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Rare planetary alignment "Cardinal Climax"

Discussion in 'Asset Protection/Taxes/Legal' started by topherea, Jun 30, 2010.

  1. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    Hey all. I just wanted to give a heads up for a rare planetary alignment that is suppose to occur around August 1st that astronomers are calling a "Cardinal Climax", and I wanted to share this Seeking Alpha blog interview of Arch Crawford posted by Hewitt Heiserman Jr. with you.

    Granted, this is centered around trading, but if it does have the described effect, it can affect many people and many industries.

    ------------------------------
    Rare “Cardinal Climax†Planetary Alignment This Summer Puts Stocks at Risk, says Veteran Sky Watcher


    This summer the planets form a rare “Cardinal Climax†alignment, which puts financial markets at risk, says Arch Crawford. Publisher of Crawford Perspectives since 1977, the veteran sky watcher uses a mix of technical analysis and astrology to gauge which way equities and other asset classes are headed. To learn more about this unorthodox investment process, I recently spoke to Mr. Crawford about some of his best calls, what day the Cardinal Climax strikes, and how to prepare for the turmoil he expects. Here is an edited version of our conversation.



    We want to talk about the upcoming Cardinal Climax, which you say puts stocks—and perhaps humanity—in jeopardy. But first, explain to Seeking Alpha readers how you invest?

    Certain planetary alignments put people under extra stress. And one way this stress manifests itself is in financial markets. After all, financial markets are a mix of fundamentals and emotion. Since astrologic events affect our emotions, I find it profitable to study the planets.

    Tell me more.

    It is common knowledge that when there is a full moon, there are more car accidents and other forms of aggressive behavior. Since financial markets partly reflect our hopes and fears, these markets are prone to mood swings. If you can anticipate these mood swings, you gain an edge over investors who focus solely on interest rates, growth forecasts, debt loads, and other traditional yardsticks.

    I have examined every substantial move in the Dow Jones Industrial Average since 1896, and I find that when planets are at difficult angles, then owning stocks and commodities is riskier.

    What is a “difficult†angle?

    When two planets form a 45-, 90-, 135-, or 180-degree angle, with earth as the midpoint between the two planets.

    Why do difficult angles cause difficult markets?

    The reasons are partially understood. In the 1940’s, radio propagation specialist John Nelson studied planetary alignments to time sunspot activity and solar flares, and thereby help his employer, RCA, reroute shortwave radio transmissions efficiently. Years later, when I got interested in alignments and became friendly with John, he would tell me when a flare was in progress. I would then call a broker and find that, typically, stocks were dropping and gold was rising. In concert with new and full moons, where the tidal forces brought the atmospheric disturbances closer to the earth, extreme volatility would ensue in markets where a significant emotional component was already in progress.

    For instance, the highest sustained period of ionospheric electrons measured by geosynchronous satellite took place the week before and during the October 1987 crash, and then dropped back on the day of the stock market low.

    Recent studies by physicists, biologists and cosmologists show gravitational and electromagnetic activity affects the growth patterns of many species here on earth. Much of this data was collected and correlated by the Foundation for the Study of Cycles, in Albuquerque, NM.

    I once did a study of the worst days in the stock market. Two-thirds of those days occurred in one-third of the calendar year, centered on the Fall Equinox, around Sept. 22-23. Maybe there is a symmetry that governs the universe that we haven’t yet figured out.

    How did a physics and math major from the University of North Carolina get interested in planets?

    I read about it on the front page of the Wall Street Journal in 1963, while a technical market analyst at Merrill Lynch. I was the first assistant to the legendary Robert Farrell, who was repeatedly voted best on the Street by his peers in the annual Institutional Investormagazine poll. My curiosity piqued, I looked into this subject and found that difficult alignments correlated with difficult markets. The correlation was too well-defined to be chance.

    Give us examples when difficult alignments correlated with difficult markets. Let’s start with the Great Depression.

    During 1929-1932 there were several difficult planetary alignments.

    What about the October 1987 crash?

    On Aug. 24, planets were in the tightest five-body “conjunction,†or same ecliptic longitude, in at least 800 years. “It doesn't get any better than this,†I reasoned. Therefore, “A severe decline will follow,†I told subscribers. Turns out, Aug. 24 was the top. From that alignment high to the Oct. 20 low, the Dow fell 33%. A difficult planetary alignment preceded a difficult stock market.

