Archive for March, 2010

Waves.India - Preferred and alternate

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‘Performance cycles’ is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

ORPHEUS INDIA RESEARCH

WAVES.IND is a perspective product published on Tuesday and Thursday. The report highlights Indian Stock Market top sectoral Indices and Sensex (BSE 30) viz. BSEOIL, BSESC (Small Cap), BSEMC (Mid Cap), BSEHC (BSE Health Care), BSEPHARMA (Pharmaceuticals), BSECG (Capital Goods), BSEBANK (Banking), CNXIT (Technology), BSEFMCG (FMCG), BSEAUTO (Auto) etc.. The product also covers all the 30 Sensex components. 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.

COVERAGE: REUTERS RICS. INDICES. .BSEBANK, .BSEOIL, .NSEI, .BSECG, .BSESN, .BSEAUTO, .CNXIT, .NSEBANK, CITc1, IFc1, .NSEBANK

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Trashing the AXIOMS (Archive)

First published on 19 Mar 2007

We humans are strange beings, we love to trash what we create, wealth or peace. It’s a harsh reality. Euphemistically we might call it a new age theory, or evolution. But the reality is that psychology is calling 200 year old economic thought as junk. And guess what, Douglas McGregor (1906-1964) and Abraham Maslow (1908-1970) might just be laughing about how they might finally turn out to be the real contributors to modern economics. Mc Gregor whose work was based on Maslow’s hierarchy of human needs coined the Theory ‘X and Y’ of management. The first psychologist ever to work at MIT, talked about management styles that assumed employees to be lazy, irresponsible and with little ambition on one side and with all the good traits on the other. The good ‘Theory Y’ assumes that we humans as employees want to do a good work and create. Latest research on behavioral finance concurs with ‘Theory Y’ and call humans as nice and not selfish. The studies have even proved that the economic belief that more money is better, is not true. We humans are not motivated by more money. After a point happiness disassociates from money.

But behavioral finance does not end its recourse here. It adds that apart from being nice, we are also dumb. Putting it simply a majority of us are “penny wise and pound foolish”. If majority of us are like this that means either we love to lose the valuable pounds or the economics we have been taught is all wrong. The latter seems more reasonable as behaviorologists have also pointed out that we humans are also loss averse. We can not be loss averse and still lose, so there is definitely something wrong in the way we have been taught.

Economic axioms are not universal truths, some of them are far away from truth, it’s just that nobody questions them. The big one is the interest rate axiom. The lower the interest, the better it is. This seems logical, but it does not work. Higher the better, is what stock markets around the world suggested starting 2004. A two year yield curve for Japan, US and India exhibited similar results. India witnessed a falling interest rate scenario from 2001 till 2004, as the yields dipped from near 8 down to 4.5. This was accompanied by a sideways Sensex till 2003 hovering near 3000. Then starting 2004 when the yields took off from 2004 back to 8, the benchmark quintupled. The Nikkei doubled and Dow moved up 63%. One might say, “This was an exceptional time for global prosperity, we all know that falling interest rates are positive for stocks”. Wrong. 1929 Depression happened in a falling interest rate scenario. The theory that rising interest kill stocks, or interest rate tool has predictive value, and central bankers are economic wizards is incorrect. Ex Federal Reserve, Chairman, Alan Greenspan admitted that the ability of people to think that central bankers can avert recessions is “Puzzling” for him. Inflation and Interest rates can be controlled be a central banker, but whether they will have the desired effect on the economy is doubtful. Globally, interest rates are seen to rise and fall together and there is an inflation cyclicality much beyond local tinkering.

Economic reasoning is not always unequivocal. Is rising currency good or bad for the market? Dollar-Dow correlation oscillates from positive to negative. Correlations are never permanent. Hence giving currency strength an axiom shape is inappropriate. We can extend the same argument to Oil. “Oil price rise is not good for the economy, but this time it’s different”. Good news and bad economic news is make believe and convenient. “The same news was good yesterday, but today it has got diluted by the x factor”

Another axiom is making the ‘Buy and Hold’ strategy almost synonymous with investing. Well, if it worked for Warren Buffet, it may not necessarily work for us. Buffet started working at his Father’s brokerage in early 1940′s. This was after the depression. Buffet bought when no body was looking at stocks, so he was more of a contrarian and timer than a buy-hold investor. Ofcourse he held on to what he bought for more than a few futures trading days. These days they say, “if you don’t sell fast enough, you might hold for a long time”. Diversification is thought to be another way to mitigate risk. It is good if one understands that assets are not just stocks. And that there is a difference between real estate and cash. Understanding the subprime mortgage mess might shed some light on this. And also the fact that if you really want to emulate Buffet, we need to have cash at the bottom, not eroded stocks, waking up to the harsh reality of earnings.

