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I’m busy working on my S&P500 Volatility Model tonight and I’m slowly inching toward a better correlation. Despite my headway, it still needs a lot of work to be statistically significant. Right now its close to 75% correlated but I still haven’t figured out how I want to rank the volatility events. I did create a nice image of how the data looks after its modeled. The x-axis is the rate of price change in the S&500 closing price and the y-axis is the volatility event (1 being severe and 0 being safe). If you squint at the image you can see a possible “U” shape outline, which means that this model could be explained by a second order function (parabola). The next image, a chart from my Excel spreadsheet, shows the parabolic function of the modeled data. Well, back to work! [tags]S&P500, Volatility, Models, NeuralNet, Timing, Quantitative, Finance[/tags] ...

I’m pretty sure a short-term top is in for EURUSD and I’m trapped up there. :) I have four positions open at an average price of $1.36132 and with EURUSD trading around $1.35764, I have a long way to go before I see profits again. Still my neural trend models say to remain long so and I will be adding to this position on severe drips (around $1.3500 and then $1.34700). Its too early to tell if the Australian Dollar’s trend is resuming or if its still consolidating, either way the trend model retains an UP signal for this currency. I don’t regret selling my two AUDUSD positions but I’m mad that I didn’t wait for the mini rally yesterday. Lesson learned, I should always trust my trend model and buy on dips, not on new highs. I have to re-examine my Yen model because it gives me a lot of UP signals in a continuing downward trend. I find it awfully suspect but then again the market forces could be there to make the Yen pop. A stronger Yen will surely rein in the carry trade and help reduce the global liquidity glut. That will in turn firm up our mortgage interest rates push more sub-prime borrowers into bankruptcy or foreclosure. Oh what a tangled web we weave, when first we practise to deceive! - Sir Walter Scott ...

I was curious to see what the blog posting trends were for these three assets and some other topics of interest. It seems like all three are on a steady upward trend, that’s probably because oil and gold are rising in price and all the real estate bloggers are posting “I told you so.” Britney spiked in late Feb, probably because of her head shaving event, Angelina is cruising along. I’m still waiting for Mr. Ugly to spike. Maybe if he shaved his head and adopted a second cat his ratings might increase. :) ...

I bought GE for my retirement account because of its dividend payout and my uncanny ability to buy GE products without even knowing it. When it comes to picking stocks for long term appreciation, I like to use good old fundamental analysis. That doesn’t mean I ignore technical factors that affect its price. Silly me, I bought GE at a recent high but I can be patient. Why? Well I’m testing out a new Fundamental Analytic Neural Model that’s telling me GE should be trading around $43.00. ...

Good Morning! There was further sell off in the EURUSD and AUDUSD pair last night as the USD gained strength. It’s just follow through from the better than expected ISM report yesterday. I believe these market machinations will be short lived and expect the pairs to reverse and head back up in short order. In the meantime, I’m holding 6 positions in these pairs (4 in EURUSD and 2 in AUDUSD). Right now I’m down 48 and 18 pips respectively, with my largest single loss at 75 pips in the EURUSD pair. It’s times like these I must remain true to my trading plan and stick it out. I ran my neural nets this morning and they still indicate UP trends for the EUR and AUD, so I’ll have to be patient. The worse case scenario is that I slowly scale out of losing positions. :) ...

Good Morning! Today’s currency trends are as follows: AUD - UP BP - Strong Up USD - Strong DOWN EUR - Strong UP JPY - UP (this is suspect) CHF - RANGE I’m considering sending out a morning email with my daily currency trend signals. What do you think? Good idea? Overtime I hope add other asset classes like Oil, Gold, and Silver. Don’t forget to enter my Predict the S&P500, Win $100 contest! ...

I’ve uploaded my April 2007 $100 Experiment Forex trading results and despite the rough patch I had in the middle of the month, I saw a 5.15% growth in trading equity. My expectancy recovered as well but it’s still reeling from my disastrous position sizing debacle! My expectancy for April came in at $0.15. In April I took 35 trades, 25 of them were winners and 10 losers. My average win was $0.48 vs my average loss of $0.68. I’m holding a total of four positions going into May, 2 in EURUSD and 2 in AUDUSD. When I close them out, I’ll detail them in May’s results sheet. I must make an effort, as part of my neural net analysis for May, to pinpoint the price where I must exit a trade in the event the trend reverses. This will hopefully allow me to truly quantify my Reward vs Risk ratios. ...

Good Morning! Neural Market Trend’s article, Predict the S&P500, Win $100 was featured in this week’s Carnival of Budgeting! Stop by and have a look see. Don’t forget, this is the last week to enter my contest! You to can have a chance at winning $100!

Good Afternoon! Neural Market Trend’s article, Predict the S&P500, Win $100 was featured in this week’s Carnival of Personal Finance and Festival of Stocks! Take a moment to visit each host!

Friday was a damn good day trading Forex! I made over $2 in profits from the GBPUSD currency pair alone (roughly 1.8%). I was elated to make such a good profit but I must remain humble. I can’t let my ego or euphoria get a hold of me or else I will get slaughtered. The same goes for emotions of greed, I must remain zen like and take profits when I see them. I’m posting a chart so you can see how my how my GBPUSD trade worked out in the end; I sold darn near the top (luck)! I’m still holding my EURUSD position and entered a new one in AUDUSD Friday afternoon. The trend analysis keeps telling me to be short the USD and long pretty much everything else (Yen not included). ...