    What about the 2008 Crash?

    Our research showed a Mars-Uranus “crash cycle†beginning Aug. 6, 2008 and ending in late-Mar. 2009. So beginning several months before Aug. 6, we repeatedly told subscribers, “Neither Wall Street nor our Government will be able to hold markets up against the 'deluge'!"

    Further, on Sept. 2 we told subscribers that the worst part of the crash would occur on Oct. 10, plus or minus three trading days. We repeated this forecast on Oct. 2. Our headline was: “Market Crash – Dead Ahead.†Turns out, Oct. 10 had the largest number of new lows on the NYSE ever, at 1203.

    Why did you choose Oct. 10?

    There was a full moon after the market closed on Oct. 9. Also, there was a “Grand Cross†alignment at this time, with the sun opposite the moon, and squaring Uranus opposite Neptune.

    So this is another example of when a difficult planetary alignment preceded a difficult stock market.

    Did the planets or your technical analysis forecast the rebound in stocks which began March 9, 2009?

    Our March 2 headline was: "Best Bet - Nearby Low!"

    Then on March 12 we told subscribers: "We believe this rally confirms a strong buy.â€

    Does energy from difficult alignments reveal itself in ways that go beyond financial markets?

    In April 1986 we had a Lunar Eclipse conjunct Pluto. The close proximity with Pluto is rare. So we told subscribers, "If you don't feel this one, you're not alive!" We were prophetic, as the April 26th Chernobyl accident raised radiation levels worldwide.

    By the way, we have another Lunar Eclipse conjunct with Plato on June 26. Pluto “rules†nuclear power, debt, interest rates, and the use of force, say the astrologers. Maybe June 26 is the de facto start of the Cardinal Climax.

    In November 1989, we observed a Saturn conjunct with Neptune, both opposite Jupiter to the day. This alignment happens every hundreds of years; i.e., it is extremely rare. Several days later the Berlin Wall fell.

    In our July 1990 we told subscribers, “This will be one of the worst days of the century. There will be coercion, the use of force, a large explosion and heartlessness or cruelty August 2-7." On Aug. 2, Saddam Hussein unexpectedly attacked Kuwait. What alarmed me was the Lunar Eclipse forming another Grand Cross, this time with Mars opposite Pluto.

    What about September 11, 2001?

    In our letter mailed Sept. 4 we wrote that when Mars hits the solar eclipse point on Sep. 7th or Sep. 8th, then the U.S. will be at war.

    Do the planets ever fool you?

    We are still in the 'covered wagon days' of this as a science. Much of the time is without major significance. Also, the “big alignments†can be tricky to interpret. But some alignments—this summer’s Cardinal Climax, for instance—are unambiguous.

    Let’s talk about the Cardinal Climax.

    On August 1, give or take a week, we’ll have the most five-planet alignments in perhaps thousands of years. Known as the “Cardinal Climax,†this is the meanest, nastiest, most challenging and most transformational of any planetary phenomena in all of written history!


    We’re giving readers a link to a chart showing the Cardinal Climax.
    http://static.seekingalpha.com/uploads/2010/3/31/234091-127005352366179_origin.jpg

    What do you see?

    This is the view of the planets from New York City on Aug. 1, at 6am. We have the most planets in the tightest alignments and at the supposedly 'sensitive' Zero degrees of Cardinal signs. It makes the hair on the back of my neck stand up.

    I looked at records going back to the 1800’s, and this is the most difficult alignment I found. When I was at a conference in Boston last month, someone said this was the most difficult alignment they have seen in the last "1,000 years." Another person told me this is the worst alignment in "10,000 years."

    What are possible consequences?

    Worst cases include a nuclear accident. Nuclear war. Massive societal collapse. Maybe a pole flip, which can wipe out nearly everything.

    Cardinal Climax is especially intimidating because of the proximity to the widely touted Mayan Calendar End Date. Plus, the Christians are looking for the Return of Jesus and/or the Rapture, the Muslims await the return of the umteenth Imam, the White Buffalo has been born, and Jews are fighting over the right to rebuild Solomon's Temple on the 'temple mount' in Jerusalem. These are all signs of “end times†by many different cultures.

