Tag Archives: trading

Sep 6 2012

Follow up for 60 Minute S&P500 eMini and the Fractal Siderograph

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

I have been very busy recently working on MarketWarrior 5.0 and on the Mikula Forecasting Service so my last post here was on July 10, 2012. I thought it would be a good idea to pick up in the same place I left off. This will be a follow-up post to the July 10, 2012 blog. You can read that July 10, 2012 blog by clicking here. In that post I showed the MarketWarrior planetary index that I had worked out for the 60 minute S&P500 eMini contract, symbol ES.

The MarketWarrior planetary index that I use in this market is the AT_Fractal Siderograph. The name Siderograph was created by Donald Bradley to describe the planetary index that he created for the Dow Jones Industrial Average. I use the names AT_Siderograph and AT_Fractal Siderograph because the default settings for these indicators are the settings developed by Donald Bradley back in 1948. The word fractal in the name AT_Fractal Siderograph is a reference to the fractal math that emerged out of the chaos mathematics craze after the publication of James Gleick’s book Chaos: Making a New Science. This book was published in 1987 but I did not read it until 1990. I did extensive research into the applications of nonlinear mathematics for economic forecasting. The vast majority of the nonlinear mathematics produces poor forecasting results. One of the few nonlinear formulas that produced good forecasting results was a fractal function. I incorporated this into the planetary index and named it the AT_Fractal Siderograph.

The AT_Fractal Siderograph that I pictured in the previous blog on July 10, 2012, is the exact same AT_Fractal Siderograph that I am showing below. The two pictures below show the 60 minute chart for the S&P500 eMini. The top picture covers Aug 9 to Aug 27, 2012. The second picture shows Aug 21 to Sep 5, 2012. The red and blue line is the AT_Fractal Siderograph. I am not exactly sure when I worked out the AT_Fractal Siderograph settings that I use in the S&P500 eMini but I believe this indicator has not changed for at least two years.

In the top picture, you can see the AT_Fractal Siderograph forecasts the general curve of the market very well but does not do a good job picking exact tops and bottoms.

The second picture below shows the same results. The general curve of the market is forecast very well but the exact bar of tops and bottoms is not forecast well at all.

I will revisit this indicator at the end of September and see if the forecasts for the general curve of the S&P500 eMini continue to be this accurate. If you want a forecast for the general curve of the 60 minute S&P500 eMini, this indicator is one of the best. Furthermore, because it is a planetary index and does not rely on the price, it can be calculated far into the future.

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Jul 10 2012

Fractal Siderograph and the 60 minute S&P500 mini

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

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.

FractalSiderograph

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Jul 10 2012

New Forecasting Service uses the Master Time Factor

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

The picture below shows my replica of W.D. Gann’s Master 20 Year Stock Market Forecasting Chart. The original version of this chart was created by W.D. Gann and it was one of the main charts he used to create his famous annual forecasts. On July 9, 2012 we have started our new forecasting service which makes forecasts based on this Gann method. The inaugural version of our forecasting service is offering forecast for the Euro-US Dollar currency pair, interest rates and the US Stock Indices. I have been making forecasts with this method for 15 years but have only sold them to individuals until now. The link below opens the forecasting service home page where you can learn more.

Click Here
http://forecastingmadeeasy.com/wordpress/

You may have noticed the chart below is made with our Forecasting Made Easy software. Our new forecasting service is using the FME software to make all the forecasts. This means you can either purchase the software and make your own forecasts, or you can subscribe to the forecasting service and we will do all the work for you.

2012Jul06_DJI_20Yr_Mly1

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Jun 15 2012

High Percent Returns with Low Priced – High Correlation Stocks

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

In this tutorial I am going to discuss using the Multi-Symbol chart in Forecasting Made Easy to find stocks that are going to have large percent increases in six to twelve months time. Once or twice a year the S&P500 make a cycle bottom and gives a good buying opportunity. In the first chart below I have drawn a red box around the price area of August to September 2011. This was a two month consolidation area where the market showed every indication of forming a bottom. When a bottoming pattern like this occurs, the question is which stocks should you buy to get the best return in the next upward move in the market?

correlation_0.png

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One possible answer to the question above, is to look for low-priced stocks that have a high correlation to the movements of the S&P500 Index. In the picture below I have added the stock Solta Medical Inc. symbol SLTM. This is a stock that had a high correlation with the S&P500 Index for at least a year leading into the August to September 2011 bottom pattern. After this bottom pattern the correlation between the stock and the S&P500 Index continued and the stock followed the index up. On this chart I have drawn a blue line that starts well above the stock’s bottom in September 2011 and below the stock’s top. The start and end prices of this line are 1.55 and 3.10 respectively. These prices represent where a trader would have had many opportunities to buy and sell at these price levels. On this chart the percent gain is identified as a 100% gain. When you use the FME Multi-Symbol chart to look through all the US stocks against the S&P500 Index you will find that there are about 200 stocks that have a high correlation with the S&P500 Index and are also low-priced stocks. These stocks often produce high returns when the markets turns up from a bottom.

