The Forecasting Systems Letter
Jeffrey Mishlove
| Vol. 3, # 7 |
Sunday, October 15, 2006
|
On Death And Aging
The photo above shows my mother, Rose Mishlove, at
a cemetery in New Jersey where her brothers and parents are buried.
One of the reasons why I have posted to neither the Forecasting Systems Letter nor to my blog in the past month is that much of my time and energy has been devoted to taking care of this beautiful, 85 year old woman -- who took care of me for so many years in my childhood and infancy. I will not dwell on the details of her situation, other than to say that, in the last month, she has relocated to Las Vegas from her home for over 30 years in Milwaukee.
There are many uncertainties in the world of forecasting. But, one thing is indeed certain: aging and death. This certainty, ultimately, is the ground of philosophy and religion, as well as much metaphysical speculation. Additionally, it provides me with much of the motivation to explore the world of financial forecasting. This is particularly true as we live in an era when most of us can expect to live longer than our parents who, themselves, are living longer than their parents. So, we are faced with the reality of finding the financial means to care for our parents, as well as ourselves (and perhaps, also, our children). Today, because of this increasing longevity, many of us -- in spite of our affluence -- are faced with the possibility that we may outlive our own assets.
Because of this looming possibility, knowledge of financial forecasting -- even if it provides only a slight edge in the marketplace -- can contribute meaningfully to our well-being. The simple fact is that a slight financial edge, compounded over one or two or three decades, can become the deciding factor between a life of comfort and one of hardship.
One of the reasons why I have posted to neither the Forecasting Systems Letter nor to my blog in the past month is that much of my time and energy has been devoted to taking care of this beautiful, 85 year old woman -- who took care of me for so many years in my childhood and infancy. I will not dwell on the details of her situation, other than to say that, in the last month, she has relocated to Las Vegas from her home for over 30 years in Milwaukee.
There are many uncertainties in the world of forecasting. But, one thing is indeed certain: aging and death. This certainty, ultimately, is the ground of philosophy and religion, as well as much metaphysical speculation. Additionally, it provides me with much of the motivation to explore the world of financial forecasting. This is particularly true as we live in an era when most of us can expect to live longer than our parents who, themselves, are living longer than their parents. So, we are faced with the reality of finding the financial means to care for our parents, as well as ourselves (and perhaps, also, our children). Today, because of this increasing longevity, many of us -- in spite of our affluence -- are faced with the possibility that we may outlive our own assets.
Because of this looming possibility, knowledge of financial forecasting -- even if it provides only a slight edge in the marketplace -- can contribute meaningfully to our well-being. The simple fact is that a slight financial edge, compounded over one or two or three decades, can become the deciding factor between a life of comfort and one of hardship.
Update on AES as a Predictor of the S&P 500
Futures Contract
A month ago, in my previous Letter, I reported a most unusual and unexpected discovery that the utility company, AES, was an excellent neural network input predicting the S&P 500 futures contract. Lets look at how the system has continued to perform subsequently.
A month ago, in my previous Letter, I reported a most unusual and unexpected discovery that the utility company, AES, was an excellent neural network input predicting the S&P 500 futures contract. Lets look at how the system has continued to perform subsequently.
The chart above, taken from BioComp Profit,
shows that the neural network signal -- based upon AES -- has been continuously
long since July 28, 2006. In the past month, trading a single S&P futures
contract, the system would have gained almost $16,000 equity. Very healthy
trading.
Why does this obscure indicator seem to work so nicely? I don't think anyone really knows. Some, of course, would argue that it is pure chance -- and, therefore, very deceptive. I tend to think of it as an example of a persistent, non-linear pattern. But, how long will it continue to persist? Perhaps, as long as it continues to remain obscure.
Why does this obscure indicator seem to work so nicely? I don't think anyone really knows. Some, of course, would argue that it is pure chance -- and, therefore, very deceptive. I tend to think of it as an example of a persistent, non-linear pattern. But, how long will it continue to persist? Perhaps, as long as it continues to remain obscure.
Update on BioComp Dakota Flocking Bots System
for the Nasdaq E-mini Contract
BioComp Dakota
is probably the most innovative, unique, new financial forecasting system
available. It is based on the principle of "flocking bots." Without going
into a lengthy explanation of how these work, let me simply say that Dakota
is a system that is constantly readjusting itself to the market. As such,
it is never over-optimized on data from the past. Last September 12, I reported
on a Dakota system designed to predict the Nasdaq e-mini contract. The chart
posted then showed that, as of Sept 8, total system equity -- trading a single
NQ contract (since 2003), was $21,843. The chart below shows subsequent performance
during the past month:
We can see over $2,000 in equity growth during the
period between Sept 8 and Oct 12, 2006.
Incidentally, how does that compare with the EminiZ system of John Ehlers? According to the www.eminiz.com website, Ehlers' NQ system gained about $1,600 during the same period -- as shown below:
Incidentally, how does that compare with the EminiZ system of John Ehlers? According to the www.eminiz.com website, Ehlers' NQ system gained about $1,600 during the same period -- as shown below:
Dow Jones Industrial Average Sets a New All-Time
High
Wow! What does this mean? Let see how the popular
Advanced GET
software interprets this milestone information:
The chart above shows monthly bars, going back to late 1993. This is very interesting. The blue dots indicate the complation of an Elliott Wave phase. A single Elliott Wave has five phases. So, the chart as a whole signifies a giant Elliott Wave cycle going back thirteen years. According to Elliott Wave theory, Once this cycle is completed, we can expect another similar cycle in the opposite direction. Using the MetaStock charting program, I show some trendlines below indicating just how far the Dow Jones Industrial Average might possibly fall:
The chart above shows monthly bars, going back to late 1993. This is very interesting. The blue dots indicate the complation of an Elliott Wave phase. A single Elliott Wave has five phases. So, the chart as a whole signifies a giant Elliott Wave cycle going back thirteen years. According to Elliott Wave theory, Once this cycle is completed, we can expect another similar cycle in the opposite direction. Using the MetaStock charting program, I show some trendlines below indicating just how far the Dow Jones Industrial Average might possibly fall:
Richard Russell, author of Dow Theory Letters has famously predicted that one day the Dow Jones Industrial Average and the price of an ounce of gold will be equivalent. At what level does he believe that this will occur? Perhaps at about 3,000. As of today, the DJIA index is equivalent to 20.04 ounces of gold.
Sector Rotation as Viewed by Dynamic
Trend Profile
If we are still in a long-term bear market, as Richard Russell -- with much justification -- claims, this is not reflected in the outlook for the the coming four to ten months as shown in Tom Joseph's Dynamic Trend Profile system. The diagram below, suggests a generally rosy outlook for all market sectors:
I need not go into the many details of interpreting the above diagram. Suffice it to say that there are only two trading "rooms" (or time frames) in the entire overview picture shown above that are colored red. Every other indication is either bullish or neutral.
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