May 2004

Trading Tip:

An article about the Bradley Stock Market Model was published in the November 2002 issue of Trading Tips newsletter.  Now that 18 months have gone by, it is time for a follow up article to document the correlation of the Bradley model with the stock market.

The Bradley model is a forecast of the market based on astrological relationships.   Because astrological relationships can be defined with mathematics, the Bradley forecasts can be made decades in advance.

The correlation has been excellent for the past several months.  The timing of the bottom turn in November 2003 was great, as was the timing for tops in February and April 2004.  The following chart shows the Bradley model for the balance of 2004, which is basically a downtrend to a turn in January 2005.   The model suggests a rally from Labor Day through Election day.

It needs to be emphasized that the Bradley model does not give price levels.   It denotes patterns, trends and the timing of swing tops and bottoms.   The Bradley data are numbers ranging from -200 to 200.   This data is rescaled and repositioned vertically on the Dow Jones Industrial chart to create the examples.

The Ensign Internet version will download daily, weekly, and monthly data from the Internet for stocks, futures, and indices on the following exchanges.  The stock data for some symbols goes back several decades.   For example, the daily, weekly and monthly data for IBM is from January 1962.

Stock Exchanges:  AMEX, Amsterdam, Australia, Barcelona, Berlin, Bern, Bilbao, Bombay, Brussel, Buenos Aires, Calcutta, Caracas, Copenhagen, Dusseldorf, EBX, Frankfort, Hamburg, Hanover, Hong Kong, India NSE, Ireland, Jakarta, Karachi, Kosdaq, Korea, Kuala Lumpur, London, Lisbon, Madrid, Mexico, Milan, Munich, NASDAQ, New Zealand, NYSE, Oslo, OTC BB, Paris, PCX, PHLX, Pink Sheets, Shanghai, Shenzhen, Singapore, Stockholm, Stuttgart, Taiwan, Tel Aviv, Toronto, Thailand, Vancouver, Vienna, Xetra.

Futures Exchanges:  CBOT (including eCBOT), CME (including GLOBEX), COMEX, EUREX, EuroNext, IPE, KBOT, LME, LIFFE, MGE, NYBOT, NYMEX, SGX, WCE.

Ensign Internet can also download tick data for today and intra-day data for the last 4 months for the Futures exchanges, Indices, and for the AMEX, NYSE, NASDAQ, and Canadian stock exchanges.  The tick data can be used to maintain constant tick charts, Momentum bars (constant range), and constant volume bar charts.  The intra-day data can be in any minute interval.

This same capability to obtain data from the Internet is available in Ensign Windows for the Interactive Brokers data feed.  Thus, IB users will be able to refresh (backfill) constant tick, Momentum, constant volume, intra-day, daily, weekly, and monthly charts for most of the popular futures and index symbols, including  ES, NQ, ER2, YM, ZB, ZN, CHF, JPY, EUR, DAX, ESTX50, $INDU, $COMP, and $NDX.

'Just wanted to drop you a note about the new constant Volume and Range Bar (Momentum Bars) setups.   I have tried both on different trading vehicles and at different settings.  I find both to be superior to the normal interval bars that I used in the past.  I personally enjoy the Range bars best.  I like the fact that there is a new bar when the range of the current bar is exceeded and I can set that range any way I want.  I can tailor the action to the trading vehicle and personality of the market.  It makes the bars smoother and gives improved entries.  I also noticed that they tend to make the indicators work better. 

One of the hardest things a trader must deal with in my opinion is the length of the bars on a 3 or 5 min chart.  I recently saw a 15 point opening bar in the ER2 using a 3 min chart and there are many times that I see 3 and 4 point bars.  I had an R75 chart up at the time of the 15 point bar on the three minute chart and it was too rapid to trade but it got my attention.  When I run a 3 minute chart and an R75 chart side by side I often see the 3-min chart produce a single 3 point bar.  The R75 gives me three bars.  There is a large difference between interval bars and the new Range bars.  Now when I get a 3-point bar on the 3-minute chart that would be untradable for me, I can now trade it because I will get several bars using a Range bar setup that phases me into the trade.  It gives time for the indicator to react and provide a signal. The Volume bars also tend to make things smoother and I am still looking at ways to use these to improve the trading.  Being able to control the volume in each bar is very helpful.  

The first chart depicts the ES R100 (100 point range bar) and the 2nd chart is a 3-minute chart.  The R100 chart is much smoother and more tradable than the 3-minute chart.

Thanks for the great Ensign program.  It is the best trading program I have ever used.