Where to start with fundamentals?...

[Yuppie]

I have been re-reading through the various threads on TT. I didn't seem to catch-on to what Iraj was espousing on the first read through all the threads. It has taken time for Iraj's message(s) to get through. The most significant, bar none, is the knowledge and use of fundamentals [especially with his latest posts in the Where is the market heading?... thread].

I am not totally new to trading. However, I am totally new fundamentals in every way. I see two types of fundamentals: one is the fundamentals of stocks - I have no problems with learning this, I have a few books, there are various pricing models, Iraj has mentioned CAPM (which I have started reading up on) - and so have an idea on how to go about this; second is the fundamental factors that drive the market(s) as a whole.

Learning about the fundamentals that drive the market is where I am really struggling at the moment. The last couple of days I have been searching the interweb, trying to find information about how to interperet events and how they affect the market. Unfortunately, so far I have only been able to find information on the fundamentals that affect stock prices.

The one thing I know I have learned from TT is (and I am in no doubt that I will learn more as I continue to re-read threads here on TT)... It is not the news/interest rate change/price of oil/etc that tell you whether the market is strong/weak and where it's going, but the reaction of the market participants.

Iraj said the following in his post here (incase it's deemed as taken out of context) today...

$ is going mad.. low interest rate ,,, financial rallying ,, Oil , Gold falling . would you short this market ? These are the underlying reasons for STRENGTH

I am not sure how the dollar affects the market... not sure how interest rates affect the market... financial rallying, I assume, is stocks rallying - indicative of a strong market (when taken into account with other factors) I presume... not sure how oil or gold affects the market...

I'm don't wish to be spoon-fed. I am looking for sources where I can find out how to interperet these things on my own. Can anyone point me in the direction of any articles, books, threads, websites, etc. where I can start learning about this and really get my teeth into it?

From what I read in TT, I know there are a few of you here that have a good grasp of this. Perhaps someone might like to start a thread where we could start discussing fundamentals from the beginning... I might do this as I have so many questions. But I would like to be able to see if I can make some headway on my own first.


Great forum here guys

Magnus

 

[Grey1]

I have been re-reading through the various threads on TT. I didn't seem to catch-on to what Iraj was espousing on the first read through all the threads. It has taken time for Iraj's message(s) to get through. The most significant, bar none, is the knowledge and use of fundamentals [especially with his latest posts in the Where is the market heading?... thread].

I am not totally new to trading. However, I am totally new fundamentals in every way. I see two types of fundamentals: one is the fundamentals of stocks - I have no problems with learning this, I have a few books, there are various pricing models, Iraj has mentioned CAPM (which I have started reading up on) - and so have an idea on how to go about this; second is the fundamental factors that drive the market(s) as a whole.

Learning about the fundamentals that drive the market is where I am really struggling at the moment. The last couple of days I have been searching the interweb, trying to find information about how to interperet events and how they affect the market. Unfortunately, so far I have only been able to find information on the fundamentals that affect stock prices.

The one thing I know I have learned from TT is (and I am in no doubt that I will learn more as I continue to re-read threads here on TT)... It is not the news/interest rate change/price of oil/etc that tell you whether the market is strong/weak and where it's going, but the reaction of the market participants.

Iraj said the following in his post here (incase it's deemed as taken out of context) today...



I am not sure how the dollar affects the market... not sure how interest rates affect the market... financial rallying, I assume, is stocks rallying - indicative of a strong market (when taken into account with other factors) I presume... not sure how oil or gold affects the market...

I'm don't wish to be spoon-fed. I am looking for sources where I can find out how to interperet these things on my own. Can anyone point me in the direction of any articles, books, threads, websites, etc. where I can start learning about this and really get my teeth into it?

From what I read in TT, I know there are a few of you here that have a good grasp of this. Perhaps someone might like to start a thread where we could start discussing fundamentals from the beginning... I might do this as I have so many questions. But I would like to be able to see if I can make some headway on my own first.


Great forum here guys

Magnus

Stock FA is simple ,, it is all over the internet.
Market FA can be learned using a combination of TA and FA with FA having the last say through MEDIA and ANALYSTS who are well known in this game,,,

We have 70 000 traders here but you donot read or take notice of every body's view ,, you probably only listen to hand full of traders and is the same for market direction ,, you listen to those economist with credibility and follow the top 5 hedge fund managers like soros who made billions last year,, they lead other managers follow

This is a very simple approach for those who donot have the appropriate education in finance

Grey1

 

[belflan]

the top 5 hedge fund managers like soros who made billions last year,, they lead other managers follow

Hi Iraj, hope your well

who are the other 4

thanks
belflan

 

[firewalker99]

We have 70 000 traders here but you donot read or take notice of every body's view ,,

Grey1

As of today we have +95000 actually
But I think the number of real traders actually make a profit comes down to a very small group of people...

