Archive for December 6th, 2010

Alpha.Forex - EURUSD gets ready for the iii of 3

Third of third waves are the fastest. Now that the intermediate multi week trendline supports are clearly broken, one should get ready for the third of third. Sub 1.35 we continue to look lower with first targets down till 1.25 and then potentially lower till Jun lows.

Enjoy the latest Alpha Forex.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are 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.
Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. 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.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are 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.
Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. 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.


The Information Wisdom

When Tim Flanagan jokes about assassinating Julian Assange on prime time tv, it not only comes across as a bad joke but also suggests the importance the Calgary Professor gives to insider information.
Stock markets have addressed the insider information decades back, judgments have already been passed (Jamie Olis reduced sentence in 2006) and even behavioral finance suggests that informed investors could be biased.
Information in its raw form has already lost a lot of premium since Reuters was transferring messges between Brussels and Aachen using carrier pigeons. The new age has moved ahead from raw information to interpretation to compression and visualization.
David McCandless work in progress on beautiful information suggests a hierarchy of visual understanding. It is like the Maslow’s hierarchy with data (words, numbers, code, tables, and databases) at the base. This is followed by information (sentences, paragraphs, equations, concepts, idea, questions, and simple stories) where the insider comes in, which McCandless labels as linked information. After this comes knowledge, organized information and concepts. This is concluded by the peak as in wisdom with applied knowledge, axioms, philosophies, principles etc.
Society is still struggling at deconstructing crude information to interpret it. The information overload has overwhelmed us. It’s only after we simplify it can we move to wisdom. McCandless suggests that information design solves information problems and data according to him is not the new oil, but the new soil. There is another interesting thing he mentions is that absolute in not true, relative is.
The whole idea of looking at a group of assets in an index was about simplifying market information, making the asset more understandable, making it easy to monitor. A simple design (indexing) changed the investing philosophy.
Extending his relative idea the author suggests that instead of looking at US defense budget (top budget spender) as an absolute parameter if one looked at budge spending as a % of GDP, the ominous US top rankings become mild and marginal. Comparing the Icelandic volcano carbon emission to the amount of carbon airplanes generally emit (and were grounded for the period), the volcano in question seems net carbon neutral. Information interpretation is a lot about comparison.
There is a lot of information stock markets generate. The next investment ideas are going to come from information compression and design tools. Performance cycles compresses price performance of 500 Indian stocks and rank them for seasonality. It’s a simple and effective way to look at the best and worst. But unlike what David is saying we suggest that information wisdom has a pattern, has a cycle and is a fractal. This again is not hard to prove. Take 10 words and rank them for frequency in a newspaper, webpage or a database. Sort them and see the pattern. Do it a thousand times, you will see the same pattern.

Time Triads, Time Fractals, Time Arbitrage, Performance Cycles are terms coined by Orpheus Research. Time Triads is our weekly market letter. The report covers various aspects on TIME patterns, TIME forecast, alternative research, emerging markets, behavioral finance, market fractals, econohistory, econostatistics, time cyclicality, investment psychology, socioeconomics, pop cultural trends, macro economics, interest rates, derivatives, money management, Intermarket trends etc.


The Dollar View


The view on the dollar influences the Romanian equity market. Regionally, currency strengthening is known to have a positive effect on the local equity markets. If the currency strengthens, the markets do well and vice versa. Dollar Rieki is still positive. This should have a negative effect on Romanian Leu, which confirms our negative view on Romanian markets. LOSO for most of the financial and early economic sector remains negative.

Enjoy the latest Alpha Early Economic update.

Domnita Pascut is the founding member of Orpheus Capitals. She started Orpheus in 2005 immediately after her post graduation. The company introduced alternative research products for Indian and Central and Eastern Europe and slowly expanded product line for global assets like Metals, Energy, Agro, Forex, Bonds and Green Assets.

Her interest in charts and market patterns was an extension of her keen understanding of social mood and sentiment. How charts could say so much intrigued her. From early 2005 she worked on market patterns, economic research, cyclicality and economic history. It was her liking for history which helped her see the cyclical natures of markets and patterns. She looks after Orpheus CEE Research and the intraday global research. Domnita gives more weightage to conventional technical analysis, channels, trendlines, market patterns and Fibonacci. She combines all this with basic Elliott structures, performance cycles and high low close bars.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are 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.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. 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 Research products.

Stop loss and exits are activated at 4%

Coverage Romania: Romanian Indices, Stocks, gold, Oil, Dow, CEE Indices (54 assets).


Alpha India EE - Reviewing the short side

Our preferred minor view on the Indian market remains negative. We are looking at the current leg up as a second wave correction which should complete soon (near 6,050-6,100 levels in the case of NIFTY). The alternate view suggests a completed (a)-(b)-(c) corrective structure down and now a potential new impulse up. Above 6,100 levels our alternate positive view strengthens.

The updated Numeric Ranking continues to suggest Punj Lloyd, Suzlon, Housing Development and Infrastructure and Tech Mahindra as worst performers which are most likely to outperform over the next weeks. On the upper side, we have Federal Bank, Canara Bank, Bajaj Auto, Bank of Baroda and Cummins as top performers and potential underperformers in the weeks ahead.

A second corrective wave up is a time of alertness and caution in the case of the short side of the portfolio. The Rieki portfolio currently carries 5 shorts. Cummins is retesting previous highs at 810 levels while Rieki made a potential head and shoulders formation which looks ready to break the neckline. Both weekly and daily RSI look negative, while 60MIN RSI is over reactive and suggests a turn from here. However, a break above previous highs would negate our negative view. Tata Motors is also retesting previous highs at 1,350. Weekly RSI and Rieki are still positive, suggesting that another leg up could happen before anything. Bank of Baroda, Federal Bank and Bajaj Auto structures look like completing second corrective waves up. Key levels to watch lie at 990 for Bank of Baroda, 470 for Federal Bank and 1,620 for Bajaj Auto. A break above respective resistances would suggest further positivity and potential new highs.

Alpha is a daily strategy signal product that gives long only, short only, pair trading signals. Alpha is a numeric Ranking product based on TIME fractals. The signals are carried over minor (10-30 days) and intermediate (above 30 days) time frame. The signals are 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.

Naked and/or pair strategies are not riskless strategies. Time arbitrage portfolio legs should be risk weighted before any implementation. 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 Research products.

Coverage India: BSE500 traded stocks and Indian Indices.

Michesan Anna-Maria, the columnist for the WAVES.INDIA weekly and Head of India Research. Anna discovered her interest of markets immediately after completing her graduate studies in Economics. She followed it up with post graduate studies in corporate finance. A host of research work in behavioral finance, option strategies and quantifying market sentiment followed. Anna covers Indian equity and combines Elliott, Time Fractals and Time Analytics to deliver accuracy across time frames. To review some of her work, check out the annual India accuracy report 2009.