Markets can fall with or without earnings. As stock prices do not track earnings. 1920-29 was a period of rapid earning growth. Real S&P composite earnings tripled over that time and real stock prices increased almost sevenfold. 1950-59, S&P composite tripled again, but this time earnings grew only 16%, over the entire decade. There are many other bull market examples where one can not illustrate the earnings logic to justify multifold increase in stock prices. The argument can be extended to explain dividends and price changes. We ask for dividend at market bottoms and not at a market top. The relationship is inverted and the reasons are half baked. They only explain us why stocks go up, not why they come down. “The come down because of global risk and they go up because of real earnings”. Yeah right!

After all the hard work, what are we left with, a portfolio in a local currency. How competitive is the local currency anyway? How convertible? Are we in a country, which only sees currency strengthening. Or does our central banker appease us with a managed float or a target zone currency management jargon. If we become richer every year, as the local paper strengthens, then the local exports may flounder. The companies we buy on the stock market might be thrown out of business, just because we can afford a longer vacation in Europe. Richer in a quarter and poorer the next is all what currency plays are all about. Cross border mergers are a reality, we pay and convert from our pocket when we bid for companies around the world. Individually we may not have a currency risk, but the stock we buy is in the heat of things. We wish currency crisis stays next door, but it is happening, every day. Ask a currency trader, it was never trickier.

Hence, the real currency is not the local paper, but Gold, at least it’s traded internationally, is an alternate for money and plus it’s rising. And if we hit a crisis, euro becoming the same as dollar or dollar becoming half as much as euro, or yen strengthening back to 80, we are left with only a few risk management strategies. One of them is Gold. So how rich is our Sensex portfolio in terms of Gold? If the real money was Gold, then the Sensex portfolio is the same as it was in 2000. Real money has moved on and Sensex is still back at the seven year historical high. We are not as rich as we think we are.

Economics that we know can not help us survive, leave aside making money. Market is not a conventionl model. Bull markets have their own geniuses, sucessful corporations and stories, which disappear as the trend changes. We are a historical juncture once again, this time it is bigger. How far will new information and extraneous reasons help us remains to be seen. But what definitely cannot help us is the X in the axiom.


Channels.India - Mid economic performance cycles

BHEL DAILY (BHEL) Prices are still in a complex corrective structure up which should complete soon. Key resistance levels lie at 2,470-2,500. Performance cycles continue to suggest further underperformance of Bhel in the weeks ahead. LARSEN DAILY (LART) Anticipated and happened Prices continued to push higher till key resistances at 1,700 levels as anticipated. We need a clear break above respective levels for a positive confirmation.

To access member’s area or Orpheus estore click here.

‘Performance cycles’ is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

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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Alpha.Metals - long silver, short gold up 9%, running

We talked about the Silver outperformance first time on 22 Feb. The silver pairs are still running against Copper, Platinum, AIGP (precious metals index) with marginal gains. However what is interesting to point out is that long silver, short gold is already up 9% (annualized 93%) since then. If this might look as a coincidence, the pair diverged 14% (annualized 35%) from 8 Sep 2009 till 22 Feb 2010. The long silver, short gold silver is still running. The latest Alpha Metals carries numeric ranking, numeric ranking changes, performance cycles and running pair signals.

Strategy Update

Numeric Ranking

ALPHA is a pair trading, long only - short only strategy and numeric ranking product based on TIME fractals. Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. The signals are carried over three different time frames viz. sub minor (2-3 days), minor (10-30 days) and intermediate (above 30 days). This is a daily signal product. The signals will be illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

METALS: STEEL, ZINC, NICKEL, TIN, ALUMINIUM, URANIUM, GOLD, SILVER, LEAD

STOP LOSS AND EXITS are activated at 4%

Please feel free to mail us for any clarifications. *This is a strategy product. Long Short strategies are not riskless strategies. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the ORPHEUS TIME ANALYTICS research products.

