Personal Finance (14): A Multiple-Time-Frame BBC Indicators on STI



Attached shows the Multiple-Time-Frame BBC indicator on Straits Time Index, with the FTSE industries grouping of Singapore Market as components.

 

This is the time as Monthly Wave, Weekly Wave, and Daily Wave (Click on the chart to zoom in) are in sync.  and therefore make this post as social service.

 

The description for all indicators were published in previous entry.

 

Monthly Wave

 

 

 

Weekly Wave

 

Daily Wave

 

Run when you should run, stay when you should stay.

 

 

 
 
(Link of the BBC Indicator)

 

Personal Finance (13): A Confession of a Public Fund Manager In China

Good day,

Attached, ---8<  Cut and Paste >8---- , is the last portion of an article by a public fund manager in China confessing why he can never beat he "super wealth transfer machine"(stock market system) and decided to quit his job.  And, after all, in his 10 years of career as fund manager, he already made more than 10million RMB as a salary despite losing money for his clients...  

The full article, in Chinese, can be read from the link attached:

---------------------------------------Cut and Paste---------------------------------------------
一个公募基金经理的忏悔书
我无法对抗这个制度、我彻底投降、我准备辞职，我对我管理的基金的投资者表示深深的忏悔!我真的无能为力在这个市场中帮助你们赚钱！
　　中国XX基金管理公司 XXX基金经理
　　（恕我在此不公布老东家的名字，毕竟服务多年，领取了千万元的薪水！）
--------------------------------End of Cut and Pate ---------------------------------------------
http://bbs.hexun.com/stock/post_5_5961685_1_d.html

Any way, here is a very very brief summary with the KEY FACTOR of why he can't win:

"The author, 10 years fund manager in China, described that the stock market is a wealth transfer machine.... Due to the fact that the fund managers, by Law and software system, must keep at least 60% of the money in the market. Even if the fund manager want to get out of the stock and keep cash when the market is clearly in down trend or even crashing, the software would not allow them to sell...."

Here are some points of ponder:

* FACT
Now, the above chart showng the China Shanghai and ShenZhen 300 index (SSE300).  There is clearly more down trend than up trend for the past 5 over years.  And, if one were not only can't short the market, but also must spend at least 60% of the fund to purchase stocks at any point of the time.  As a Public Fund Manager, how can they make money as the calculated probability seriously against them?

Anyway, this is  the rules and regultion for fund managers world-wide.  Imagine IF there is no such rule, what would happen, if most fund managers try to find exits for cash?


* OPPORTUNITY
Now, what would you do IF you are a fund manager under such rule?
The manager would at least want to beat the overall market index by selling the worse sectors/stocks and get a ride on the better sectors/stocks.

So, in order to sell 10% worth of weak stocks in his portfolio, the fund manager MUST FIRST purchase at least 10% of the equal value of stronger stocks before the software system allow him to sell the weak one.

This would result in lot of money rushing into relatively handful of sectors/stocks and result in sharp rally!

For Example:  Some Internet/Games companies are the current percieved "safe harbour" and the money is rushing in at this point of time:(QIHU,DATE,GAME,YY)

..the above are just a few, can include the famous BIDU (but the up side is may not be that great as high price stock generally move slower... but safer).


*CONCLUSION:
It is better off spend your resources (time and money) to learn and DIY.  The chances is very much higher. 

AND, off course... don't do this:  Dash into the market without going throuh a proper stock market training, withot going through adequate paper practice, and without a reliable trading system.  It is like the message from the following cartoon I found in facebook. :-)

Thank you for your time, and

Bless You
KH Tang


NOTE: THIS ARTICLE IS MERELY FOR AWARENESS ONLY!

Project Freedom (11): What's "Project Freedom".

Good day,

 

Let's start with some questions:

Do you play Chess?  Any kind of Chess...

How long does it take to train a person to be a World Chess Champion?