    The one thing most convincing to me is that there are more people alive on the planet today than all who have ever lived in recorded history. So it may be that every soul is on board for this event!

    At a recent 1180, did the S&P 500 already peak for 2010?

    The top may be this month or in May, based on normal seasonal and astrologic patterns.

    Will Cardinal Climax cause just U.S. stocks to fall? Or is this a global meltdown?

    Definitely global.

    If I sell my stocks, as you advise, where do I put my money?

    The best money will be made on the downside in shorts, stock index futures, negative ETF’s, and put options. However, we do not recommend that subscribers buy options—especially if they are not seasoned traders. With options, you can get the direction right but then maybe not get paid in usable currency before the whole system melts down.

    Inflationists advise buying commodities, to protect against the 21% year-over-year increase in Federal Reserve assets, and the 15% year-over-year increase in U.S. public debt.

    We are probably seeing a peak in general optimism about the economy and commodity prices. When suspicion arises that a double dip or worse is about to return, we will see the commodity averages slip into the tank. Even assets in the ground will not hold against a worldwide depression that is well on its way.

    Deflationists say buy long-term U.S. Treasuries, because it will take years to reduce a 375% debt-GDP ratio, and because the M1 money multiplier is barely pulsing, at 0.8x.

    We’d rather be long German, Swiss or Australian bonds, although U.S. bonds will probably do well on the initial declines. Do not overstay as the U.S. Dollar will come down hard. The United States will come apart in this Depression!

    Besides selling stocks, what other precautions do you advise?

    Our markets may be the least of our worries, given this powerful and chaotic frame. The Mormon mandate of keeping two years worth of food and water in your home is common sense.

    How do we know when it is safe to own stocks again?

    "When CNBC becomes a sports station!,†to quote my friend Jim Grant.

    You have 55 years of investing experience. What have you learned?

    Nearly all of our frustrations in the market result from our unfulfilled expectations about what we thought a market ‘should’ do. No one knows the future.

    Also, investing is probabilistic. So if you think knowing how to ‘read’ planetary alignments increases your probability of success, then get planetary literate.

    Thank you, Mr. Crawford.


    Rare “Cardinal Climax†Planetary Alignment This Summer Puts Stocks at Risk, says Veteran Sky Watcher - Hewitt Heiserman -- Seeking Alpha
    --------------------------------------------------------------

    A wee bit extreme if you ask me but I just wanted to put it out there for all of the good people here in The Fast Lane!

    -Topher
     
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  2. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    rocknrollkid 30 kph Read The Millionaire Fastlane

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    I don't like reading things like that.

    When you say a full moon brings on aggression all your doing is planting seeds in peoples heads giving them a reason on a sub conscious level to act like an idiot because the moon is full.
     
  4. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    I know it's negative, but I also know that it is going to occur which is why I'm just putting it out there so that everyone here watches the backs of themselves and their families.

    I know it's a small possibility that anything will happen, but being aware is not a bad thing.

    What you said above here holds a lot of truth but on a much greater level than a few people here who may read this. In all honesty this could be used as a front of some sort too. Who knows? All I know is I'm the type a guy who likes to be aware of possibilities. But of course as we all know, there's been doom and gloom talk forever, but again, being aware is not a bad thing.
     
  5. JamesF
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    JamesF 80 kph Read The Millionaire Fastlane Speedway Pass

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    Uh... I tried to read it, but honestly kept losing focus after about the second paragraph.. basically the world is gonna collapse or something?

    I've watched 2012 like many of you, I've seen the recent coverage on huge earthquakes, floods, heard news of an actual solar flare in the next years, etc.

    but I am not worried or least concerned. People have been saying the world is going to end or be destroyed since time began. What happens, happens.. If something does, oh well nothing you can do. If it's a bust like y2k, great, more time to make money.

    Hell we all will die one day. The thought of knowing you'll die one day actually shapes your biggest choices in life.. so work hard, live fun, drink good wine, be merry, and follow your heart.
     
  6. Russ H
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    Russ H 160 kph Read The Millionaire Fastlane Speedway Pass

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    bateati-

    I'm sure you have learned things-- amazing things-- being in the military. Some things that people just wouldn't believe if they didn't see them in person.