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Gold - Silver Ratio (Archive)

First published on 13 Nov 2006

Did you know that the price relationship between Gold and Silver is not fixed? It varies substantially. And it has predictive value too. As in different market environments, the value of Gold is perceived differently than Silver. Gold is perceived as an important crisis commodity. As fear replaces confidence, Gold increases in value relative to Silver. For example risks of economic and political upheaval. When the market risks are low Silver is preferred over Gold, as the white metal has many industrial uses and the consumption of Silver grows in a rising economy.

The last time the value for the ratio dipped below 1 was in 1997 and then the South East Asian crisis broke leading to a bounce back in ratio. And since 1984 the ratio has never been below parity. At this stage after 22 years the ratio is headed down below 1 again. Rather it is now ruling at sub 1 level. Now there are two ways to see it, one that we are in for more prosper times that we have not witnessed since 1984. If this is true Gold should continue to fall relatively to silver, or underperform silver. Second way to look at it is that we are once again sitting at the edge of a crisis, which might be just around the corner. At this stage, we have a falling five wave ratio line. This means that there is no fear in the market and hence this maybe not an opportune time to go long on the crisis commodity yet.

Our alternate count on Silver saw the metal moving up to fill the anticipate gap level at 12.6. Our back up count on Gold also saw it touching anticipated levels. However, we still believe that Metals overall continue to move against a price overhang. Above 640 many things change for our Gold count. At this stage we anticipate resistances ahead for Gold, Silver, MCX – Gold Near, HUI – Gold Bugs, NEM Newmont Mining Corp, GFI Gold Fields Limited and XAU – Gold and Silver Index, at 640, 13.2, 9300, 340, 47.4, 18 and 144 respectively.


Revisiting CYCLE II lows n the end of the world

This is what we said on 28 Oct 2008,

“A cycle is action and reaction. And if you really think a 90% collapse is exceptional, think again, CYCLE II waves are known for their 90% collapses. In other words markets retrace most of the gains of the previous CYCLE I. After which the CYCLE III starts. We continue to look at OCT lows making multiple month entry points, with possible bounce backs, 100% and more from where the feeling of the “End of the world” is the greatest. Don’t get fooled, the world is not ending, and neither is the BVB closing down. Have courage to accumulate the value stories here. We still believe in BRD, TEL, TGN”

Read more…

The illustration on the left is the what we anticipated and what happened. Orpheus accuracy is about catching such large moves and not just week over week or intra day.

Now that prices have retraced more than 50% of the crisis drop, we are still again alone suggesting that prices could top here and markets need more caution than aggression. Our fellow internet bloggers are confirming our view already questioning “what happened to the March reversal” and the 50% drop. Well we never claimed to give 100% accuracy, what we can tell you is what we can see, time for distribution not accumulation.

Enjoy the latest WAVES.ROM

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.

Performance cycles is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves in a range say from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

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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Waves.India - The intermediate corrective leg up

We have been illustrating an alternate positive scenario for a while now, saying that prices could push up to new highs in another corrective intermediate (Z) leg up.

Prices are now retesting previous highs and the alternate scenario strengthens with every daily rise. However, traders should not get too excited about the breaking of previous intermediate highs, as the overall structure still looks exhausting. RSI momentum also suggests an overbought situation and a marginal rise.

Our latest Waves.India report carries intermediate and minor perspectives on the major stock indices and potential price targets in case previous highs are broken. The overall intermediate view remains up but topping.

Enjoy the latest Waves.India.

Login for orpheus.asia member’s area here.

‘Performance cycles’ is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

ORPHEUS INDIA RESEARCH

WAVES.IND is a perspective product published on Tuesday and Thursday. The report highlights Indian Stock Market top sectoral Indices and Sensex (BSE 30) viz. BSEOIL, BSESC (Small Cap), BSEMC (Mid Cap), BSEHC (BSE Health Care), BSEPHARMA (Pharmaceuticals), BSECG (Capital Goods), BSEBANK (Banking), CNXIT (Technology), BSEFMCG (FMCG), BSEAUTO (Auto) etc.. The product also covers all the 30 Sensex components. 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.

