Sometimes I get a bit goofy over numbers. After all, they are just quantities and one quantity should get pretty much the same consideration as any other quantity, right? Wrong!
On our way from counting from 1 to 10, we reach the number 6 which it turns out is pretty close to 0.618 times 10 - and 0.618 which is approximately the ratio between any 2 numbers in the Fibonacci sequence. And I know from years of watching the markets that advances often pause, and sometimes retrace, at 0.6 times the a magnitude of an advance. Like anything else it the markets, its not a hard and fast rule, just a limit to keep in your mind sort of like support and resistance.
When a stock goes from 20 to 1000, it will have to stop is the 600's. And when a stock is going from 600 to 700, its going to have to stop somewhere at about 660. And that's where we are with my favorite stock Apple Computer which this week reached the 660 mark, and then took a rest. At that point, I decided to take some profits, since they came fast and easy. At that point, the stock pulled back to about 650, then worked its way higher and closed the week at about 663. Then after the close on Friday, the jury ruled in the Apple vs Samsung patent infringement case. Apple won big and the stock close just short of 675 in after hours trading on Friday!
You know I have been on the Apple case for some time. Not long ago on this blog I remarked that Apple was the second highest capitalization stock on the market just below Exxon Mobile. Since then Apple is now the biggest cap stock ever in history at 581B, bigger than Exxon Mobile by almost half. Its market cap is now more than double that of competitors Microsoft and IBM and almost 3 times that of tech titan Google. Apple is a mega-trend in itself and its obvious what you should do, wait for a pullback and buy some deep in the money calls. After a pullback to point of resistance (now in the 660 area), next stop is 700 on its way to 1000. Don't over think it, Meta-Traders.
Forex showed some signs of improvement this week, with finally a winning trade in Atipaq USD/CHF after a long series of losers. It seems, in some ways, the market has "learned" this system, and seems to find a way to hit its stop losses in the course of slopping around in the directionless Forex action we have seen lately. Every system goes through losing periods but the question - whether I will be around long enough to withstand the draw down - remains to be answered.
Anyway, Daniel Fernandez will be coming back from Europe in a few weeks. Perhaps his return will ride to the rescue of our Automated Forex career, and snatch victory from the jaws of Forex Failure.
I am more convinced then ever that adaptive trading algorithms - those which change their tactics based on what has worked recently - are the way to go. The only system on Asirikuy which meets this description is Sunqu. And all 4 accounts on Asirikuy are up - albeit modestly. More to come on this topic.
Enjoy your weekend and what's left of the Summer of 2012.
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