Saturday, March 03, 2007

Market Tells: A Tool For Decision Support

In my recent reflection on integrity, I expressed skepticism regarding many of the products and services that are promoted to traders. There are so many idiots running around the trading world, it's easy to become jaded when you hear of yet another commercial offering. That's unfortunate, because there are some real quality offerings out there. I've tried to highlight these in the resource section of my recent book, my Trader Development links, and in this blog. I don't hold commercial interests in any trading products or services and don't accept "kickbacks" from vendors when readers make purchases. Rather, my goal is simply to inform readers of resources I find to be helpful. If I haven't utilized the product myself, I don't write about it.

All of which brings me to Rainsford (Rennie) Yang, who publishes a research-based service called Market Tells. Rennie's work, which might be familiar to readers under the name "Astrikos", consists of historical investigations into market patterns. If you have found historical pattern studies to be helpful in this blog and in the SentimenTrader work, I think you will be interested in Rennie's efforts.

Here's an example of Rennie's work: After the large market decline, he investigated instances since 1980 in which down volume was 90% or more of total volume on the NYSE. He highlighted each occasion and found that the market was higher on 27 out of 30 instances two months later. Not bad.

A particularly useful feature of the site is the "Tells" section, which summarizes the historical patterns he has found most important and indicates whether, at present, they are leaning bullish or bearish. He also updates intraday put/call ratio data daily and provides intraday market updates of indices and indicators. A section of charts provides reviews of indicators and sectors and data sheets summarize basic market data. Altogether, it's quite a wealth of information.

Rennie is generously opening his research archives to TraderFeed readers for the next week. To gain access to the site, you can enter as a subscriber with the user name of "free" and the password of "pass". Note that both are all lower case and you won't be entering the quotation marks. For those interested in subscribing to his daily research, he is also lowering the monthly subscription to $36 until March 9th. Also not bad.

As readers know, I'm not a mechanical trader; I don't automatically take signals from historical patterns. But I do find it helpful to know what those patterns are. It's a bit like being in a poker game. Knowing the odds of your hand is crucial; then you wait for betting to commence before deciding whether or not to play that particular hand against those particular opponents. There are a few services I find helpful for decision support regarding trading patterns. These include Decision Point,, SentimenTrader, Market Delta, and Trade Ideas. Let's add Market Tells to the list.