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As a way to continue to make Neural Market Trends a great place to visit on the web, I’m going to post development details and notes of a new trend model that we will create. I want to, over the course of a few weeks, engage my readers and myself into building a new trend neural net model of our collective choosing. We will use the 9 steps to success in neural net model development as our outline and we’ll detail the progress and thought process of building this model on this blog. We will use the open source YALE data modeler and free data sources to build this model. This is a great way, in addition to my “Build A Model” lessons, to build something totally from scratch and truly learn how take your investing to a new level. Does this sound like a good idea? If you’re interested, drop me a comment! PS: I’ll resume posting next Tuesday as I’m taking a few days off to celebrate Memorial Day! Have a good one! ...

Congratulations to Howard, Lindsay, and the rest of the Wallstrip gang! CBS acquires Wallstrip for an undisclosed amount but the rumor on the street is $5 million. Not bad for a video blog less than a year old!

After my Random Thoughts About Trends post, I decided to take a deeper look at one of the Water ETF’s available. I did a quick check on the Powershares Water Resources ETF (PHO) and its holdings. Despite a small correction between March and June 2006, PHO has been steadily marching upward. I might consider adding this ETF to my 401K account. In case your wondering, here’s what the ETF seeks to accomplish: ...

My wife chides me for thinking too much and spending too much time observing things. I must admit, its certainly fun to observe trends and then think of the possible outcomes if and when the trend bursts. Here are my random thoughts for this slow Sunday morning on a few trends: Peak Oil - Although I believe in the concept of peak oil, I just don’t know when its going to happen. It could be 2010 or 2510. Still though, China will consume more oil as they catch up to us. It’s probably a smart idea to be long oil but you didn’t need a neural net to tell you that! Alternative Energy - It’s a good idea and I’m all for it. I’m just wondering if the trends we’re seeing in this market will collapse just like it did in for the dotcom companies. Usually, a handful of the companies survive to make it to the next round after a bubble crash. Amazon and Ebay made it, did Pets.com? I don’t know enough about the players in this field to be able to pick the one that I think will survive. Water Resources - As a civil engineer, the keystone to growth of a civilization is clean water. After water is sanitation and food production but it all starts with water. Expect more strength in the water trend as I’m sure we’ll see water wars one day as one nation builds a dam and deprives a downstream country of their water. Crocs - I don’t get this trend but people love them. I expect Crocs to go the way of the dinosaur one day as some company will come up with a better shoe/sandal. Maybe they’ll call it O’ shit, get it? Croc O’ Shit. Never mind. China - China’s growth will continue to trend higher as this nation emerges as the new super power. I worry about its fast growth but then again I worry too much. They’re growth reminds me of weeds that grow so fast that their root system can’t support them and they collapse. I just don’t know if a possible collapse would come from the inside (strife, rebellion, pollution) or externally (war). I very well might be wrong with my assessment and China could emerge into a nice cuddly Panda Bear instead of an aggressive Dragon. US Elections 2008 - The Flying Spaghetti Monster wins. [tags]Crocs, China, Water, Oil, Energy, FSM[/tags] ...

Let’s look at mutual fund trend today, BRSIX has been on a nice trend up since late 2001. I think it was at that time I wanted to buy BRSIX but never did, boy what a mistake! Well hindsight is always 20/20 and with the risk of being called a performance chaser, I’ll wait a bit before adding this bad boy to my 401K. Although it made a new high recently, it seems to be bumping into resistance at $20. ...

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. :) ...