    Same thing w/full moons. I worked in the hospital for years. We never had to look at the calendar to see when it was a full moon-- we just had to be in the ER. That was always the night that lots of strange sh*t came in.

    I'm not saying these weird things were rooted in violence-- but there is no doubt in my mind that full moons can trigger some strange behavior in some folks. Least that's what I saw.

    -Russ H.
     
  7. PaulRobert
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    PaulRobert 140 kph FASTLANE INSIDER Read The Millionaire Fastlane Speedway Pass

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    I can agree on that. Whenever there is a full moon and only then, I wake up every time at 3:00 AM on the dot and can't sleep. Whatever I try to do, I can't fall asleep. The best method to pass the time is to turn on my iPod and listen to it, laying in bed. I don't know why this happens but it does. The good thing is that I am fully awake by the time 6 AM turns around and full of energy.
     
  8. Forza
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    Forza 10 kph

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    An astrologist???? Oooookay.
     
  9. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    Hey James- wuzzup...

    I've seen 2012 too and basically chalk it up to hollywood capitalism. Also, I'm not a doom and gloomer either. As a matter of fact, it strikes me as odd that people have only been making a big deal out of this 2012 thing within the last couple years or less. If it was the "end all" you'd think we would've been hearing about it since the day we were able to comprehend but interestingly, it only really surfaced these last couple years.

    My concern is much deeper rooted whereas to give you some background, on Sept. 11, 01, I was going through my usual morning routine of firing up my computer & getting ready to trade, and turning on CNBC (back when cnbc was actually worth watching). So, I was one of the people that got to watch the World Trade Center attack live in it's entirety.

    The reason why I'm bringing this up is because while watching it burn, I also watched Maria Bartiromo covered in dust in the NYSE and obviously shaken with fear but bravely reporting and doing her job to the absolute BEST of her abilities. I felt for her because she could've left but she didn't. That's human and real.

    Now while watching the towers burn, I SAW THE DEMON FACE IN THE FIRE LOOK AROUND AND IT STAYED THERE BURNING IN THE FIRE FOR MAYBE 20 MINUTES!!!

    This 'face' was real enough that it made the front cover of Life magazine.
    But, what's interesting is it doesn't matter how much youtube or other video source one would use to try and watch that face again, because I GUARANTEE that you will never EVER see the REAL THING THAT OCCURRED LIVE ever again.

    ...and you want to know why... Because it wasn't real. It was super-imposed. As a matter of fact, it was so fake that I can understand why someone of such arrogance would want to bury it as it was a bit excessive, and a link that needed to be destroyed.

    You will find pictures, but you will not find the entire video scene in it's entirety.

    NOW...if you're still reading this:smxB:, the planetary alignment I mentioned above is going to happen. AND I believe that it will have the capacity to alter some emotions on Earth BUT as bateati mentioned, people may use this and ACT ON IT. Bad people. Powerful people who may use it to super-impose a catastrophe. Maybe not, but as Cat Man Du has said, TV is poison and this may be a turning point to where people may actually have to start 'thinking' instead of just'being'.

    Be aware.
     
  10. moop
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    moop 10 kph

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    This is certainly an interesting theory. Are you planning on capitalizing on this phenomenon and have you performed any comprehensive back tests?
     
  11. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    Well... I am a fan of natural order and do use Fibonacci retracements on occasion along with other instruments that are based on fib numbers. I also am quite fascinated with the work of W.D. Gann and his predictive abilities derived through planetary alignments and time back in the early to mid 1900s. To the best of my knowledge he was and still is considered to be one of the best traders of all time.

    But 'me' as a trader in the year 2010, and knowing that the Vix is trading in an upper range, I personally won't hold anything for an extended period of time regardless of where and how the planets are twirling, and would rather be closed out of a position within 2-4 days. In reference to the above interview, obviously I'm aware of it and if things do start breaking down, I believe that it may then produce a higher probability to the down side, if anything, due to a self fulfilling prophecy if not of the alignment itself.

    However, I'm also quite aware of the power of the bots that are now starting to take over the markets worldwide, and I believe that their influence and growing power is not to be ignored.