Let's not forget there are a lot of hedge funds out there that lost double digit profits last year. Or worse.

 

[Yuppie]

Well..

Hi Iraj, hope your well

who are the other 4

thanks
belflan

Still following this up but another one seems to be Robert Rodriguez...

Magnus

 

[Glenn]

Let's not forget there are a lot of hedge funds out there that lost double digit profits last year. Or worse.

Very true FW. Did you hear why that happened ?
In many hedge funds there has been a lot of focus on the use of quants who produce trading models, all based upon highly sophisticated maths i.e. technical analysis.
What they failed to do was to take account of what was happening in the real world (e.g. credit bubble) as their models could not include such information.
As a senior HF manager said, the quants lacked 'adult supervision'.

Glenn

 

[belflan]

As a senior HF manager said, the quants lacked 'adult supervision'.

lol..

sometimes i think i am trying to learn a redundant skill, and that all trading will go auto..

then i read something like this and it give me heart to continue

cheers
belflan

 

[firewalker99]

Very true FW. Did you hear why that happened ?
In many hedge funds there has been a lot of focus on the use of quants who produce trading models, all based upon highly sophisticated maths i.e. technical analysis.
What they failed to do was to take account of what was happening in the real world (e.g. credit bubble) as their models could not include such information.
As a senior HF manager said, the quants lacked 'adult supervision'.

Glenn

Yes I hear what you're saying. Unfortunately building a mathematical predictive model is not what TA is about. If you're trying to use TA to predict each and every turn, you'll going to put yourself on the wrong side of the market a lot of the time.

I think I'm beginning to see why you guys use fundamentals here, it's because of a basic flaw in the thinking what TA should offer. TA should be used as an aid in determining what to do in advance, but not to tell what is about to happen. It might sound as a small difference, but is has deep implications. It means you should always assume a neutral stand and act on what the market tells you, don't what you think or want the market to do.

 

[Glenn]

.....TA should be used as an aid in determining what to do in advance, but not to tell what is about to happen.

I would change one word of that, from "should" to "can only", and then agree that there is a basic flaw in the thinking what TA should offer.
I'm as much technically inclined as you are and I can trade well enough without simple or complex fundamentals in the short term. All I can say is that there have been periods during my 11 years trading when I used technicals only and on balance the addition of some form of fundamental input to the equation makes a positive difference to the outcome, especially in the longer term.

Glenn

 

[firewalker99]

I would change one word of that, from "should" to "can only", and then agree that there is a basic flaw in the thinking what TA should offer.
I'm as much technically inclined as you are and I can trade well enough without simple or complex fundamentals in the short term. All I can say is that there have been periods during my 11 years trading when I used technicals only and on balance the addition of some form of fundamental input to the equation makes a positive difference to the outcome, especially in the longer term.

Glenn

Just curious, but what kind of 'fundamental input' are you talking about then?
Corporate earnings, global state of the economy, yield curve, interest rates,... ?

 

[Glenn]

Just curious, but what kind of 'fundamental input' are you talking about then?
Corporate earnings, global state of the economy, yield curve, interest rates,... ?

I think it's best to stick with what gets brokered here in TT because otherwise it will branch off all over the place.

1. Stocks. Grey1 for example has posted lists of stocks which are fundamentally weak and fundamentally strong. As ( I think) you don't trade stocks then this may not be of interest but most of TT is about stock trading. These lists are for use in taking longer term positions using a basket of stocks. In an up market, go long fundamentally strong stocks, in a down market go short weak ones. This is why Grey1 shorted the Financials back in September and made a packet in so doing.

2. Market - You've listed some criteria and they are all applicable plus others. The skill is in sorting the wheat from the chaff, and CNBC helps with this. Granted there is a lot to mislead and a lot to ignore (perhaps you'd call that noise in TA) but nonethless there is important stuff in there. The key is to understand but not interpret the information but to be aware of it and it's timing, and gauge response to it.

As you have arrived here a bit late you've missed much in terms of discussion unless you've gone back through the threads. Unfortunately FA can be just as complex, if not more far so than TA and there are no simple answers.
It's a bit like asking would you have bought a house 12 months ago ?- if not, why not.
It's a trade like any other. But when every man and his dog are buying houses to rent out you know there's something amiss.

Glenn

 

[firewalker99]

I think it's best to stick with what gets brokered here in TT because otherwise it will branch off all over the place.

1. Stocks. Grey1 for example has posted lists of stocks which are fundamentally weak and fundamentally strong. As ( I think) you don't trade stocks then this may not be of interest but most of TT is about stock trading. These lists are for use in taking longer term positions using a basket of stocks. In an up market, go long fundamentally strong stocks, in a down market go short weak ones. This is why Grey1 shorted the Financials back in September and made a packet in so doing.

