Archive for May, 2009

CHANNELS.INDIA - EARLY ECONOMIC UPDATE

CHANNELS.IND.010609

SUMMARY: HOUSING DEVELOPMENT FINANCE CORPORATION WEEKLY (HDFC): Key resistance levels lie at 2,600. Prices continue to hold above weekly open gap levels. HDFC BANK WEEKLY (HDBK): Prices continue to hold below key resistance levels at 1,600. Moving average crossover is still positive. ICICI BANK DAILY (ICBK): ANTICIPATED AND HAPPENED The c/iii wave up seems to be completing near key resistance levels at 780. STATE BANK OF INDIA DAILY (SBI): Prices seem to be heading to key resistance levels at 1,920. We expect the C/3 wave up to complete near respective levels. INFOSYS WEEKLY (INFY): Moving average crossover is still positive. Key resistance levels lie at 1,890. TATA CONSULTANCY SERVICES WEEKLY (TCS): Moving average crossover is still positive. Key resistance levels lie near psychological 700. MAHINDRA WEEKLY (MAHM): Key resistance levels lie at psychological 700. UNITECH WEEKLY (UNTE): Key levels lie at psychological 80. TITAN INDUSTRIES WEEKLY (TITN): Moving average crossover has turned positive.

CHANNELS.INDIA is our second perspective product published on MONDAY, WEDNESDAY and FRIDAY. The report uses conventional technical tools and covers most top traded stocks. The report illustrates key price levels, price targets, price projections and time turn windows. WAVES.INDIA, CHANNELS.INDIA are bundled together as PERSPECTIVE products. Unlike WAVES which focuses more on blue chips, CHANNELS covers the other mid cap and small cap stocks also. CHANNELS.INDIA carries the Early Economic cycle sector components, which includes FINANCIAL and DISCRETIONARY sector stocks, the Mid Economics cycles sector which includes INDUSTRIAL sector stocks and the Late Economic Sector cycle including ENERGY, STAPLES, UTILITIES, PHARMA, CHEMICALS sector stocks. REUTERS EARLY ECONOMIC RICS DLF.NS, HDFC.NS, HDBK.NS, ICBK.NS, SBI.NS, INFY.NS, TCS.NS, MAHM.NS, UNTE.NS, TITN.NS REUTERS MID ECONOMIC RICS ASOK.NS, TAMO.NS, CROM.NS, BHEL.NS, LART.NS, MTNL.NS, IDEA.NS, BRTI.NS, RLCM.NS, TATA.NS REUTERS LATE ECONOMIC RICS ONGC.NS, RLIN.NS, NTPC.NS, ACC.NS, HALC.NS, TISC.NS, ABUJ.NS, CIPL.NS, RANB.NS, ITC.NS

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The TIME Translation

Extending time fractals to explain the transformation of the bell curve into the Pareto principle reconciles the 150 year efficient and inefficient market debate.

Robert Brown, a Scottish botanist observed the random Brownian motion nearly 250 years back. Nearly the same time Carl Gauss, also known as the Princeps mathematicorum (prince of mathematicians) created the bell curve. After 100 years Louis Bachelier connected these two great works by pioneering the study of financial mathematics and stochastic processes. Bachelier also referred to as the father of modern finance inspired the efficient school.

In a similar time frame Vilfred Pareto with his Pareto distribution started the work on fractional Brownian motion. One can easily generate a random sample from Pareto distribution. Bachelier and Pareto were on two sides of the Brownian randomness. What started from Robert Brown split into the efficient and inefficient school of thought.

Read more…

http://timetriads.com/article/256


The TIME Translation

Extending time fractals to explain the transformation of the bell curve into the Pareto principle reconciles the 150 year efficient and inefficient market debate.

Robert Brown, a Scottish botanist observed the random Brownian motion nearly 250 years back. Nearly the same time Carl Gauss, also known as the Princeps mathematicorum (prince of mathematicians) created the bell curve. After 100 years Louis Bachelier connected these two great works by pioneering the study of financial mathematics and stochastic processes. Bachelier also referred to as the father of modern finance inspired the efficient school.

In a similar time frame Vilfred Pareto with his Pareto distribution started the work on fractional Brownian motion. One can easily generate a random sample from Pareto distribution. Bachelier and Pareto were on two sides of the Brownian randomness. What started from Robert Brown split into the efficient and inefficient school of thought.

