After recently publishing a blog about Donald Bradley’s Siderograph I had a number of emails asking about the use the of the Siderograph on intraday charts. In this blog I am showing the MarketWarrior indicator named Fractal Siderograph on the 60 minute S&P500 mini contract. Donald Bradley developed his Siderograph in 1948 and did not have access to intraday data so he did not do any testing on its intraday use.
For an intraday chart you need to use either the settings Short Terms or the Middle Terms. The name Short Terms was Donald Bradley’s name for all the planet combinations that included the moon. The Middle Terms are the planet combinations that include the inner planets. We are using a 60 minute chart so I will be using the Middle Terms. The Short Terms would be appropriate on time frames such as the 5 minute chart.
The picture below is a 60 minute S&P500 mini chart with the Fractal Siderograph. The chart covers two weeks. The empty part of the chart on the right side is the week from July 9 to July 13. I have made only minor changes to the default Middle Terms settings. If you are using MarketWarrior you can create this indicator using the seven settings steps below.
(-1-) Apply the indicator.
(-2-) Open the MarketWarrior reformat settings and click the button Reset Default to make sure the settings are the built-in settings. The built-in settings are the settings used by Donald Bradley.
(-3-) Select the round radio button, Middle Terms.
(-4-) Set the Average Size to 50
(-5-) Set the Trine Polarity equal to 3
(-6-) Uncheck the pivot lines
(-7-) Set the indicator to draw in the main chart area by selecting the round radio button Draw in Main Chart.
I will post a chart at the end of this week showing how this chart looks after the close on Friday July 13. Notice the tops and bottoms in the Fractal Siderograph (FS) are not exactly the same as the S&P500 mini, but the general curve of the FS is similar to the S&P mini. This is about as close a match as you will find between the market and any indicator that is 100% market independent. Remember the FS is a planetary index and does not include the price in its calculation in any way.
The clear winner in our data poll was the FOREX data. We were looking for the most popular data to add into the data downloader. We will try to get FOREX data included into the Data Downloader’s list of symbols that can be downloaded and updated from Yahoo and or Google in one of the upcoming builds. My personal guess was that the dividend data files would be the most requested by that was not the case. Items like the next earnings date or the next dividend date could also be downloaded but they do not seen to be very popular with short term traders.
Below are two charts placed together with one overlapping the other. The chart on the top left is the daily SDY which is the S&P500 Dividend ETF. The chart underneath and on the right side is the daily SPY which is the S&P500 Index. On both of these charts, I have added the MarketWarrior Swing Projector indicator. Notice the pivot labels for the most recent bars are different on the two charts. This difference is caused by the pivot (manually labeled #1) which moved higher than the pivot labeled #2 on the SDY chart, but held lower on the SPY chart. The SDY often shows the market cycles more clearly than the SPY and this again seems to be the case.
Below is the daily SDY and I have added the momentum indicator, Stochastic of RSI. Notice the momentum indicator is above the over bought boundary. The momentum and the Swing Projector both indicate we should be looking for a top on the daily chart. Now look at the second chart below. This is the weekly SDY and the same momentum indicator. On the weekly chart, the momentum is very low and the Swing Projector indicates we should be looking for a bottom. So the daily Swing Projector is looking for a top and the weekly Swing Projector is looking for a bottom. When the daily and weekly Swing Projector are looking for opposite type of pivots, any forecast made is not going to have the highest probability of success. The forecasts with the highest probability of success occur when the daily and weekly SP are looking for the same type of Change in Trend, either a top or a bottom. The only forecast I can make for next week would be that the S&P500 looks like it may have a back and forth price action next week as the daily and weekly cycles harmonize and come into alignment with each other.
I haven’t posted anything about MarketWarrior’s Bradley Siderograph indicator for a while because the indicator did not correlate well with the market in 2011. I believe there was only one major S&P500 Change In Trend (CIT) that lined up with the turning points in the Siderograph in 2011. It looks like this indicator may be getting back in sync with the market in 2012. Let me give a little bit of information about the Siderograph . This indicator was developed by Donald Bradley soon after WWII. It combines the cycles of the planets to create a line that is plotted on the major stock indexes. I believe Bradley used the DJIA30. I will use the S&P500. The default settings in the MarketWarrior indicator are the settings used by Donald Bradley and are shown below. The Siderograph indicator is used to forecast the weekly chart CIT points and the general curve of the market. Now let’s take a look at the first chart below.
Below is a weekly chart for the S&P500 Index and I have added the Siderograph to the chart. I have manually drawn a box around the Siderograph covering the year 2012. The first 5 months of the year are complete and the curve of the Siderograph has matched the curve of the S&P500 very well. The Siderograph moved up from January to a top in late April and then down to a small bottom in late July. So far in 2012, the S&P500 moved up from January to a top in late April and has now moved down into the first week of June. This is lining up very well with the Siderograph.
We can see the weekly chart CIT dates in the Siderograph for the rest of the year are July 23, September 17, and February 4, 2013. The CIT dates can be either tops or bottoms.