Well, the answer to the latter question would not be simply a matter of time to learn.  Just like if everyone were given a chance for education, and not everyone would pass the exams within a given period of time.

 

Now, anyone who uses computer likely has heard of the real story that the long-term world chess champion, Garry Kasparov, was beaten by Deep Blue (a chess-playing computer developed by IBM) in 1997.

  

And, here are some benchmark information on the Deep Blue Computer in 1997 and today's computer technology:

"In June 1997, Deep Blue was the 259th most powerful supercomputer according to the TOP500 list, achieving 11.38 GFLOPS on the High-Performance LINPACK benchmark."

http://en.wikipedia.org/wiki/Deep_Blue_%28chess_computer%29

"As of 2010[update], the fastest PC processors six-core has a theoretical peak performance of 107.55 GFLOPS (Intel Core i7 980 XE) in double precision calculations."

http://en.wikipedia.org/wiki/FLOPS

And, from the "CPU Benchmark site", I found that my current laptop (i7 3632QM) can run about 78% of the i7 980X. Which is 7 times the execution speed of the Deep Blue!!!

Now, lets look at another scenario, if everyone were to carry the same program that was in the Deep Blue on their latest notebook PC today and play chess, who would win???

If the CPU power is the same, then the outcome would be a draw over many games.


Now...
With the above metaphor, lets look into other questions:

If there is a Computer-Aided-Trading Software that can consistently beat the market, and it is made available to the general public at some extremely low cost.  What would happen to the stock market?  Would it bring more positive impacts or negative impact?

My guess is that the software would lost it's effectiveness in making the amount of money as when eveyone has the edge means no one has an edge.

As of today's market, over long run, more than 95% of the general public are making a lost in the market.  So, if and when there is such thing available, it would benefit more than 95% of the people while disappoint the few...


So...
The next question would be: Is it possible for human being to workout such a program that can automatically adapt itself to all kind of market fluctuation and yet continue to make profits even at current environment?

For the previous chess example, it can be computerized because the chess has finite chess pieces and each chess piece has finite moves.  So, even the number would ended up as an enormous huge over many steps into the future move, it can be easily handle with today's computing technology.

And, if one were to go through all the trading books and courses, he would most likely be conditioned by them to believe that success of trading is and art which consists of roughly 30% Trading system, 30% Risk/Reward Management, and 40% Psychology.

Personally, I know that anything had been logically done by a human brian, it had gone through certian processes and can be programmed into software.  In order to write the software, a model of the stockmarket chess board has to be built first....

Take for example.... 
The following diagram shows a Stock Market Chess Model.
Note: Those item marked with "*" was posted in previous articles.  (Click and Zoom In)

And the following shows the OUTPUTs from the model.

Genting Singapore Chart (Click and Zoom In)

 

Google Chart(Click and Zoom In)

 

Apple Chart(Click and Zoom In)

 

.
The Galaxy Chart with Dow Jones Industrial Average and it's components:(How it works) <-- link="" p="">

Of course, the model is not perfect, as no model will be as stock market is a living things projected by the mass consciousness of human minds.

On the other hand, as illustrated from the outputs from the model, using it to protect personal financial wealth can be easily achieveable.

And, this is what I mean by "Project Freedom".


Bless You
KH Tang

"Whatever I desire for me,
I desire for all humanity"
- Barrie Konicov

 

---------------------------------------------- Added on 30 Aug 2013 --------------------------------------------

My Vision and Believe in Faning Out OGTS.

 

Self Development Idea (15): The Template for Your Journey

Recently, I have come across a very interesting book with profound insight – “The Hero with a Thousand Faces” – released in 1949, by Joseph Campbell.

Since then, it became the "Bible" of movie script writers.  And, the stages of the hero's journey outlined in the book had influenced a number flimmakers...  Such as George Lucas's Star Wars, Disney's The Lion King, etc...
 