Efficient school of thought was the bell curve believers who were more concentrated just like Mandelbrot’s clusters. Harry Markowitz, William Sharpe, Fischer Black, Myron Sholes, Eugene Fama etc. are a few of the efficient market theorists. The moment you start watching behavioral patterns, market patterns or fractals, start making S curve forecasts, talk about proportionality and the law of large numbers you are no more an efficient theorist focusing on mean, average, linearity and continuity. The Pareto rule drove the inefficient school of thought. It was widely distributed, de-clustered, characteristically proportional like the underlying law. Mandelbrot might feel uneasy in the way I respectfully group him with the other luminaries like Thomas Malthus, Pierre François Verhulst, Charles Dow, Kingsley Zipf, Ralph N. Elliott, Robert Prechter, Daniel Kahneman and Robert Shiller but the truth is that the father of fractals is a part of the pattern, fractal, anomaly, inefficiency watchers.

Did the inefficient school go too far in challenging the efficient model? A flapping butterfly causing a tornado in Texas seems like an exciting story, but how solid is the mathematics? Just because we see anomalies from normal, more volatility and extreme fluctuations, does the subject of value and calculus suddenly get trashed? Just because efficient theorists have failed to challenge the academic attacks, do all their work with CAPM model, beta, option pricing become worthless? Well if you look at it from Mandelbrot’s view, “pattern watchers are naive, bell curve is nonsense and conventional finance is based on unrealistic assumptions”.

Efficient theorists had a long running success. The inefficiency school can be given a benefit of doubt as they were not really noticed and were marginalized (compared to the efficient school) for a century. Now that the tide has turned and theories stand challenged, I would still think twice before calling conventional finance junk and Euclidean geometry as a redundant linear mathematics. Efficiency and inefficiency are thought to be two extremes that there could not be anything more sacrilegious in the academic world than trying to bridge the two disparate schools of thought.

Last time we talked about fluctuations, pulse and life in time rather than price or nature. We tried to make a case for a dynamic and proportional time that has a pattern. The movement of time we are talking about is called translation. This is different from the popular Google translate and should be one of the few reference of its kind on the world wide web, like some other of our ideas like time triads, time fractals, Econohistory etc..

The time triads we illustrated last time are made of hierarchy of Euclidean equilateral triangles. If time was static, all triangles (triads) in the set would be equilateral. Mathematically the time between two bases of a triangle is rarely equal. This is because the larger degree time (the higher amplitude triangle) pushes the underlying smaller time (triangle) causing it to translate, move or shift. This self feeding change creates an imbalance pushing time ahead. Real markets are full of such cases, when one period between two lows of a time triangle is not the same as the period in the other base (A<B>C). This is one reason why an average 3.3 business cycles vary from 3 to 5 years. Though the average periodicity holds, it’s irregular. This irregularity kept mathematicians away from time and this might be the reason Mandelbrot talks about contracting, expanding, flexible, speeding, slowing time. He might be simply talking about the moving and translating triads. Fractals are caused by time translation. There are other reasons linked with the human tendency of looking for average returns, looking for order etc. why time did not get the attention.

Mandelbrot’s asks a very similar question like Edward R Dewey asked 70 years back. Why do cycle repeat? Why do price and natural fractal exist everywhere? There are similar questions. Why do history, time, price, human mind, water claim to have memory? Is it not the memory associated with time?

The triads on one side demonstrate a clear power law behavior 9X, 3X, X, X/3, X/9, larger size lower frequency (if there is one cycle of 9X period), lower size-larger frequency (there are 81, X/9 cycles) and on the other side triads suggest why a bell curve might be the idealized form and the power law curve a translated form. Moving and translating caused more distortions from the idealized bell curve and created the power law curve. This means that all the inefficiency, anomalies, fluctuations were never a separate set but part of the universal time fractal set.

Time translation explains why nature is similar not equal (same)? Why there are more curves in nature than straight lines? Why we see order in randomness and randomness in order? Why chaos is not about disorder but about different time frequencies interacting through nature? Why moving time is CHANGE? Why risk perception is not about price but time polarity? Why time arbitrage will take over statistical arbitrage as the next investment strategy? Why dumping pattern watchers might be the biggest mistake in research? They just might be holding the truth.

