what we do
Our focus is on the development of proprietary geodesic models that characterize the behavior of leveraged long/short ETFs in pairs trades using first principles of Hamilton-Lagrange-Euler mechanics. Because of tracking errors & daily compounding phenomena, equal weightings of leveraged ETFs in a pairs trade are virtually never 50-50. Daily data & graphics will show subscribers where neutral pair weightings have moved along the path of the pairs geodesic thereby providing multiple market direction & re-balance indicators.
SDS-SSO Model Update - June 18, 2009
Dear Blogger, thank you! again for subscribing to the S&P 500 long/short ETF Model and welcome to new members who just joined and new list subscribers. today's analysis is available for download:
ignore the missing data error message that may pop-up when opening up the file. Excel for Windows looks for metadata that Excel for Mac doesn't generate.
if you ever misplace your login, send me a message using the email you originally provided when subscribing through paypal. visit the blog for an archive of all subscriber updates and alerts. the archive is search-able and comments can be posted by everybody. | | | Today's Commentary
the U.S. stock markets in general are clearly showing signs of slowing down. even with today's bump up in the dow & S&P, the markets are very sluggish. the nasdaq closed lower and the other two indicies rolled over at the end of the day and closed well off their highs.
however, once again, stay cautious and vigilant. all kinds of equity swap contracts and what not expire tomorrow. if there's going to be a major change in volatility, it will be tomorrow. all the major indicators i track in the spreadsheet are saying the S&P 500 is in the early phases of a slowdown except the PID-7 neutral re-balanced indicator, though this indicator is sloped in that direction. but i don't think the slow day will last as long as the last one from early feb to mid march. the standard deviations i track in the price of the ETFs really haven't bouced around recently as prior to the last slow down. that's a hunch, we'll see what happens.
after seeing panic buying this time last month and the end of april, i'm not discounting a stealth buying rally starting all over again tomorrow. this time around i would have to conceede the probability of that happening is not as high this time. for one reason, the primary indicators have stayed in slowdown territory for 3 days now. vector c has shrunk 3 days in a row, diff c & diff theta are still on the other side of the x-axis and the ETF RSI are also at a crossroads.
note that the SDS-SSO geodesic chart has 2 series of data now. the blue series are the geodesic coordinates for the last 3 trading days. they're headed back to the apex and at an increasing rate; a decent "yellow light" a change in market direction is in the offing also given the fact that the lower leg of the geodesic is hyper-extended beyond the upper leg. keep an eye on those coordinates in the updates over the next week of trading.
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Disclaimer
Equity Informatics is a developer and service provider of proprietary financial equity pricing models & trading methods. The company familiarizes subscribers with the basic thesis of our models, provides subscribers with daily neutral pair weightings and methodologies on how to use the data as intended. subscribers shall not share any information obtained from equity informatics with any other party. use of these services are granted only to and intended for the benefit of the subscriber. Equity Informatics does not offer the sale of equities nor do our trading models constitute trading advise. It is incumbent on potential clients to perform due diligence and seek a professional financial adviser to help you determine whether subscribing to the company's services are suitable for your financial situation and level of risk. No guarentees of performance are expressly or implicitly offered nor does Equity Informatics guarantee the accuracy of market information used to provide model data to our client. equity informatics does not assume responsibility for lost principal, lost gains or tax consequences.
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