The.
There are many articles on the internet wrote about the details on each step on the template, and I found an excellent short video clip in Youtube that illustrate the points clearly:
Here is the link if you cannot see it below: -> LINK

Now, I AM curious... 
Is there any metaphor that we can learn something from this?

Of course.  Since the Hollywood script writers can use it so successfully over and over, again and again to create movies that can resonate with the audience, meaning that there is something within the viewers even the viewers themselves may not consciously aware of it...

See, I believe that the Author, Joseph Campbell did not write this book to with the intention to inspire filmmakers or story writers.  He wrote this to inspire all his readers and gave them many examples of how Hero in the past had acheive their success and what stages (challenges) they had been through. 

There is a Chinese saying, "人生如戏 戏如人生"  - "A Life is just like a Movie, a Movie is just like a Life."   So true! 
Then, isn't it a good idea to use the template to recognize what stage are we in the journey of life right now, and then continue to write the scripts for our own magnificent journey?

 

 

Life is without meaning.  You bring the

meaning to it.  The meaning of life

is whatever you ascribe it to be. 

Being alive is the meaning.

- Joseph Campbell

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Personal Finance (10): The Biggest Leaking Hole in the Personal Financial Bucket

Imagine that every one has a personal financial bucket as a preparation for their retirement. And, they would go out to work as hard as the bee in order to fill them up.  But, what happen in reality is that there is a Big Leaking Hole at the bottom of their bucket that most might not be aware of or did not take it seriously yet…

For this, I AM refering to the Global Public Debt, and here is the link:

http://www.economist.com/content/global_debt_clock

Now, there are few projects that can be done with these data.

Example one: What's the Growth Rate of the Global Public Debt?

Here are some other Inconvenient Questions for individual who has the interest to Ponder and Find out:

* What is the Public Growth Rate of your own country? (One can take down the data on the right hand corner year by year to workout the chart.)

* On the right column of the Global Public Debt Clock, there is a item "Public Debt vs GDP" by country.  What does it mean when it is approaching 100% or some even go over the 100% mark?
Think in terms of a public company, what would happen if it keep lossing money year over year?

* On the "Public Debt per Person"...  That is the Leaking Hole in individual financial bucket...  Even you don't spend it, it is the load you have to carry, which include newly born babies and 90 years old senior citizens.  Why is it continue to grow, and some even with exponetial rate?

* With the current debt rate, there are already so much trouble with the economy.  What would the economy outlook with a higher debt rate future (as predicted by the trend of the chart.)?  Would there be more financial crisis such as the fiscal cliff event?

Of course,  as the exact data would not be easily available to the public, these data are good for reference and benchmark purposes,

One may be FEAR to find out the answer by himself...
And, when one facing  FEAR, he has two choices:
1. Forget Everything And Run.
2. Face Evidence And Rise!

(YouTube Link)
This 59 second video explains the concept & situation clearly!

“The world is not a problem; the problem

is your unawareness”

-Bhagwan Shree Rajneesh

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Self Development Idea (14) - There are Pattern of Cycles in Life

A week ago, I attended a Trading Seminar on CFD (a kind of leveraged derivative product).  And, I was surprised to notice something interesting, there is some kind of a pattern, that worth the while to write it down.

Just like the products in the market, everything that lives has a pattern of cycle in their life, and it goes through the phases of birth, growth, fruitage, and decline.

Isn't it true that when a baby is born, he will have to go through some patterns that designed for him.

Such as go through the kindergarten, primary school, secondary school, college and university, then start to work, .... , retire and then die.

So, back to the subject that I want to write about, and here is the "Pattern" that I noticed in the seminar:

It was held in a big lecture theatre.  There are three columns of seats and each column has about 30 rows of seats.  Though it was not full-house, I figured out that there was about 350 participants.  I paid attention on the age of the participants in the recess time.  I can divide them into three age group of participants.

