One of my readers, let’s call him Francis, sent me an interesting email yesterday. Apparently he had been inspired by Scott’s original post on the use of scatter charts for what I call raw edge discovery (RED), for lack of a sexier term. So he proceeded to spend a significant amount of time on slinging spreadsheets in Excel, which can get quite involved and in my opinion is rather error prone as each extra condition requires the addition of at least one more column. His primary focus thus far had been mean reversion and he is now attempting to apply a similar approach to trending or momentum systems.
I wonder what thoughts were triggered in your head when you saw the featured image above. The notion of a brewing storm is rather ominous and usually is associated with inconvenience, discomfort, and sometimes outright destruction of property. But I chose it very carefully to make a point which I’ll try to convey below. Let’s look at some charts:
It’s the last session of the month and that means you’re getting treated to a massive momo update. It’s been a long standing tradition here at Evil Speculator and I rarely miss an opportunity to step back and look at the big picture. To me personally the process of compiling it helps me gain a deeper understanding of what drives the ongoing market phase and where we may be heading next. However this time things are a bit more tricky as technically speaking we seem to be in uncharted territory (pun intended).