Dump it Here

[ducati916]

With regard to your question earlier in the week re. 'indicator':



I'm guessing that the (a) the lack of new buys last week and (b) slow down in profits is suggesting to you that the market is topping out and (a) is rather confirming that observation of (b).

The thing is that Aus. doesn't exactly correlate to the US (but it is in the ball-park) so there are differences.



Are the differences worth worrying about? Probably. Given that the US broader indices are have slowed and consolidated as they reach all-time high territory, consideration of Aus. based stocks probably warrants a look at something Aus. based that can account for the variations away from US centric issues.

*Given the reliance of the Aus. economy on natural resources, I think I may have the answer for you! I'll look at it a little and then post it up.

jog on
duc

 

[Skate]

I'm guessing that the (a) the lack of new buys last week and (b) slow down in profits is suggesting to you that the market is topping out and (a) is rather confirming that observation of (b).

ducati916 said
"The market has been on a sprint. Markets are marathons. When they sprint, they also pause for breath. The pauses do not indicate a reversal is imminent. Simply a pause is a pause"

Given that the US broader indices are have slowed and consolidated as they reach all-time high territory

The pause is simply a lack of momentum as you mentioned above. I don't believe the Aussie market is "topping out" but plateauing because of indecisiveness adding to the lack of volume & volatility, the drivers of the "Action Strategy".

Dancing to the music being played
My research confirms the profitability trading certain market conditions require one set of parameters where another condition requires a different set. The market sentiment swayed enough in the last two weeks to switch settings resulting in a group sell-off, selling a few good positions.

Change in market sentiment
Plateauing market + changing strategy modes + having fewer positions = "slow down of profits". With the recent sentiment change, it will take a few weeks to have the "Action Strategy" back to full strength, "fighting the good fight".

Don't miss reading @bigdog's post today
Market sentiment is on the rise: https://www.aussiestockforums.com/posts/1081656/

Creating an Indicator from negative correlation

The thing is that Aus. doesn't exactly correlate to the US (but it is in the ball-park) so there are differences.

Your VIXfear filter is where my efforts are being directed at the moment as it's still to be the best choice by a country mile. Going forward I'll be researching how to apply the filter more effectively.

Skate.

 

[Beaches]

While our market will generally follow the US, there will be a divergence at times. In the last week in particular, our market has ended the day down despite the US market being up.

There a few things fundamentally different between the US and Australian market at the current time which are likely to be contributing to the recent weakness. These are not all the reasons, just some contributors and are in addition to the ever present fear of another correction.

1. End of Financial Year.
2. Access to Superannuation

End of Financial Year
First the issue of the end of the financial year. In Australia, the date for the end of the financial year and tax reporting is June 30. The US is different and generally uses 31 December for the end of financial year. So the US does not experience the June 30 movements that can occur here. In the US, June 30 is just another day.

This year we had a huge market drop and a massive loss suffered by many. Although we have had a big recovery, many are still sitting on big losses and there has likely been some selling in the final 2 weeks of June to realise those losses in the 2020 financial year. I wont speculate on how much, suffice to say its highly likely to have occurred.

The drop was then followed by the big rise in the market from March 23 to around mid June. It has been extensively reported of the massive spike in people opening trading accounts and pouring money into the market. Many of these would be sitting on profits and any that wanted to take profits due to the ongoing fear of another drop in the market. This selling would have commenced from July 1 to bring the capital gains into the new tax year. Once again I won’t speculate on the extent of it.

So this year we had both big losses and big gains. Usually it would be more of one than the other. So you would see the majority of tax selling occur either pre June 30 or post July 1. However, this year the selling is likely to have extended from June and through into July.

Access to Superannuation
Second the early access to Superannuation. The second round of the early access to superannuation opened on July 1. As of 29 June, there had been $19.4 billion withdrawn form the first round of super release. There was $7.6 billion of withdrawals in the first 7 days of the second round opening and it is estimated that around $25 billion will be withdrawn under the second round.

That is $25 billion that has come straight out of the market. Even if all the money didn’t come from direct selling by the super funds and they paid from cash reserves, it’s still money that would normally have gone into the market and resulted in less money on the buy side.

Despite all the pressure on the sell side from pre and post June 30 selling and super withdrawals, the market has had a pull back but has not dropped significantly. We could also anticipate the selling from the financial year end and early super withdrawal would dissipate towards the end of July and into August, which would reduce the pressure on the sell side.