COVERAGE: REUTERS RICS. INDICES. .BSEBANK, .BSEOIL, .NSEI, .BSECG, .BSESN, .BSEAUTO, .CNXIT, .NSEBANK, CITc1, IFc1, .NSEBANK

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Channels.BVB - Early Economic Update - Moving Average

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CHANNELS.BVB is our second perspective product published on MONDAY, WEDNESDAY AND FRIDAY. The report uses conventional technical tools and focuses on stocks more than Indices. The report illustrates key price levels, price targets, price projections and time turn windows. WAVES.ROM and CHANNELS.ROM are bundled together as PERSPECTIVE products. Unlike WAVES which focuses more on blue chips, CHANNELS covers just BVB stocks all mid cap and small cap.

CHANNELS.BVB on MONDAY covers the Early Economic Sector cycle including Financials and Discretionary sector stocks. REUTERS RIC - (BATR.BX, BRDX.BX, BRKU.BX, SIF1.BX, SIF2.BX, SIF3.BX, SIF4.BX, SIF5.BX, BCCA.BX, ASAG.BX, FLAA.BX, EFOR.BX, TUFE.BX, SIPA.BX, ELBU.BX, ERST.BX, IMPT.BX)

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Alpha.Romania – CMP pair delivers 23% in three weeks

On 8 of March we said that “CMP and BRK are in for outperformance against BETXT” and started the pairs. Three weeks later we have CMP and BRK pairs up 23% and 14%. Long SNP- Short BETXT pair is up 6% since last week reaching 16% performance. We also mentioned the anticipated reversals on financials TLV and BRD against BETXT. This week, we initiate Long BRD – Short BETXT and are expecting TLV-BETXT reversal to happen mid week. There were other anticipated and happened cases. ALR pair held up and is up 4%, week over week. BIO – BETXT also started to deliver.

On the negative side, despite the pharmaceutical sector outperformance ATB-BETXT hit a stop loss. We will closely monitor the pair for any re-initiation signals. On the long only, short only side we have no short signals yet. The latest ALPHA.ROM carries the latest numeric Ranking, numeric ranking changes, long only – short only signals, running pair performance signals, performance and pair cycles and strategy updates. TGN, TEL are the top ranked stocks while DOW, BRD, TLV the worst. Enjoy the latest ALPHA.ROM.

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Numeric Ranking

Performance Cycles I

Performance Cycles - II

Alpha is a pair trading, long only - short only strategy and numeric ranking product based on TIME fractals. Time arbitrage, Time Triads, Time fractals are terms coined by Orpheus Research. The signals are carried over three different time frames viz. sub minor (2-3 days), minor (10-30 days) and intermediate (above 30 days). This is a daily signal product. The signals will be illustrated through tracker and running portfolios. Alpha can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades. This is a part of the time triads analytics developed by Orpheus Research.

Performance cycles is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves in a range say from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

Time Arbitrage portfolio legs should be risk weighted before any implementation.

Coverage: BETXT, BETXT components, SIF5 Futures, DOW Jones

Stop loss and Exits are activated at 4%

Please feel free to mail us for any clarifications. *This is a strategy product. Long Short strategies are not riskless strategies. Please mail us for a detailed working or consult a local financial risk manager to execute these pairs. For more details please subscribe to the ORPHEUS TIME ANALYTICS research products.

To login to the member’s area or access Orpheus estore click here.

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Channels.India - HDBK. Anticipated and happened

ICICI BANK DAILY Prices are retesting previous highs. A clear break here would confirm our alternate positive scenario. Performance cycles are also bottoming. HDFC BANK DAILY Anticipated and happened Prices break previous highs at key 1,850 levels as anticipated.

To access member’s area or Orpheus estore click here.

‘Performance cycles’ is a term coined by Orpheus Capitals. This is another name for time triads, time arbitrage, time fractals but expressed in terms of relative performance. It’s a bounded oscillator that moves from 1 to 30. 1 is top relative performance and 30 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick.

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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