In conclusion, it was never about rationality or irrationality. Time translation, time fractals may take time to be understood and be accepted, not because it is too complex, but because the idea is too simple. While working on some random operations Mandelbrot and James R Wallis produced some records which all appeared to display a long, slow up down cycle of three. Upon these long waves, smaller and more numerous cycles seemed to interpolate themselves. When they looked at small section of the record, they again saw three waves, each a third shorter than the section. Now these are some time triads Mandelbrot would find it tough to call static. The TIME was alive and TRANSLATING.

timetriads300509

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USDRON. READY TO PUSH HIGHER

 

ORPHEUS GLOBAL RESEARCH

WAVES.FOREX - WAVES.FOREX is a perspective product published  TUE and THU. The report highlights the top traded FOREX PAIRS (e.g. Euro, Dollar, Yen, Indian Rupee, Romanian Lei, Swiss Franc and Dollar Index) The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.

REUTER RICS: EURRON=, RON=, JPY=, INR=, HUF=, HRK=, GBP=, EURCHF=, CHFRON=, CAD=, =USD, EUR=

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CHANNELS.INDIA LATE ECONOMIC UPDATE

CHANNELS.IND.290509

SUMMARY: OIL AND NATURAL GAS WEEKLY (ONGC): Prices are at key resistance levels near 1,125. RELIANCE ENERGY WEEKLY (RLIN): Key resistance levels lie at psychological 1,500. AMBUJA DAILY (ABUJ): Moving average crossover is positive. Key resistance levels lie at psychological 100. ACC DAILY (ACC): ANTICIPATED AND HAPPENED. Daily KEY REVERSAL bar suggests further retracement. Below key 730 levels we get more negative confirmation. HAPPENED. HINDALCO WEEKLY (HALC): Moving average crossover is still positive. Key resistance levels lie at 94. TISCO DAILY (TISC): Non-conforming RSI continues to suggest an exhausting upmove. Key resistance levels lie at 420-480. RANBAXY DAILY (RANB): ANTICIPATED AND HAPPENED. Prices pushed higher in the C/3 wave up till key resistance levels at 283. ITC DAILY (ITC): The DOUBLE TOP pattern is till valid. Below key 182 levels we get more negative confirmation.

CHANNELS.INDIA is our second perspective product published on MONDAY, WEDNESDAY and FRIDAY. The report uses conventional technical tools and covers most top traded stocks. The report illustrates key price levels, price targets, price projections and time turn windows. WAVES.INDIA, CHANNELS.INDIA are bundled together as PERSPECTIVE products. Unlike WAVES which focuses more on blue chips, CHANNELS covers the other mid cap and small cap stocks also. CHANNELS.INDIA carries the Early Economic cycle sector components, which includes FINANCIAL and DISCRETIONARY sector stocks, the Mid Economics cycles sector which includes INDUSTRIAL sector stocks and the Late Economic Sector cycle including ENERGY, STAPLES, UTILITIES, PHARMA, CHEMICALS sector stocks. REUTERS EARLY ECONOMIC RICS DLF.NS, HDFC.NS, HDBK.NS, ICBK.NS, SBI.NS, INFY.NS, TCS.NS, MAHM.NS, UNTE.NS, TITN.NS REUTERS MID ECONOMIC RICS ASOK.NS, TAMO.NS, CROM.NS, BHEL.NS, LART.NS, MTNL.NS, IDEA.NS, BRTI.NS, RLCM.NS, TATA.NS REUTERS LATE ECONOMIC RICS ONGC.NS, RLIN.NS, NTPC.NS, ACC.NS, HALC.NS, TISC.NS, ABUJ.NS, CIPL.NS, RANB.NS, ITC.NS

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THE 30 YEAR DOW CYCLE


The primary cycle has turned UP (PRIMARY CYCLE SHOCKS - INTERMARKET CYCLES), primary bottoms are rarely V shaped and can be retested or sizeable retraced. So prices should be turning down and bottoming soon and not killing time at this juncture. Second, in the 30 year JUGLAR cycle (SLIDE1) we are running the last 10 year cycle. There is a large primary (more than 9 month) rise pending before that markets fall back into the 2011-2012 lows. The more we stagnate and fail to take out pending negativity fast out of the system, the more markets eat into potential bullish reprieves.

