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Dispassion

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  1. Mike Shedlock has posted some futures data for US House Prices, predicting a trough in Q4 2010, wiping 8 years off house price rises, with a 36% fall from the peak. http://globaleconomicanalysis.blogspot.com...9-analysis.html
  2. interesting article, in which John Dizard argues that gold is going below $800 over the next few months: http://www.ft.com/cms/s/0/b8d36560-21b1-11...144feabdc0.html
  3. I was referring to a reference on fib ratios in markets before 1900's. The link you give says that Gartly was pretty much at exaclty the same time to Gann and Elliot: I don't doubt the occurance of Fib ratios in modern liquid markets. Only the application of them to less sophisticated markets where they don't have widepread intentional use by the market participants, such as the housing market.
  4. Yeah, I see your point, it's a bit of a chicken and the egg situation. Perhaps, some of it's psychological, but the rest is self-fulfilling prophecy. Whether the early momentum came from ill-founded notions or not, they work because other people use them. I use TA for liquid markets, but my opinion is that only the most naive TA is relevant to the housing market.
  5. Gann published in 1935 and was active in market trading circles in 1909. Elliot published in 1938, his theory uses fibonacci ratios.
  6. I see a big difference in the strategies used by stock investors and property investors. A large percentage of money on stocks is invested by people who use fib retracement, but virtually no money from property investors uses it. It works as a self-fulfulling prophecy, but only if the message is widespread enough. The only fib level that I can see having any significant impact in the housing market is 50%. I'll look into the history of fib ratios, because I can't see that they'd have an impact before they were widely used.
  7. For me, fibonacci retracement only works if enough people use it, which is why we see them in liquid markets which are dominated by sophisticated traders. Do you mean that there's something inherently psychological about these retracement levels?
  8. I don't see the housing market as that technical. The vast majority of homeowners have never even heard of fibonacci retracement. It's all about sentiment and mortgage availability. I think we'll be comfortable that we've seen the bottom in stocks and the peak in unemployment before we the housing market has bottomed out.
  9. The derivitives market on UK residential property is predicting: 38% peak to trough in Q4 2010 (spreadfair) 42% peak to trough in Q4 2011 (tradition) Spreadfair closed this market so the data's a few months old. The tradition trough has shallowed from 45% a month earlier. It's coarse data, but the liquid market doesn't see this as the bottom. It's a market that could be skewed by hedging against over exposure to property and we've no reason to believe that it's any more efficient than any other market. For me, it's the best predictor we've got and conveniently matches where my rationale would seem to lead me. I expect to see relatively flat house prices for about year at the trough, so I see no reason to rush in. Is the conference call recording available?
  10. Oil is plummeting fast, it remains well correlated Euro/Dollar, commodities and gold. I'm increasingly certain, that it's the Oil Producer's Cartel that hold the key to direction of gold. A bottom in oil is a critical point for all markets in my opinion. These collapsing commodity and stock prices indicate a serious lack of faith in reflation, if the banks don't reflate company prices soon then I think we're going to see some serious public sector action in Europe, including nationalisation, but I don't see this happening in the US.
  11. The correlation between the gold/dollar with euro/dollar and oil/dollar have been resumed over the last 2 weeks. I'm not sure that we'll see a turn around in gold until we see a turn around in oil.
  12. "This time next year we'll be millionaires"?
  13. I'm interested in how it's deeper than I think or if anything in my statements about TA can be invalidated, but I can't go with the analogy. I could add an element of numerology to my portfolio planning and use the same comparison. I love TA charts, because I love data, but if my first statement about TA holds how can I know if my TA is good TA or bad TA?
  14. I love Ker's charts, I'm a dataholic, but since we're on the subject of TA I'd like to offer my view on it's usefulness, partly cautionary for anyone who would put too much faith in it and partly because if I'm wrong I really want to know about it. 1. TA is like paper scissors stone (rochambeau), if you invest at a random time, then you're as likely to profit as lose from market timing, hence the average use of market timing must be zero and if there is merit to market timing strategies then it must be to the detriment of other market timing strategies. 2. If TA is compleltely ineffective, we'd expect a normal (gaussian) distribution of the performance of individual strategies, only distortions to the distribution indicate beneficial or detrimental stratgies. 3. We can place an upper limit on the maximum value added by TA, based on the number of people who are known for amassing wealth from TA. eg. 1% profit per trade would turn 10,000 into 10,000,000 within 695 trades. So, for example, a stratgey producing a profitable trade of 1% every 5 days for 10 years must be very rare. 4. If the trade is motivated by TA, the average gain must be in excess of the trading fee to be profitable. 5. If TA is used to add value to an otherwise motivated trade then the requirement that it's profitable is removed along with the need for the gain to exceed the trading fee, hence widespread use of TA doesn't demonstrate profitability. any comments gratefully recieved.
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