Optuma Blog
Articles of interest & reports on trading, technical analysis, money management, and all things Optuma.
Optex Bands Part 2
Last week I wrote about the journey I took with the Dynamic Market Profile tool and how it showed some promise as a mean reverting strategy. I performed a number of “back tests” (getting the computer to run the simulation with a model portfolio), but could never get the consistent results I was seeing by observing charts.
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Optex Bands Part 1
Optex Bands is a new tool we created to measure potential extremes away from the “consensus” price. To explain the how and why of Optex Bands, we have to first take a journey through the evolution of this tool. In this post, we cover Market Profiles and POC’s.
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It’s All Relative
In his day, Einstein made a revolutionary breakthrough in physics with his theory of relativity. It presented a new way of thinking, answering many questions the Newtonian Physics couldn’t.
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Want to know a better way to determine Trend?
Late last year I picked up an old copy of a book by Michael Gur called The Symmetry Wave Trading Method. Gur introduced the concept of using a series of swings based on ATRs. This was one of those “ah-ha” moments.
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What can R2D2 teach you about trading?
I’ve worked in the markets for nearly twenty years alongside the evolution of algorithmic trading. I witnessed the Darwinian paradigm shift it brought as those who didn’t evolve were picked off.
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Does The World Really End Eight Times A Year?
In the last blog, we measured bearish sentiment with the Short Interest Ratio. Another way this can be done is by using volatility indexes.
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What happens when the shorts go up?
I read a great phrase this week – “Technical analysis is for-profit social psychology”. It’s certainly true that the underpinnings of the best technical indicators is investor psychology.
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What are your odds of being mauled by the bear?
Last week, we delved into a longer-term moving average crossover signal on the S&P 500 that was brought to my attention. Here’s that ominous looking chart again below. At first glance it says, ”I smell a Bear!” — and no one wants to get mauled like the last two bear markets.
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It’s the end of the Bull as we know it?
Is the recent 50 and 100 week moving average crossover in the S&P500 index as bad as it seems? In this article Carson takes a look at 21 occasions this has previously occurred, with some interesting results.
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Here’s a Quick Way to Gauge Health of the Market
Market breadth is an area of technical analysis concerned with gauging the market’s health. This is done by tracking the balance between buying and selling pressure. It’s like tracking who’s winning a game of tug of war…
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The Volatility Ratio: Does it signal market bottoms and tops?
Last week we examined what can be gleaned from measuring fear in the market using the volatility indexes of individual stocks in the S&P 500. These implied volatility indexes revealed expectations of future volatility. The same volatility indexes are useful to gauge when market moves are at extremes.
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What does the FEAR index tell us about market conditions and the turmoil in China?
Perhaps you’ve heard of the FEAR index? It’s not an actual index. It’s what the VIX (S&P500 Volatility Index) is also known as. And with good reason.
The VIX measures implied volatility—what is expected in the future. The reason it’s called the FEAR index is because the higher it is, the more it costs to insure the portfolio. When market participants expect or ‘foresee’ higher near-term volatility, that translates into a higher cost of protection because it costs more to insure.