The curve of the Sidrograph shows the slope of the market should be down from the April 2012 high to the end of the year with one significant counter trend upswing in between. If this Siderograph curve is formed in the S&P500 over the rest of the year, it would be unusual because 2012 is a presidential election year which usually sees the market advance. Next lets look at the daily chart.
Below is the daily S&P500 Index chart and the Siderograph. On the daily chart, the CIT dates and the curve are slightly different from the weekly chart because working with the weekly dates creates a smoothing effect. The chart below shows 5 of the pivot dates identified by the Siderograph accurately line up with market CIT dates. Three of the Siderograph dates did not. Through the rest of the chart, the Siderograph pivot dates are June 22, August 1 and August 21. The Siderograph pivot dates seem to have more value on the daily chart than the curve of the Siderograph. You can see the curve of the Siderograph on the chart below has no clear direction after the June 22 bottom.
Below are the results of our recent poll asking about which data service is preferred by traders. The results were overwhelming in favor of free quotes from the Yahoo or Google web site. These quotes are a middle ground between real-time streaming data and end of day data. We will get support for this type of free data into a future upgrade for the Forecasting Made Easy software.
The software Forecasting Made Easy has added support for ASCII text files. We have a free trial that includes sample text file data. You can download that trial installation program here. The picture below shows the new section of the help file that describes using text files. If you are using FME you can run the auto update to download the newest version of the program.
Recently soybeans made an unusually consistent upward move which lasted for four and a half months. The move ran from mid December 2011 to May 1 2012. This turned out to be a mirror reflection of the previous set of swings in the soybean market but it was not easy to spot because it was a non symmetrical mirror image.
The symmetrical mirror images are usually easy to spot and trade because the mirror image swings are approximately the same size. The first chart below shows the daily soybean chart. I have drawn a vertical line indicating the center of the mirror images. To the left I have added -1, -2, -3 and -4 marking the left side of the mirror image. To the right of the vertical line I have added +1, +2, +3 and +4. This shows the right side of the mirror image. This chart shows the right side of the mirror images is not symmetrical to the left side and therefore was difficult to spot until after it formed.
Now that we can see this mirror image we can use it to forecast the next set of mirror image swings into the future. On the chart below, I have added -5, -6, -7 and -8. These swings on the left represent the next set of swings that will occur on the right side of the chart. I have added +5, +6, +7 and +8 to the right side of the chart. I have also added blue lines that represent the swing sizes on both time and price. If this mirror images continues to repeat we can expect the soybean market to make a series of swings between 1300 to 1420 through the end of August.
Here is an update to the May 14 posting discussing the S&P500 Index and the MarketWarrior Swing Projector. In the May 14 posting I showed that the Swing Projector was indicating that the S&P500 should continue its downward move. The first chart below shows the ETF SDY which is the S&P500 dividend Index through May 21. You can see the S&P500 continued to fall as the Swing Projector indicated.
The Swing Projector should be used with other indicators to help determine the market trend and turning points. On the chart below, I have added the 200 day moving average and I have also added the Smoothed Stochastic momentum indicator. The Swing Projector is showing the Red Triangle with the letter B and the circle with a b. The red icons are the Swing Projector Warning Icons that indicate all the time and price conditions for a bottom have been met. This does not mean a bottom will occur when they appear just that the conditions have been met for a turning point to occur. The other indicators are used to help time the exact turning point. You can see the stock fell to the 200 day moving average. The momentum indicator is at an extreme oversold position almost at zero and on May 21 a reversal price bar has occurred turning upward. These three items together with the Swing Projector are showing this market is making a bottom.
The second chart below shows the same SDY market through June 1st. You can see the market did make a swing upward for a week as expected but has now turned down again. The Swing Projector is currently not giving a clear indication what the next market move should be. After a few new price bars next week, the Swing Projector will establish a new clear indication of the market direction.
In the Forecasting Made Easy software, we added support for Metastock format data in April and released support for ASCII text files today May 30. We will be releasing a new Yahoo Finance data downloader next week. In late June we will have support for eSiganl 10.6 available. The third-party access to eSignal 11 will be released by eSignal in the fourth quarter and we will have support for it at that time. To help us direct the development of FME we would like you to use the poll below to tell us what real-time data service you use or are interested in.
The main issue with real-time data today is that the turn over rate for real-time traders has never been higher. I have an opportunity to talk to real-time data feed support personal and brokers from time to time. The current burn out rate for a new real-time trading account is about 3 months. This means that after 3 months the new trader has lost enough money that he/she must either send more money to his account or stop trading. A similar story of high turn over is told by personnel at most real-time data services. Brokers I talk to often say that high frequency trading has made day-trading with a desktop PC much harder. The short-term charts do not have the trading opportunities that were available even two years ago.
This all makes finding the best real-time data service to support a little harder. You can help the development of FME by letting us know which real-time data service you prefer. Thank you.