On the intermediate degree, DOW has pushed up 6% since we wrote about the GOOD, BAD and UGLY (24 MAR) situation at DOW and how the best two weeks since 1938 did not mean much. Now that 2 months have passed and we are heading into JUN, our UP BUT TOPPING view is getting a bit time constrained. Failure to fall after the time cycles has turned down suggests two aspects. One that prices are strong and are consolidating (continuing) and getting ready to overrule ongoing negative time cyclicality and push up further and primary cycle bottom might indeed be a V this time. Second, time translation (extended up, and fast down move) suggests that prices are just trying their last bit of strength and to catch up with time they will have to fall fast and sharp soon. At this stage we have little reason to believe that markets are consolidating for a larger bout of strength. We think markets are just translating in time and the fall ahead is going to be dramatic.

A few more reasons. Real strengths come from IMPULSIVE (motive and five wave moves) and not CORRECTIVE (counter trend overlapping structures). It is tough to label the current move up on DOW as impulsive, it is more corrective (W-X-Y) (SLIDE 4). Therefore even if the prices don’t fall immediately, the move up should be painful and choppy like it has been till now with more resistance coming in at higher levels. The real strong upmove may not happen till the second week of JUN. Above this small Harami Star on DOW (SLIDE 2), KEY FIB resistances on S&P and NIKKEI (SIDE 4,10), intermediate TIME CYCLE topping on SSEC (SLIDE 5), all time monthly gapping moves on SENSEX and gaps on N225 (SLIDE 9,10), Intermediate channel break down on DAX (SLIDE 6) still suggest caution rather than sustained positivity.

Though low probability above 8,500 prices could wriggle up to 9,000, but then as we said the move down should be fast. Only sub 8,200 do we move from UP BUT TOPPING to DOWN.

Enjoy the latest WAVES.GLOBAL.

WAVES.GLOBAL is a perspective product published on Monday. The report highlights top GLOBAL indices and emerging market indices viz. Dow Jones Industrial (.DJI), S&P 500 (.GSPC), German DAX (.GDAXI), Russian IRTS (.IRTS), Shanghai Composite (.SSEC), Nikkei 225 (.N225), Brazil BOVESPA (.BVSP), Indian Sensex (.BSESN). The product covers all the DOW 30 stocks. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers and market trends.

REUTERS RICS: .BVSP, .IRTS, .FCHI, .GDAXI, .GSPC, .DJI, .N225, .SSEC

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WAVES.ROM - UPDATE

WAVES.ROM.280509

WAVES.ROM is a perspective product published on TUESDAY’S and THURSDAY’S. The report highlights Romanian Stock Market top three Equity Indices viz. the top ten blue chip BET Index (.BETI), BET Composite (.BETC), the Financial Index BETFI (.BETFI) and the local currency RON (EURRON=, RON=). The products covers the top ten BET component stocks. (ROMP.BX, SNPP.BX, BATR.BX, BRDX.BX, TSEL.BX, ATBE.BX, BRKU.BX, BIOF.BX, IMPT.BX, TUBU.BX) and all the components of BETFI Financial Index(SIF2.BX, SIF5.BX, SIF3.BX, SIF1.BX, SIF4.BX) are covered in the report. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers. WAVES.ROM, CHANNELS.BVB and CHANNELS.RASDAQ are bundled together as PERSPECTIVE products. Unlike WAVES which focuses more on blue chips, CHANNELS covers all the BVB and RASDAQ stocks.

REUTERS COVERAGE .BETFI, TUBU.BX, TSEL.BX, SNPP.BX, SIF5.BX, SIF4.BX, SIF3.BX, SIF2.BX, SIF1.BX, ROMP.BX, IMPT.BX, BRKU.BX, BRDX.BX, BIOF.BX, BATR.BX, ATBE.BX

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CHANNELS.INDIA - MID ECONOMIC UPDATE

