It’s time to talk about Forex as the temporary Dollar rally has effectively ended and is now launching significant advances in various cross pairs. You may recall I have been anticipating this very scenario since Monday after seeing a potential floor pattern on the EUR/USD in particular . Unfortunately however the one pertinent horse I had in play appears to be the lame laggard of the bunch, which means I’ll have to find myself a sturdy banana tree later this afternoon.
The relentless advance in equities over the past few weeks/months may have distracted us from the fact that several key markets have continued to run in circles. Attempting to take break-out entries in highly volatile sideways conditions can quickly turn into a sequence of losses. Of course the realization of this is usually only clear in hindsight as regime change is difficult to anticipate.
I just love statistics, which I in part attribute to my anal retentive Teutonic background. I’m not even that good in math but show me any graph and it’s like intellectual p0rn to me – I can’t resist. After building our most handy Evil Speculator statistics monger I spent hours looking through literally hundreds of charts. The most salient of course being the Spiders (SPY) as it gives us a pretty good historical perspective on seasonal trends on equities as a whole. So let’s see where we heading, at least statistically speaking:
I spent a bit of time this morning extending my weekly top/bottom stock parser to also include NYSE, AMEX, and Nasdaq symbols, thus increasing the number of candidates considerably (from a bit over 500 to several thousand). This will most likely help us even out the long/short ratios during historically bullish or bearish weeks. Pulling all that data from Yahoo Finance proved to be a bit of a challenge as they’re quick to cut you off after a few hundred requests. So I implemented a ‘top up’ function which downloads only the most recent data each week instead of getting the entire historical data every time.