Also during the end of July and into August we have the annual reporting season. While we have stocks that are clearly overvalued based on likely immediate forward earnings, there are many that have had increased revenue and profits over the last 6 months and are unlikely to be affected for the short to medium term unless circumstances change dramatically. Numerous companies have recently released a revised guidance showing their profits have been unaffected or have increased over the last 6 months.

A lot of the money sitting on the sidelines is waiting to see what the reporting season brings. Once that money starts to see increased revenue and earnings, the sideline money is likely to start returning to the market through August. Combined with the drop off of current selling, we have a probability of the market rising towards the end of July and through August.

The following is from a recent interview with Marcus Padley who runs a $60 million fund that is concentrated on just Australian equities:

You obviously made some cracking calls during the COVID crash; going to 70% cash on February 20, and then "all in" on March 24, and more recently, all out again on June 12. Can you walk us through the thinking behind those big calls?
We are in 100% cash at the moment and we did it because the US market dropped 6.9% in a night. That's not normal, that is the sort of move that marks a "Big Top" and starts a correction. Corrections start fast. At the same time 25% of the ASX 200 generated technical sell signals on their charts.
We had also made a 36% profit in less than three months. On that first day of the sell-off we were bleeding performance in the recovery stocks that had served us so well. It was time to lock in, which we did.
As far as getting 100% invested again, we'll take it day by day, stock by stock. We'll just keep waking up and making decisions. A sharp rise on the back of a vaccine (a real one this time) is about the only thing I can think of that would make us move very quickly at the moment. Otherwise, it is likely to be a gradual thing because it takes three times as long to build confidence as it does to destroy it. So you always have plenty of time to do your buying. It is the selling you've got to be quick with.​

If the Padley fund identified a likely weakness in the local market in the middle of June from technical indicators, it’s a fair bet that other fund managers also recognised it. While many funds are not able to go to full cash, they may well have gone heavily underweight in equities.

As the reporting season starts to lift some of the fog and uncertainty, funds could well start to flow back into the market. While there will still be some element of a rising tide lifting all boats, the next rise may be a little more selective than the one from March to June.

None of the above is certain, it is simply possible (or probable, take your pick). Trading as with business, is not about certainty, by the time it becomes certain, the boat has sailed. To be profitable in trading or business you have to consider the risk/reward profile and play the higher percentage probabilities.

 

[Skate]

Skate.

 

[Newt]

With regard to your question earlier in the week re. 'indicator':

View attachment 105822

I'm guessing that the (a) the lack of new buys last week and (b) slow down in profits is suggesting to you that the market is topping out and (a) is rather confirming that observation of (b).

The thing is that Aus. doesn't exactly correlate to the US (but it is in the ball-park) so there are differences.

View attachment 105823

Are the differences worth worrying about? Probably. Given that the US broader indices are have slowed and consolidated as they reach all-time high territory, consideration of Aus. based stocks probably warrants a look at something Aus. based that can account for the variations away from US centric issues.

*Given the reliance of the Aus. economy on natural resources, I think I may have the answer for you! I'll look at it a little and then post it up.

jog on
duc

Hi duc

Could you briefly explain what we're looking at in the graph please? Is EWA some sort of weighted price for SPY?

 

[Skate]

Hey skate - here's a couple of posts I made in some other threads. There is a reason why what I have dubbed "stay at home tech" has outperformed all the major indices massively. There is a reason why basically all markets except stay-at-home-tech have tanked every single time bad virus headlines/data has hit the news and stay-at-home-tech has often actually increased on those days and that reason is that it is the VIRUS which is dictating human & business behaviour and therefore markets. Let me know if you're interested

I read an article a few days ago that explains @over9k recent lengthy re-post in this thread. The explanation for his series of posts have been condensed for those following along.

Why is the Nasdaq outperforming the S&P 500 and Dow Jones index?
In June, the Nasdaq Composite Index [IXIC] made waves when it peaked over 10,000 for the first time. Just two weeks later, the Nasdaq hit another major milestone reaching an intraday high of 10,221.85 and closing at 10,131.37 (up 11.42% in the year-to-date) on 23 June. The rally represented the most considerable advantage in the Nasdaq’s performance over the S&P 500 [SNP] and the Dow Jones index [DJI] since 1983, which were respectively down 3.1% and 8.3% YTD. What factors have contributed to the Nasdaq’s show of strength and continue to push it far ahead of the S&P 500 and Dow Jones index?

