Inventory Grab Alert 4/30/09!

[nirav34]

Quote from tradingbug:

Im still not exactly sure what you are showing. It looks like you are showing that the CD was unable to get back...but back to where? Just confused.

Also, you mentioned the 24-27. IOAMT room was looking at 23-27 area as where there might be some resistance.

I have been trying to logically think through where the resting inventory would be.

Essentially, price trends and gets to a place where resting supply or demand are sitting(responsive buying or selling). This slows down the probe, what follows after the slow down of the probe is initiated resumption of the trend or initiated trade to probe back to where original trend came from.

It seems like there is a connection between the initiated trade and the resting inventory. How they are related.....im still working on it

Any suggestions/thoughts would be appreciated.

Look at the volume profile from IOAMT. 27 is the low volume nod there, I don't have more data but you could also look at CD and find shorts there. What I am showing there is the strong 10k hit the bid there and it held. Now I know that 10k is pretty big size, so I look at CD to break the prior low set and that must resist when it comes back up. If it does you have a strong signal that they are all shorts from that line up. Maybe AMT has different way to look at it, but that's how I look at it.

http://i41.tinypic.com/2wqdhrr.jpg

 

[Ken More]

Quote from manlycure:

With respect to the CD at the BUY signal (right after the cash open) you have:

(1) Positive DD @ 14:37
(2) Negative DD @ 18:07

Without hindsight knowledge, how do you choose the reference point (for delta divergence) to justify the long trade?

I would like to kill the individual who "discovered" Divergence!

Wasted years on that one. Someday, as Dr. Phil says, you'll find "that dog won't hunt."

 

[manlycure]

Quote from Ken More:

I would like to kill the individual who "discovered" Divergence!

Wasted years on that one. Someday, as Dr. Phil says, you'll find "that dog won't hunt."

The pertinent question is whether there's statistical edge in using DD (delta div). With proper MM (money mgmt) and account size, you can rely solely on DD (even if the edge is as slim as 55/45) to create a profitable system IMO.

 

[Ken More]

Quote from manlycure:

The pertinent question is whether there's statistical edge in using DD (delta div). With proper MM (money mgmt) and account size, you can rely solely on DD (even if the edge is as slim as 55/45) to create a profitable system IMO.

You'll learn! Bill Eckhardt, Rich Dennis Partner, a lot smarter guy than both of us put together blew this one out of the water. BTW, he was a math PHD.

Divergence, like religion, is a crutch. You'll see...

Finally, you're not good enough to make money with the odds you sighted- practically no one is.

If this depends on divergence then I have strong doubts. Remember he is not disclosing most of what he does. He'd be an idiot to do so and I told him that awhile ago. As is, what has been posted will be arbed away.

 

[Ken More]

One final comment:

The commercials go to great lengths to hide what they do in all futures markets so why would ES be any different?

Since they are usually right, while large speculators are usually wrong (even though it makes no sense- since how do you stay large when you're mostly wrong?), volume is so carefully watched that they must take that into consideration in their machinations.

 

[manlycure]

Quote from Ken More:

You'll learn! Bill Eckhardt, Rich Dennis Partner, a lot smarter guy than both of us put together blew this one out of the water. BTW, he was a math PHD.

Divergence, like religion, is a crutch. You'll see...

Finally, you're not good enough to make money with the odds you sighted- practically no one is.

If this depends on divergence then I have strong doubts. Remember he is not disclosing most of what he does. He'd be an idiot to do so and I told him that awhile ago. As is, what has been posted will be arbed away.

I'm familiar with Bill but not his analysis of delta. It's easy to be convinced that DD by itself doesn't carry any trade-worthy informational value. If you read the early posts in this thread, you'd see that I raised that concern multiple times. Without looking at Bill's work I can't tell what is the scope of his proof. It's quite conceivable that DD is valuable in certain price action/price levels contexts, aside from generic use of delta. I do agree that what gets posted is subject to being arb'ed away, it's the revenge of the nerds!

 

[Ken More]

"I do agree that what gets posted is subject to being arb'ed away, it's the revenge of the nerds! "

That's the best way I've ever heard it described.

No, Bill was analyzing divergence with indicators. I'm sure he hasn't looked at DD.

My point is the commercials are aware of common things like every permutation connected with volume.

My guess is AMT could trade with nothing more than a screen with price and do well because he thinks analytically.

 

[tradingbug]

Quote from nirav34:

Look at the volume profile from IOAMT. 27 is the low volume nod there, I don't have more data but you could also look at CD and find shorts there. What I am showing there is the strong 10k hit the bid there and it held. Now I know that 10k is pretty big size, so I look at CD to break the prior low set and that must resist when it comes back up. If it does you have a strong signal that they are all shorts from that line up. Maybe AMT has different way to look at it, but that's how I look at it.

http://i41.tinypic.com/2wqdhrr.jpg

Thanks Nirav...will have to look more in depth at this.

Have a great weekend everyone.

 

[Insearch]

This may be a really silly/naive question but who exactly are "commercials"?

Plus, I'd assume they are not one person, but a group of people/corporations who behave in a similar way . . .

I'd also assume that one commercial cannot for certain know what the other commercial will do at a certain time . . . unless they are a "secret society" . . .

So how do they know what to do, and if the're changing things in their strategies/trading, how'd they know to all do it at the same time?

I'd like to know AMT's and Ken's views, but would appreciate comments from anyone who understands their behavior . . .

 

[Ken More]

Quote from Insearch:

This may be a really silly/naive question but who exactly are "commercials"?

Plus, I'd assume they are not one person, but a group of people/corporations who behave in a similar way . . .

I'd also assume that one commercial cannot for certain know what the other commercial will do at a certain time . . . unless they are a "secret society" . . .

So how do they know what to do, and if the're changing things in their strategies/trading, how'd they know to all do it at the same time?

I'd like to know AMT's and Ken's views, but would appreciate comments from anyone who understands their behavior . . .

This will be my last post on this thread because I do not want to interject my views. My views are my views.

Commercials control all the futures markets by their sheer monetary size and KNOWLEDGE of their commodity. AMT will agree they are mostly right about market direction. However, day to day, they go to great lengths to hide what they are up to. The comitment of traders report (COT) gives you clues but is lagging deliberately.

In the S&P pit you also have trader groups who meet in the morning to devise their strategy for the day. Non of this is "secret." It takes a lot to compete against them is all.

Finally, they have a library with EVERY trading system known to man to reference if they like. And you, think they still trade off of pivots and volume? Maybe the one lot locals do.