1) The age group of 30-45 (25%) 

2) The age group of 45-55 (50%)

3) The age group of 55-60 (25%)

And, when the seminar start, the speaker asked: "How many of you are the first time to attend such seminar?"  I saw about 50% of the people in the room put up their hands.

Do you noticed that most of the people, at least in this place, wait until they are retired or about to retire, then they start to learn about the stock market.

It was quite a "happy" seminar, because the speaker flipped through a couple of historical charts and showed the audience that how money can be easily made with some very simple strategies.  Also, with the leverage, a few ten of thousands dollars is all you need to make more than the averaged pay worker in the country.  

A few rounds of applause had gone round the theatre when the speakers shown some strategies to handle the historical charts and emphasis that it can be easily done with very little training - where to buy and when to sell.

Since, the speaker had mentioned that no one can take any audio recording nor video, or he will sue the person...

Then... I saw many hard working participants taking tons of notes while the speaker delivering the presentation.

And, me too...  make my own note after the seminar.  Just a few words with a picture, and it is attached below.

Well, this is NOT to make joke of the beginner participants for believing that there is easy money out there for them to pick,  for I'd been there, done that ten over years ago...   RATHER, the intention is to alert all to take time to know about this stuffs... 

 

Personally, I view this as a failure of the public education system (worldwide) that there is no syllabus in educating students on the area of personal finance and stock market in their early stage of life.

 

 

See.  If we can know some kind of challenges (pattern of cycles) that we will have to face years down the road.  Wouldn't it be good to spend time in learning more about it and be prepared first before we need to handle it face-to-face?   As sooner or later, most likely one will come to a point where he need to handle his personal finance as saving in the banks is not getting any yield, and fund managers are not reliable nowadays.

 

"Most people tip-toe through life, hoping

they’ll make it safely to death."

– Bob Proctor

 

 

-----------------------Add on 13 Dec 12----------------------

 

This is a typical chart from advertisement. 

Unfortunately, they do not supply with a time machine to take full advantage of it.

 

 

 

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Project Freedom (10): Trading with the BBC Breadth Indicator

What is a Market Breadth Indicator?
In short, a Market Breadth Indicator is a kind of Technical Analysis(TA) that design with the intention to gauge the direction of the overall market. 

Unlike most indicators in TA, which use only the information from a single stock to workout the indicator, Market Breadth Indicators are generated by analyzing the total number of companies in a given market. 

In general, it compares the advancing and declining issues in the market and uses specific formula to generate the ratio, such as TRIN (Arms Index),  and some use other filtering technique to smooth it out like various kind of McClellan Oscillators and Summation Index.

Actually, think about it, the price chart of SPY(S&P 500) and many other indices can also be viewed as a kind of Market Breadth Indicator too.

If those who want to know more about Market Breadth Indicators, there is an excellent book with good coverage and detail formula on this area: The Complete Guide to Market Breadth Indictors: How to Analyze and Evaluate market Direction and Strength by Gregory L. Morris (Sep 21,2005)


Why using Market Breadth Indicator?
For all classical Technical Analysis text books, they emphasis on buying the strongest stocks in the strongest sectors when the overall market is bullish, and selling the weakest stocks in the weakest sectors when the overall market is bearish. 

So, the very first step is to have a reliable indicator to know how is the overall market is performing. And, the best tool would be the market breath indicators - because they are calculated based on all components in the market.

The following picture using the school of fish as an analogy to illustrate the importance of Market Breadth Indicator...  It would be interesting to note that when the market is bullish, on various time from minute, day, week, to month...  most of the stocks would be up and vice versa in bearish market.  Of course, the market is formed by individual stock anyway. 

So, here are the two key important point for using Market Breadth Indicators:
1) using the Market Breadth Indicators is the very first step that can help traders/investors operations to be in sync with the market movement/ direction and have higher probability in winning!

 2) Market Breadth Indicators are less subected to noise and market manipulation.
In a previous blog entry on BACK TESTING...  The results have CLEARLY shown that Market Breadth Iindicators can withstand the test of time.