    How 'bout you? What's your take? Why do you find the theory to be interesting? Thanks for contributing to the thread!

    -Christopher
     
  12. moop
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    moop 10 kph

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    I find this theory interesting because it highlights how seemingly irrelevant circumstances can drive the financial markets. Victor Niederhoffer once wrote a paper on font size in newspapers and it's effect on stock prices. Apparently, the font size affected the perception of certain stocks and hence affected price movements. As such, a certain level of causality existed, which seems to be the case with your theory as well.

    Then there are cases where correlation exists despite the absence of causality. In Wall Street warriors, Richard Taglianetti (an investment manager) mentioned a successful hedge fund manager who bought and sold stock depending on the movement of animals in Africa. As crazy as that sounds, he found a correlation and made a great deal of money.

    You're definitely right about bots. There is a huge effect on the markets by super fast computers operated by large investment banks and funds. This type of trading exacerbated the gigantic drop we saw back in may.

    By the way, what is your primary trading strategy? My area of interest is stat arb and pairs trading. Consequently, these types of trading strategies are perfect for periods of high volatility.
     
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  13. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    I find this theory interesting because it highlights how seemingly irrelevant circumstances can drive the financial markets.

    I agree, but I wouldn't place trades based on it. If it does prove to move the probabilities, I would trade with it but I still would wait for a setup. With me, I lose when I break my rules. So regardless of what the underlying reason/influence may be for a market direction, as long as I follow my rules, my equity curve will remain consistent.

    ...bought and sold stock depending on the movement of animals in Africa.

    Yeah. I find this interesting too and would think that this does have some form of relation to natural order. I've never seen Wall Street Warriors but now would like to.

    By the way, what is your primary trading strategy? My area of interest is stat arb and pairs trading. Consequently, these types of trading strategies are perfect for periods of high volatility.

    With my trading, I am about as simple as it gets. I buy and sell equities...One at a time. :) I create a list based on certain fundamentals but primarily technical, and then wait for a technical setup, while keeping in mind what the S&P, Dow and Naz are doing, and open the position. I don't know if you've followed any bits or pieces of my story here that I have scattered throughout the forum, but basically I'm starting over so currently I'm an all or none trader and will be using close to 100% of equity on my trades, once my new broker gives me the go-ahead. However, when/if I make it to the next tier, I will then be adjusting my position size according to the volatility of the security being traded. In reference to the length of time that I like to hold positions, when the Vix is trading in higher ranges, I like to get in and out quick, usually 2-4 days, and when the Vix is trading in lower ranges, I'm comfortable with longer-term swings.

    In reference to your trading style, and please correct me if I'm wrong, but my understanding of stat arb is essentially compared to that of a portfolio manager, whereas when your holdings reach over-bought/sold levels, you reduce the position sizes and increase the opposing paired position...?

    And please if you could, for the readers here who may have a developing interest in trading, perhaps explain how this type of trading suits you and why it works well for you in periods of higher volatility. And- what pairs do you like to trade? And- do you continue with the same strategy or adjust when volatility decreases?

    And- again, thanks for contributing to this thread.

    -Christopher

    By the way, I sent you some reputation!
     
  14. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    U.S. Tomahawk Missiles Deployed Near China Send Message

    U.S. Tomahawk Missiles Deployed Near China Send Message - Yahoo! News

    quote from article

    "The submarines aren't the only new potential issue of concern for the Chinese. Two major military exercises involving the U.S. and its allies in the region are now under way. More than three dozen naval ships and subs began participating in the "Rim of the Pacific" war games off Hawaii on Wednesday. Some 20,000 personnel from 14 nations are involved in the biennial exercise, which includes missile drills and the sinking of three abandoned vessels playing the role of enemy ships. Nations joining the U.S. in what is billed as the world's largest-ever naval war game are Australia, Canada, Chile, Colombia, France, Indonesia, Japan, South Korea, Malaysia, the Netherlands, Peru, Singapore and Thailand. Closer to China, CARAT 2010 - for Cooperation Afloat Readiness and Training - just got under way off Singapore. The operation involves 17,000 personnel and 73 ships from the U.S., Singapore, Bangladesh, Brunei, Cambodia, Indonesia, Malaysia, the Philippines and Thailand. (See "Hu's Visit: Finding a Way Forward on U.S.-China Relations.")
    China is absent from both exercises, and that's no oversight. Many nations in the eastern Pacific, including Australia, Japan, Indonesia, South Korea and Vietnam, have been encouraging the U.S. to push back against what they see as China's increasingly aggressive actions in the South China Sea. And the U.S. military remains concerned over China's growing missile force - now more than 1,000 - near the Taiwan Strait. The Tomahawks' arrival "is part of a larger effort to bolster our capabilities in the region," Glaser says. "It sends a signal that nobody should rule out our determination to be the balancer in the region that many countries there want us to be." No doubt Beijing got the signal."
     