Stay at home vs blue-chip
A significant factor in the Nasdaq index’s surge is that investors are now rallying behind the big tech and stay-at-home stocks benefitting from the pandemic, particularly in e-commerce, cloud computing and communications sectors. A few of these stocks are having a positive impact on the S&P 500 as well as the Nasdaq, which explains its slightly better performance compared to the Dow Jones. Up to 29 June, Apple [AAPL], Amazon [AMZN], Alphabet [GOOG], Facebook [FB] and Microsoft [MS] had seen their share prices increase by an average of 21.18% in the year-to-date. These stocks account for 40% of the Nasdaq index’s value, and 20% of the S&P 500. The Dow Jones, however, only features Apple and Microsoft among these stocks. While we have all become even more dependent on the products and services provided by the FAANGM’s during the Great Virus Crisis. While we have all become even more dependent on the products and services provided by the FAANGM’s during the Great Virus Crisis, they might have become more immune to government regulation.

COVID-19 has introduced uncertainty and volatility to all markets and industries — keeping indices like the Dow Jones grounded.
For starters, economic instability and fears over a second wave of cases have caused many blue-chip companies, including Walmart [WMT], McDonald’s [MCD] and Caterpillar [CAT] (all listed in the Dow Jones) to pull their 2020 guidance making stocks challenging to value. Although economic data have improved in recent weeks, many investors expect the recovery to remain uneven and they are bracing for more turbulence as the presidential election season ramps up. Although economic data have improved in recent weeks, many investors expect the recovery to remain uneven and they are bracing for more turbulence as the presidential election season ramps up

Meanwhile, current sentiment suggests the Nasdaq will continue to prosper as long as COVID-19 remains a threat.
The second half of 2020 is expected to keep facing the brunt of the coronavirus pandemic as the second wave of the outbreak is gathering steam. With the new trends making way, these major technology stocks are expected to continue to gain on rising demand for their products and services. In the current scenario, the rising work-from-home and online shopping trend, increasing digital payments, growing video streaming and soaring video game sales are slowly becoming the ‘new normal’. With the new trends making way, these major technology stocks are expected to continue to gain on rising demand for their products and services.

The analysts’ outlook
Uncertainty and confusion are clouding analysts’ predictions & this year is proving to be one of the most difficult ever to forecast. “You can’t depend on any one index, consider all three of them and know what’s in them.”

Skate.

 

[ducati916]

Hi duc

Could you briefly explain what we're looking at in the graph please? Is EWA some sort of weighted price for SPY?

EWA is simply the US ETF for the ASX.

jog on
duc

 

[Newt]

Ahhhh.....

 

[over9k]

main uneven and they are bracing for more turbulence as the presidential election season ramps up

Meanwhile, current sentiment suggests the Nasdaq will continue to prosper as long as COVID-19 remains a threat.
The second half of 2020 is expected to keep facing the brunt of the coronavirus pandemic as the second wave of the outbreak is gathering steam. With the new trends making way, these major technology stocks are expected to continue to gain on rising demand for their products and services. In the current scenario, the rising work-from-home and online shopping trend, increasing digital payments, growing video streaming and soaring video game sales are slowly becoming the ‘new normal’. With the new trends making way, these major technology stocks are expected to continue to gain on rising demand for their products and services.

Yep the tech heavy nasdaq has gained the most because tech has made, well, all the gains. Take tech out of any of the indices and they're ALL in negative territory over the last month iirc.

We're also now heading into winter in the northern hemisphere - already a time when more time is spent indoors, and then combined with the simple reality of cold making people more susceptible to infection (making people even more afraid to go out) and the xmas silly season and I can't see how e-tailers aren't going to make an absolute killing.

In fact, on days where positive economic data has come out (e.g jobs or consumer spending or sentiment), I've actually had mild drops/minimal gains in stocks like zoom but bounces in amazon & ebay in particular because whatever increase in demand that has come from more consumer cash splash has ALL been spent ordering stuff online. I've had several days that actually would have been red if not for the bounce I had in ebay.

People simply aren't returning to bricks & mortar/face to face anything unless they have no other choice. Shopping centres are still wastelands. I should hope that the reason would be obvious.

It's genuinely no more complex than that.

 

[IFocus]

Good post 9K

 

[qldfrog]

Yep the tech heavy nasdaq has gained the most because tech has made, well, all the gains. Take tech out of any of the indices and they're ALL in negative territory over the last month iirc.

We're also now heading into winter in the northern hemisphere - already a time when more time is spent indoors, and then combined with the simple reality of cold making people more susceptible to infection (making people even more afraid to go out) and the xmas silly season and I can't see how e-tailers aren't going to make an absolute killing.

