown in price - i.e. Price falls below support on increasing volume/breadth. Does that mean go long? No, it just depends on your risk appetite and other things If you use daily charts to trade look at weekly charts to check where you are in the 'weekly' cycle. This will have a greater influence on daily price movements than the 'daily' cycles themselves.(Waves within waves and all that). Set up your fave stocks and look at them under different timescales. You will get a hang on it as you go along. I have only begun looking at stochastics in the past few months. My view is that they warn you against making an arse of yourself - buying at the top of a cycle and/or selling at the bottom. At the end of January I could not buy tech as the daily oscillators were all overbought. To make matters worse the weekly oscillators were bearish (but not o/sold). This actually meant that I could sell tech (under my rules). Now that the daily is o/sold I can no longer sell tech, as I fear an upswing in the daily cycle. I bought my tech shorts back on Thursday/Friday and went long. This is a short-term position for me and I am already sucking wind. The cycle movements are all bearish. I am hoping/praying/anticapting that the hourly and then daily cycles will turn up. I have slapped my wrist already as I did not get a 'buy'signal and was a little bit too trigger happy. (I am not really an intra-day trader) As I say, ignore the jargon, just get a few oscillators up and see how the stocks/indices you know and understand behaved in the past. Look how the oscillators behaved when the stocks were trending and moving in a range. I hope this helps. I am learning more about them each day. If you want to see a master in action try this link. stomaster.com The guy uses nothing but stochastics to predict bond prices. He has called all of the major turning points in the past 18 months. The trick is he watches the movements over many timescales from the minute to the monthly charts. It does not always make sense to me but you can get something from it - I believe. Good luck -macavity