  15. moop
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    From what I understand about stat arb, it relies on the deviation of long standing high order correlation between stocks. Judging from what i've read so far, the mathematics involved is intimidating to say the least as stat arb is heavily related to quantitative finance.

    Conceptually, my form of pairs trading is relatively simple: For each long position taken, initiate an equivalent short position. Overall, you should be aiming to create a portfolio of long and short positions which will produce profit as long as the long positions outperform the short positions. The reason this strategy appeals to me is because:

    1) It protects your portfolio from market directional risk. You would be reasonably insulated from unpredictable market drops

    2) Unlike traditional trading, it doesn't require you to forecast overall market direction. I find it much easier to determine which stocks will outperform/under perform over a period of time as opposed to predicting long or short term market movements.

    Although traditional stat arb relies on co-integration to identify potential positions, I've spent most of my time crafting my own indicators and techniques to identify opportunities. They've had reasonable success but they are still an inexact method of trading and I have dozens of hypotheses still to test. Overall, fundamental analysis is probably the most effective approach to long term pairs trading.

    Volatility is extremely beneficial as it creates larger movements of both long and short positions. A problem I've encountered is the effect of commissions, which significantly cut into profits. To overcome this issue, you either need to hold the pairs long enough to make a decent gain or select high beta stocks. Volatility in the markets produces a greater return proportional to the commission required for the pairs.


    Also, I've taken the time to read your story and I find it really inspirational. Are you trading regularly? I've put my trading endeavors on the bench as I am focusing my energy on e-business. At the moment, the stock market is far too demanding in terms of time and capital. Hopefully, once I have enough money, I can return to my pair trading investigation and craft a profitable automated trading system.
     
  16. max momo
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    max momo 20 kph Read The Millionaire Fastlane

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    Those that dismiss either Arch Crawford or the effect of planetary movements on human activity show their lack of education. Arch has been rated in the top tier of Timer Digest and Hulbert Financial Digest MULTIPLE times for his uncanny accuracy. Definitley one of the better prognosticators over the past 40 years on major market dives.

    Try some due dilligence, won't hurt.

    Although I rarely trade based on astronomy, Arch has been WAY to accurate over the years, on major market dives, not to pay some heed. Time to get defensive and SELL into this increase in equity market value over the past week IMO. The technical indicators are mixed anyway; and the markets are OFTEN emotionally driven.
     
    Last edited: Jul 10, 2010
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  18. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    Conceptually, my form of pairs trading is relatively simple: For each long position taken, initiate an equivalent short position. Overall, you should be aiming to create a portfolio of long and short positions which will produce profit as long as the long positions outperform the short positions.


    Ahh, I see the approach. It seems like a sizable amount of money would be needed to sustain profitability. Would buying or selling calls or puts perhaps help with portfolio risk or does that create problems within your system? Or is it already derivative based?


    Volatility is extremely beneficial as it creates larger movements of both long and short positions. A problem I've encountered is the effect of commissions, which significantly cut into profits. To overcome this issue, you either need to hold the pairs long enough to make a decent gain or select high beta stocks. Volatility in the markets produces a greater return proportional to the commission required for the pairs.


    In reference to commissions, have you checked into retail brokers like Tradeking, Zecco or Optionshouse? The retail brokers are getting more reasonably priced it seems.