SUMMARY: IDEA DAILY (IDEA). KEY REVERSAL bars continue to suggest further retracement from here. Key levels lie at 67. BHARTI WEEKLY (BRTI). Prices continue to hold key resistance levels at psychological 1,000 as anticipated. KEY REVERSAL bars suggests further downmove. RELIANCE WEEKLY (RLCM). KEY REVERSAL bar confirms our TOPPING view. Key levels lie at 250. MAHANAGAR TELEPHONE NIGAM DAILY (MTNL). The C/3 wave up could be further extending till key 110 levels. TATA MOTORS WEEKLY (TAMO). KEY REVERSAL bar and over reactive RSI suggest a TOPPING near current levels. ASHOK DAILY (ASOK). Prices turned back from key resistance levels at 32. A clear break below key 25 levels (key FIB and true trendline supports) would be our first reversal sign. CROMPTON WEEKLY (CROM). Over reactive momentum and weekly gap suggest that the current upmove is exhausting. BHARAT HEAVY DAILY (BHEL). Moving average crossover is still positive. Key levels lie at psychological 2,000. LARSEN WEEKLY (LART). Prices continue to hold key resistance levels near psychological 1,500. RELIANCE DAILY (RELI). Prices continue to hold above key FIB levels at 2,100. Moving average crossover is still positive.

CHANNELS.INDIA is our second perspective product published on MONDAY, WEDNESDAY and FRIDAY. The report uses conventional technical tools and covers most top traded stocks. The report illustrates key price levels, price targets, price projections and time turn windows. WAVES.INDIA, CHANNELS.INDIA are bundled together as PERSPECTIVE products. Unlike WAVES which focuses more on blue chips, CHANNELS covers the other mid cap and small cap stocks also. CHANNELS.INDIA carries the Early Economic cycle sector components, which includes FINANCIAL and DISCRETIONARY sector stocks, the Mid Economics cycles sector which includes INDUSTRIAL sector stocks and the Late Economic Sector cycle including ENERGY, STAPLES, UTILITIES, PHARMA, CHEMICALS sector stocks. REUTERS EARLY ECONOMIC RICS DLF.NS, HDFC.NS, HDBK.NS, ICBK.NS, SBI.NS, INFY.NS, TCS.NS, MAHM.NS, UNTE.NS, TITN.NS REUTERS MID ECONOMIC RICS ASOK.NS, TAMO.NS, CROM.NS, BHEL.NS, LART.NS, MTNL.NS, IDEA.NS, BRTI.NS, RLCM.NS, TATA.NS REUTERS LATE ECONOMIC RICS ONGC.NS, RLIN.NS, NTPC.NS, ACC.NS, HALC.NS, TISC.NS, ABUJ.NS, CIPL.NS, RANB.NS, ITC.NS

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WAVES.FOREX - UPDATE

Enjoy the latest WAVES.FOREX.

WAVES.FOREX - WAVES.FOREX is a perspective product published TUE and THU. The report highlights the top traded FOREX PAIRS (e.g. Euro, Dollar, Yen, Indian Rupee, Romanian Lei, Swiss Franc and Dollar Index) The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools and sentiment indicators.

REUTER RICS: EURRON=, RON=, JPY=, INR=, HUF=, HRK=, GBP=, EURCHF=, CHFRON=, CAD=, =USD, EUR=

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WAVES.ROM - UPDATE

WAVES.ROM.260509

WAVES.ROM is a perspective product published on TUESDAY’S and THURSDAY’S. The report highlights Romanian Stock Market top three Equity Indices viz. the top ten blue chip BET Index (.BETI), BET Composite (.BETC), the Financial Index BETFI (.BETFI) and the local currency RON (EURRON=, RON=). The products covers the top ten BET component stocks. (ROMP.BX, SNPP.BX, BATR.BX, BRDX.BX, TSEL.BX, ATBE.BX, BRKU.BX, BIOF.BX, IMPT.BX, TUBU.BX) and all the components of BETFI Financial Index(SIF2.BX, SIF5.BX, SIF3.BX, SIF1.BX, SIF4.BX) are covered in the report. The product highlights Primary (Multi Month) and Intermediate (Multi Week) price trends. The report illustrates key price levels, price targets, price projections and time turn windows. The product uses Elliott waves, traditional technical analysis tools, sentiment indicators and other alternative research tools like INTERMARKET to spot outperformers. WAVES.ROM, CHANNELS.BVB and CHANNELS.RASDAQ are bundled together as PERSPECTIVE products. Unlike WAVES which focuses more on blue chips, CHANNELS covers all the BVB and RASDAQ stocks.

REUTERS COVERAGE .BETFI, TUBU.BX, TSEL.BX, SNPP.BX, SIF5.BX, SIF4.BX, SIF3.BX, SIF2.BX, SIF1.BX, ROMP.BX, IMPT.BX, BRKU.BX, BRDX.BX, BIOF.BX, BATR.BX, ATBE.BX

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