Why introducing the BBC Breadth Indicator?
Of all the Market Breadth Indicators in the public domain, all are calculated based on the one period advance and decline issues of the market.

Whereas the BBC (Bullish-Bearish-Consolidation) Breadth Indicator can used more advanced formulas and provide even simpler presentation for the user to understand the states of the market.

Take for examples, it can workout a Multiple-Time-Frames BBC indicators and display in the daily chart (or basically any time frame).



Charting Examples of BBC Indicator:(Note: click on each chart to ZOOM IN)

The following charts show various examples for the BBC Breadth Indicator.
In the following chart:

1) the top pane shows a tri-states (Bull, Bear & Consolidation) momentum indicator of SPY.

2) the second pane shows a tri-states Trend Indicator.(These Tri-states indicators were introduced in the previous blog entries).

3) the third pane shows the price chart of SPY.

4) the forth pane shows the Momentum BBC Breadth Indicator of SPY.  It was workout according the the above attached formula.  It calculates the total number of of Bullish, Bearish and Consolidation ticker, in Momentum wise, for the SPY (in this case, a total of 500).   Then it groups the number into Percentage of  BULL (Green Line), BEAR (Red Line) and Consolidation (Blue Line).

5) the last pane in the bottom shows the Trending BBC Breadth Indicator of SPY.    It calculates the total number of of Bullish, Bearish and Consolidation ticker, in Tredning wise, for the SPY (in this case, a total of 500). Then it groups the number into Percentage of BULL (Green Line), BEAR (Red Line) and Consolidation (Blue Line).

This can provide the user to have the winning probability in mind.  The best opportunities are when both Momentum and Trending Windows are opened and in Sync on one direction!
 
SPY Chart with BBC Indicators:




^STI Chart with BBC Indicators:







Sector Chart (XHB) with BBC Indicators:

China SSE 380 index (000009.SS) with BBC Indicator

QQQ Chart: Using BBC indicators as the Galaxy Chart's Companion: 
One way to use the BBC indicators is to put them in work together with the Galaxy Chart.  For example, the BBC chart can show the overall strength of the market (in this case, the QQQ), while the Galaxy Chart can pinpoint down to which particular stock within the QQQ is leading or lagging the overall ETF perfromance.  This works in ANY TIME FRAME in run-time.

Other Points to Considers:
* Most market breadth indicator are equal-weighted.  BUT, most index are Capital Weigthed.  Some are Dollar Weighted, Dow Jones Industrial Average and Nikkei 225.  And, most ETF are Portfolio Weighted with component changing in quarters.  These are the factors that need to take into consideration when working with Breadth Indicators.

By the way, here is a link for the Typical Market Breadth Indicator and it covers most ETFs that are having USA companies too.



Wish that it has inspired you and good luck.
KH Tang



And, if it doesn't, never mind... the follow quote from "Edgar Cayce Handbook for creating your future" may....

"Are we to live only for ourselves, using others to our advantage, or are we to care

about someone or something beyond ourselves?  The first choice may lead to

greater comfort and convenience, at least temporarily.  The secand calls

for the definite inconvenience of taking on the burdens of others. 

-- Only the second choice leads to happiness!"

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Project Freedom (9): Trading with the Mutiple-Time-Frames Moving Distribution Charts

I had a tug of war in my mind for some time whether it is the right time to post this new concept of trading in the public domain which I'd developed.  I tossed the coins and my subconscious mind replied: "Go Ahead and post it."

Above are few distribution charts that some financial analyists borrow from statisticians.  Usually, it is shown as a monthly, quarterly or yearly chart to describe the market performance over the state periods in terms of it percentage changes.  So, it is purely a statistic chart and has not much meaning for trading purposes.  For example, as shown in the chart, that a stock "WXYZ" is out perform the market over the last period of time, but it does not show the momentum and trending direction it is continue to move.