    With my approach to volatility when using the Vix to determine time v. price, I like to couple it with which degree within a geometric angle it is trading in, meaning, if you look at my avatar, you will see that even though the index has moved into an upper trading range, which does signal higher amounts of fear/volatility, it is still only trading pretty close to horizontal which to me means that time is more prevalent than price, which is why I prefer shorter-term positions when the volatility is trading in a higher range. However, if the Vix forms ratios where price succeeds time as it did in late 08, I would then most likely be holding longer term bear swings. Something I like to keep in mind that works for me when positioning with the Vix is that it is only a near-term indicator.

    Also, I've taken the time to read your story and I find it really inspirational. Are you trading regularly? I've put my trading endeavors on the bench as I am focusing my energy on e-business. At the moment, the stock market is far too demanding in terms of time and capital. Hopefully, once I have enough money, I can return to my pair trading investigation and craft a profitable automated trading system.

    Well thank you very much. I've been through a lot and have been shot down so many times that I lost count! But it is my ultimate dream that keeps me going because I know it is possible and I believe it could be one of the greatest achievements of the 21st century. As far as trading currently is with me, I had an investor group who wanted me to trade for them but I let them go last week because they were too controlling of what was needed to make this work and they were taking way too much time to do things like have meetings, finalize an operating agreement and fund the account. When they did eventually send the check it wasn't done in the way I instructed and the broker sent it back which was the last straw for me as time keeps ticking. So, I used an active llc of mine to open an account and I funded it with half of my savings. So, I'll be back in the saddle sometime this week. Also, I know I'll be a bit rusty at first because it's been a couple months but I'm comfortable with my abilities and I do get extremely precise once I get that first week or two of screen time in.

    In reference to your last statement with automating your system, were you referring to 100% blackbox automation or semi greybox automation?
     
  19. moop
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    moop 10 kph

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    Ahh, I see the approach. It seems like a sizable amount of money would be needed to sustain profitability. Would buying or selling calls or puts perhaps help with portfolio risk or does that create problems within your system? Or is it already derivative based?

    That is correct. For initial trading capital under mid 5 figures, leverage is required.

    Although my strategy isn't based on derivatives, I have considered the possibility of using them to trade pairs. I eventually decided against using options to trade pairs as there is the added complications of time decay, volatility etc. As such, I've relied on simple leveraged long and short positions (via cfds).


    In reference to commissions, have you checked into retail brokers like Tradeking, Zecco or Optionshouse? The retail brokers are getting more reasonably priced it seems.

    The CFD brokers I've investigated offer comission rates around 0.1%. Although this is quite low, it still has a major effect on profability due to the nature of pairs trading eg:
    Long position % change: +3%
    Short position % change: -1.5%
    Comission (open and close): 0.2%
    Total profit: (1.5%/2)-0.2= +0.55%
    As you can see, a comission rate of 0.1% still has a huge effect despite the divergence between the long and short position.

    As I mentioned before, volatility helps to dilue the comission and hence improve profitability.

    With my approach to volatility when using the Vix to determine time v. price, I like to couple it with which degree within a geometric angle it is trading in, meaning, if you look at my avatar, you will see that even though the index has moved into an upper trading range, which does signal higher amounts of fear/volatility, it is still only trading pretty close to horizontal which to me means that time is more prevalent than price, which is why I prefer shorter-term positions when the volatility is trading in a higher range. However, if the Vix forms ratios where price succeeds time as it did in late 08, I would then most likely be holding longer term bear swings. Something I like to keep in mind that works for me when positioning with the Vix is that it is only a near-term indicator.

    Thanks a lot for this information. I've always kept an eye on the vix but never really given it much consideredation in trading. Perhaps you can elaborate further on analyzing the Vix.

    Well thank you very much. I've been through a lot and have been shot down so many times that I lost count! But it is my ultimate dream that keeps me going because I know it is possible and I believe it could be one of the greatest achievements of the 21st century.

    Reading about your prior business was inspirational and I commend you for already achieving major success. And as they say, failure is just a form of experience and learning which conditions us on our path to success.


    As far as trading currently is with me, I had an investor group who wanted me to trade for them but I let them go last week because they were too controlling of what was needed to make this work and they were taking way too much time to do things like have meetings, finalize an operating agreement and fund the account. When they did eventually send the check it wasn't done in the way I instructed and the broker sent it back which was the last straw for me as time keeps ticking. So, I used an active llc of mine to open an account and I funded it with half of my savings. So, I'll be back in the saddle sometime this week. Also, I know I'll be a bit rusty at first because it's been a couple months but I'm comfortable with my abilities and I do get extremely precise once I get that first week or two of screen time in.