Correlation_1.png

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In the next example, I have added the stock Flow International Corp., Symbol FLOW to the S&P500 Index chart. This is a low-priced stock that has had a high correlation to the movements of the S&P500 index. Again I have drawn a line from a price well above the bottom in September 2011  to a top price well below the top. These prices are 2.30 and 4.00 respectively and are in the middle of a price area where a lot of buying and selling occurred. This means a trader could  have easily entered at these prices.  This low to high move represents a 73.9% gain. This stock correlated with the S&P500 Index for a long time before the September 2011 bottom and continued that correlation through the current date. Because this is a low-priced stock, high percent gain are possible.

Correlation_2.png

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The final chart below, shows the stock Incontact Inc., symbol SAAS. This is another stock that has a high correlation with the S&P500 Index. After the September 2011 low, the correlation continued and both the stock and this index rallied. The line I drew on this chart again represents a price area at each end of the line where a lot of trading occurred and a trader could have easily gotten in or out. The line starts and ends on the prices 3.50 and 5.75. The increase in this stock for this price move was a 64.28% increase. As I said above, there are about 200 low-priced stocks that have a high correlation with the S&P500 Index that can produce these types of percent returns if they are purchased when the S&P500 Index is making a cycle bottom.

Correlation_3.png

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Jun 12 2012

Data Downloader Development Survey

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

We have had a number of requests for downloading dividend data with the new Data Downloader. This seems to be the most popular data point that traders want. If you would like to help guide the development of the Data Downloader take the survey below and let us know your priorities. We will try to focus on the features in which people are most interested.

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Jun 12 2012

Data Downloader for Yahoo Finance

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

We have released the first installment of our Data Downloader as a stand alone program. This version does not require the MarketWarrior program to be installed to run. This first release performs the same basic functions as the original version which is to download and update daily data from Yahoo Finance. The major changes and upgrades to this program will come with the next release, which will download and update files from Google Finance.

Since the creation of the original downloader both Yahoo and Google have greatly increased the amount of free data that can be downloaded from their sites. This includes most international stock exchanges, FOREX data, some futures data. Probably most exciting is the ability download stock fundamental data such as dividend and earning data. Most recently intraday, weekly and monthly data time frames have been made available. We hope to install support for downloading and updating data files for all the different data types from both Yahoo and Google.

The second picture below shows the edit page where you can manually edit a data file.

MFC Data Downloader

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Edit File

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end.

Jun 9 2012

S&P500 Index and the Swing Projector

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

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.

Daily_Both

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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.

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Jun 8 2012

The S&P500 Index and the Bradley Siderograph for 2012

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

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.

June8_Wly_SPY
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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.

June8_Dly_SPY
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May 31 2012

Soybean Forecast Based on Mirror Image Cycles

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved.

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.

Soybeans1

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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.

Soybeans2

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May 28 2012

Forex EUR-USD Master Time Factor Forecast UPDATE

Written by:
Patrick Mikula CTA
Mikula Forecasting Company
www.MikulaForecasting.com
support@MikulaForecasting.com
Copyright © 2012 by Patrick Mikula All Rights Reserved

Lets start this update with the last picture shown in the original forecast posting. The first picture below shows the forecast chart from the original Forex EURUSD forecast. This is a daily chart and it shows my Master Time Factor forecast for the EURUSD covering the time period April 3, 2012 to June 30, 2012.  The forecast shows the EURUSD currency pair curving downward. The movement in this forecast time period should form several swings downward toward 1.260.

T4_13

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The next chart is our first update chart which goes up to Friday May 25, 2012. chart. I have drawn a red box around the time period that has unfolded since the forecast was made. The EURUSD is the green and blue candle stick bars. You can see the daily price bars for the EURUSD have followed the forecast lines down. The general curve of the market has followed the general curve of the Master Time factor forecast lines. This is one of the most accurate forecasts for the EURUSD that was posted for the pubic that you will find anywhere. Now lets look at that is coming next.

T4b_update1

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The final chart below is the same chart but now I have changed the EURUSD price bars to red OHLC bars to make them a little easier to see. On this chart I have drawn a red box around the remainder of this forecast. This time period is May 29 to June 30, 2012. The time of this update is May 28, 2012. Look at the forecast lines inside the box marking the time period. The forecast is as following. (1)A bottom should form in late May or Early June. Then (2) the EURUSD should form a choppy sideways base through most of June. Finally (3) a move up should occur toward the end of June. Some of the forecast lines used to make this forecast run out toward the end of June. This means I will be making a new Master Time Factor forecast for EURUSD toward the end of June. The new forecast should cover 3 month just as this forecast did. This forecast was made using the software Forecasting Made Easy and can be made by anyone using the Master Time Factor chart in this software.

T4b_update3

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