The following chart with New indicators - The Moving Distribution Curves, show a NEW way to trade the market.  Take for example, the following chart shows the XLE - Energy Sector ETF.  It's short term Momentum, mid-term Swing and long-term Trend are benchmarked within the whole database (in this case, all ETFs except leveraged ETFs). 

The Brownline show the Current Ticker Relative Strength, in this case is XLE, against all other ETFs in the database.  The Blackline shows the Market Reference Relative Strength, in this case is SPY (S&P500).  And, the Greyline shows the unchanged USD1 Cash Reference Relative Strength.

See...  In Bull market, stocks go up and cash reference line move down.  And, in Bear market, stocks go down and cash reference line move up. 

 

Now, here is a better way to interpret the three color lines in the follow chart.  It shows the same chart, and added the distribution chart on the indicators.  View it as the ditribution charts are moving under the price chart over time, the Brownline shows the the ticker percentile in the database at the point of time.  One would like to BUY the ticker with 1, Stronger than the market reference, and 2, above 80 percentile.  Similar interpretation goes with the Blackline and Greyline.

See.  Stocks/ETFs don't move randomly...  if there is no special demand, it would not move above the 80 percentile.   Similarly, if without special supply, it would not move below the 20% either.

 








Attached are just a few more daily chart with Moving Distribution Curve as examples: KOL, SLV, BRK-A, GLD and QQQ.

Attached are some Weekly Chart examples on: QQQ and BAL.

Note: 
* All the Charts can be Zoom to fit in 24 inch monitor for clearer display.

* The distribution shape illustrated here is for explanation purposes only, as the stock distribution over time does not necessary fit into this kind of shapes and varies over time.  And, some one had recommended me to see this article:  http://hanwangquant.blogspot.sg/2011/09/
And, I found that it helps to explain this concept, and also can be easily implemented in the moving distribution curve.

* This is a new kind of Market Breadth Indicator can be applied on single stock or ETF.

* At any one time, there are tickers fill up the full range from 0 to 100.  Choose to long or short according to th reference line position to have the edge.

* A much better way to "occupy the Wall Street" is to have the public to understand exactly how the game is played.

"Man belongs wherever man wants to go. 

He goes where his vision is!"

- Joseph Murphy

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Questions From The Future.

IMAGINE that if you were to invite by aliens to have a tour in to the galaxy and return to earth a 100 years later... Or, reincarnated onto earth plane few generations later.... 

What will the earth look like when you return?

Or If you have a choice,

What would you like to see?

The following diagram illustrates how material wealth is produced.  We can either grow it on earth or mine it from earth and process it. 

Gold Mining:

Satellite Photos on Amazon Deforestation:->

Photo on year 2000:

Photo on year 2009:

Dilemma for modern Economy:
Apparently, the modern society MAINLY measure wealth by counting how much toys can a person accumulate.  The more and faster it progress, the harder the earth will be squeezed.   And, Easter Island is just an example.

.
Here is a relevant video by Professor Albert Bartlett :
"The Greatest Challenge" humanity is facing




---------------------------------------------------8<---------------------------------------------------------

“To reverse the effects of civilization would destroy the dreams of a lot of people. There's no way around it. We can talk all we want about sustainability, but there's a sense in which it doesn't matter that these people's dreams are based on, embedded in, intertwined with, and formed by an inherently destructive economic and social system. Their dreams are still their dreams. What right do I -- or does anyone else -- have to destroy them.

At the same time, what right do they have to destroy the world?”

“We cannot hope to create a sustainable culture with any but sustainable souls.” 

― Derrick Jensen, Endgame, Vol. 1: The Problem of Civilization

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Relevant picture added on 7 Dec 2012 found in facebook -"Knowledge of Today"

“Only when the last tree has died and the last river been poisoned and the last fish been caught will we realize we cannot eat money.” ~Cree Indian Proverb








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