    I can only imagine how difficult it is to manage other people's money as there is the added pressure of performance and dealing with over involved investors. Nonetheless, the ultimate dream of many traders is to develop a strong trading history and establish a trading fund. Down the track, is this what you plan on doing or are you planning to supplement other business ideas using proceeds from the stock market?

    In reference to your last statement with automating your system, were you referring to 100% blackbox automation or semi greybox automation?


    For short term trading, I would have to say 100% blackbox automation. The system would be used to quickly determine and analyze potential trades.

    For long term trading, I would plan all trades myself or perhaps utilize a semi automated system under my supervision.
     
  20. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    Thanks a lot for this information. I've always kept an eye on the vix but never really given it much consideredation in trading. Perhaps you can elaborate further on analyzing the Vix.

    Basically I use it coupled with my modified version of linear regression theory. Understanding how the index and others similar to it operate may be beneficial.

    Some background on the VIX that you or others may find interesting or helpful is that it went through a transformation in 2003 from it's original 1990ish and limited Black-Scholes model, and is now designed to better represent a fuller range of volatility. The early version used 8 near-term at the money S&P 100 calls and puts whereas the revised version uses at the money and out of the money SPX (S&P500) calls and puts. What many don't know is there is also a Nasdaq fear index the VXN and there are others for the DJIA, crude, gold, Russell 2000 and Euro.

    I can only imagine how difficult it is to manage other people's money as there is the added pressure of performance and dealing with over involved investors. Nonetheless, the ultimate dream of many traders is to develop a strong trading history and establish a trading fund. Down the track, is this what you plan on doing or are you planning to supplement other business ideas using proceeds from the stock market?

    I personally am not bothered by trading other people's money because so long as I follow my system, there is limited to no emotion. What's interesting though is that since I cut ties with that investor group, I've recently been to a few meet up groups for traders where I've actually had people from the group follow me out and want to get my number to network with me and strangely a few days ago someone else approached me with interest in me trading his money. But at this point, first and foremost, I need to get some proof back in the pudding with my trading first and once I reach a specific level, I will apply to prop trade remote with an arcade such as Echo or Bright and from a legal view, I won't be able to trade investor money with prop leverage. I was actually kicking around the idea about starting a journal in the private section here in the fastlane so that I can disclose some minor parts of my edge, whereas I haven't done that out here in the free world yet :) . But as many of us traders know from reading ET or TL or SI, we've all seen multitudes of traders journal their beliefs only to end up blown up. So there is a lot of rice paper this grasshopper has to walk across first! ...and I am aware!

    To answer your last question, when I reach certain levels with trading, I will definitely diversify into cashflow/hands-off investments. My current time period is less than 2 years with prop in less than 1.

    Thanks again for your contribution to this thread. It seems that when an OP posts too much, nobody else wants to comment!
     
  21. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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  22. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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    BP caught using altered image of command center!

    BP caught using altered image of command center - Yahoo! News

    "Normally we only use Photoshop for the typical purposes of color correction and cropping," Dean told the paper. "In this case they copied and pasted three ROV screen images in the original photo over three screens that were not running video feeds at the time."

    hmmmm.....
     
  23. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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  24. topherea
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    topherea 60 kph Read The Millionaire Fastlane Speedway Pass

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  25. Icy
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    Icy 40 kph Speedway Pass

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    Tophera how can you even say that it is "beyond coincidence"? You're merely looking for events that confirm your belief. Of course if you look for disasters that's what you'll find. I'd be willing to guarantee you a year from today I can find a bunch of 'disasters' too. It's merely you creating a belief and looking for anything to confirm it rather than truly finding out.

    I'm not going to argue about weather, full moons, and what not effecting behavior. They do. Statistically atleast. It's really bias to state anything bad happening a couple months before an event happens 'proves it' though.

    Remember, I will gaurantee you next year a bunch of 'bad events' for the economy will happen too. I'm going to say it occurs because I said it will happen. So, if anything bad happens next July, that's proof I control the economy.:smug2:
     

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