Changewave.com - last Mondays NAS problem

[Aaln1]

Read this on Wavewire:

Monday was the biggest day of margin account liquidations he can remember.

When people buy stocks with loaned money (i.e., a margin loan) and the stocks go down below a certain percentage of the total value of the account (25% is the statutory limit) brokerage firms have no choice but to sell the securities in the account and pay back the loan. You don't get a choice or a call, you get a notice in the mail

three days later saying ALL your stocks were sold.

A big part of the Monday sell-off was margin account liquidations,

i.e., forced selling. You could see this in the volume spike around 1:00-2:00 p.m. liquidation time.

I also got this which you might like:

Dear Lord: Just Give Me One More Bull Market And I Promise I Won't Throw The Money Away This Time.

This week's context rant is on denial. And it isn't a river in Egypt.

down to earth US site: Find them at http://changewave.com/index.html

 

[KAG]

Hello All,

I have been trading emini's for a few years now and I want to Beta test a new idea. I have been interested in "Collective Intelligence" (the ability of groups to make better predictions than individuals) for a long time and I thought it would be interesting if we, as small individual Traders, could share our market direction predictions maybe we could use the collective results in our individual day to day trading strategies. The one piece of information we (and everyone else) is lacking is what Traders might do in the future (within the next hour) which is a far more important piece of information than what Traders have done in the past.

I created a simple free service that will collect, manage, and disseminate the results of an anonymous opinion poll that continually updates throughout the trading day. This is a BRAND NEW website and I need some traders to help me get it going and shake any bugs out. All I ask is that you participate responsibly and email me with your comments, suggestions and problems. If it works well I intend to keep it a free website so lets hope for the best! Thanks for your interest!


go to: index


Sincerely,

KAG

 

[nine]

Be careful to keep a groupthink wave/build up from occurring. The voting (crowd wisdom) has been shown to work but any time groupthink occurs it distorts the results. I wonder if you might get that by too high a frequency or because you are already looking at something that suffers from groupthink ... the markets and their irrational exuberance.

 

[KAG]

Be careful to keep a groupthink wave/build up from occurring. The voting (crowd wisdom) has been shown to work but any time groupthink occurs it distorts the results. I wonder if you might get that by too high a frequency or because you are already looking at something that suffers from groupthink ... the markets and their irrational exuberance.

I think you have a good point. In fact, I do not know if the "group think" effect will actually be a counter indicator to some traders and their systems. I do know that collective intelligence is usually correct more often than even the best individual expert in a given field. Also, this is the only way we, as traders, can get a feel for what traders in the market might do in the future. All of our indicators use past events to predict the future when the only thing that really matters are traders intentions going forward. I think the best we can hope for is that enough traders use the system and that we can all asses the feedback and derive it's best use.

BTW I am controlling the frequency by limiting individuals to voting, at most, every 30 minutes.

Thank you for your post and interest in my project!