In fact, on days where positive economic data has come out (e.g jobs or consumer spending or sentiment), I've actually had mild drops/minimal gains in stocks like zoom but bounces in amazon & ebay in particular because whatever increase in demand that has come from more consumer cash splash has ALL been spent ordering stuff online. I've had several days that actually would have been red if not for the bounce I had in ebay.

People simply aren't returning to bricks & mortar/face to face anything unless they have no other choice. Shopping centres are still wastelands. I should hope that the reason would be obvious.

It's genuinely no more complex than that.

Where are you located @above9k?
Believe me, my last visit in a shopping centre.brisbane suburbs was not wasteland , too busy to my taste, 3 weeks ago in Townsville, the Strand was busy as hell weeknight with pub overflowing
Qld is suffering as expected but not because of people attitudes.

 

[over9k]

Sorry frog I should have mentioned I was talking about the U.S specifically.

QLD was absolute bedlam yesterday & friday.

 

[Saqeeb]

Week 21 update on my MAP paper trading portfolio.
The system bought IRI last week and the portfolio saw a gain of $88.00.
Noticed I had made a mistake where there was a sell signal for PPG a couple of weeks ago and I missed it. This position will be sold next Monday's open. This is a trading mistake that has cost the portfolio a further loss as this security sold off last week.

Next week's buys:
Five buy signals. FLN, EMR, BGL, DTC and WSP.

Next week's sells:
No sells

 

[Trav.]

@Saqeeb some interesting stock selections there mate

Five buy signals. FLN, EMR, BGL, DTC and WSP.

Price movements for last week

FLN +44%
EMR +9.8%
BGL +11.4%
DTC +6.45
WSP +38.8%

 

[qldfrog]

Week 21 update on my MAP paper trading portfolio.
The system bought IRI last week and the portfolio saw a gain of $88.00.
Noticed I had made a mistake where there was a sell signal for PPG a couple of weeks ago and I missed it. This position will be sold next Monday's open. This is a trading mistake that has cost the portfolio a further loss as this security sold off last week.

Next week's buys:
Five buy signals. FLN, EMR, BGL, DTC and WSP.

Next week's sells:
No sells

View attachment 105887

View attachment 105888

@Saqeeb just something to be careful:
copy the result of your explore weekly in a spreadsheet or file
If your system repaints usually due to future looking, you will discover in the following weeks that buy or sell go missing or are added
My systems were nót exempt
That could be the cause behind PPG

 

[Linus van Pelt]

@Saqeeb some interesting stock selections there mate



Price movements for last week

FLN +44%
EMR +9.8%
BGL +11.4%
DTC +6.45
WSP +38.8%

What makes them "interesting"? I sense there's a hidden message there but I'm too noob to get it.

(I'm holding a couple of these)

 

[Trav.]

@Linus van Pelt for me to enter today after FLN gapped up on Friday is ' interesting '

When you look at the Weekly chart you just see the 1 bar up 44%

Then look at the daily chart and on Friday alone it gapped up 17% on the open to close 31% for the day, I will be interested to see if it retraces today as the daily RSI level is at significant levels.

Similar story with WSP

 

[Trav.]

@Saqeeb just something to be careful:
copy the result of your explore weekly in a spreadsheet or file
If your system repaints usually due to future looking, you will discover in the following weeks that buy or sell go missing or are added
My systems were nót exempt
That could be the cause behind PPG

or you could just run the bar replay over the last couple of weeks and you can see if signals are repainted on the chart.

 

[Bazzi]

Did we miss the FLN bus?

 

[Linus van Pelt]

@Saqeeb just something to be careful:
copy the result of your explore weekly in a spreadsheet or file
If your system repaints usually due to future looking, you will discover in the following weeks that buy or sell go missing or are added
My systems were nót exempt
That could be the cause behind PPG

@Joe90 in https://www.aussiestockforums.com/threads/dump-it-here.34425/page-168#post-1079495
put me onto http://blueowlpress.com/books/introduction-to-amibroker/ which I've found to be excellent.

P. 8-4 states:

Code Check & Profile ‑ Saves the file, makes it the selected file for Analysis, and runs the Code Check and Profile process. Code Check tests for “future leaks” where the code peaks into the future. Profile lists the operations required to run the code and estimates the execution time.

I've not tested this, but it's a good assumption that Mr. Bandy is correct.

Hope this helps...