True. Some sectors are leaders, others are laggards... although I don't trade stocks, I gauge the strength of the averages (the dow industrials and the transports) to see what's happening. The higher low in March on the transports confirmed the strength, although that might not have been visible on the industrials because it went about as low as in January.

2. Market - You've listed some criteria and they are all applicable plus others. The skill is in sorting the wheat from the chaff, and CNBC helps with this.

:-0 CNBC?! Sorry, no words for this! I wonder why our those analysts out there, have a paid job as an analyst and aren't trading the market themselves.

Granted there is a lot to mislead and a lot to ignore (perhaps you'd call that noise in TA) but nonethless there is important stuff in there.

There is no noise. The markets move in a very orderly way

The key is to understand but not interpret the information but to be aware of it and it's timing, and gauge response to it.

As in many endeavors, that's the key indeed.

As you have arrived here a bit late you've missed much in terms of discussion unless you've gone back through the threads. Unfortunately FA can be just as complex, if not more far so than TA and there are no simple answers.

No problem, I understand you can't repeat all that's been said before, let alone summarize the methods you guys use in a couple of sentences.

It's a bit like asking would you have bought a house 12 months ago ?- if not, why not.
It's a trade like any other. But when every man and his dog are buying houses to rent out you know there's something amiss.
Glenn

At least we share the contrarian view then

 

[Yuppie]

Oil...

Okay, after a lot of searching, I found the following article (which can be found here)...

"Ever since the price of crude oil started growing there has been talk about the price of oil affecting the share market and your investments. Now if you think about it logically it does sound like it would make an affect. If it costs a company more to run the company because oil prices are changing then it sounds like it would affect the share price. Same goes for the idea that people will be less or more likely top purchase shares in a company that has something to do with oil. So for instance would you invest in a company which sold hose sockets if you were in a draught? However is this theory about crude oil price affecting the share market actually real?

The rational behind this theory is that because many companies freight their products, they have to pay more to transport the products when price of oil goes up so does the transportation cost. This of course drives up the price of the product. So if the company wants to keep the price of their product at the same level, there will be less corporate profit and the share prices will go down after that. Makes sense right? Well maybe not!

Companies do tend to put up the price of their product or service if the price of providing it goes up. So the profit margin will stay at approximately the same. However if the mood of the population, and in particular the stock market investor population, changes about the product the industry might suffer.

Yes global events that affect the price of products like oil (think about Hurricane Katrina) do affect the investment mood. When there is a massive climb or dip people and investment companies tend not to change their portfolio around too much. But however when something grows in price over time people is less likely to react. We all know that the price of oil is growing but it is not like when a major event happens.

Straight after an event occurs fear spreads like wildfire. One person’s fear turns into the fear of an entire investment industry. So no one buys or trades, but there are generally lots of people selling. So there is no actual understanding of what is going on. Once the environment calms down so does the market.

So yes in massive bombs the price of oil will affect the price of shares. But in a long term growth situation it won’t matter. The price of oil has almost quadrupled over the last five years. But has the price of shares?

Not really because oil has become an even more precious commodity people want it even more. And owning shares in an oil company will give you that piece of Texas gold that you have been craving. So the price of oil shares hasn’t really changed, and if it has it has grown.

So if we know that market changes will affect the share price because of the mood of people buying and selling shares we can predict the change. If you feel a change in mood, it is almost certain that there will be change in market. So you can sell, but there also is a chance that the price will raise again after too long."

From this article my understanding is that a general rise in oil does not really affect the market (namely, stocks). This is because any costs incurred on the company and its operations by the rising price of oil are passed on to the end consumer.

However, the article also seems to say that a sharp rise or fall in the price of oil does seem to have a knock-on effect on stocks - albeit not long-lasting. This seems to tie in with this excerpt from an article on MSNBC (full article can be found here)...

"But with oil prices pulling back sharply Thursday, stocks took off, and they continued their run into Friday’s session before the rally stalled."

This seems to confirm that a sharp drop in oil prices would generally cause stocks prices to rise - and vice versa. But, it seems to me, that the interpretation of what happens in the oil-stock relation is what is critical... as demonstrated by Iraj here. Iraj stated...

"US attacked an Iranian boat which pushed the price of the OIL by 3$ pushing the market down but still market ignored all the bad news and rallied to close in positive. THIS IS NOT THE SIGN OF A WEAK MARKET and this market MUST NOT BE SHORTED for LONG PERIOD,.."

Think I am starting to see how the price of oil and stocks relate to each other...


Magnus

 

[Yuppie]

Gold...

Found an article by a private individual on Gold-Stock Market correlation (full article on blog can be found here). I'll just quote some of the main points made in the article...

There’s been an inverse relationship, such that when gold rises, the market is generally falling and vice versa.

Gold is traditionally seen as a hedge against inflation, and inflation typically is seen as being negative for the stock market.

Also, in uncertain economic times (especially with a falling US Dollar), gold is a more attractive investment than US Stocks and so the two asset classes, much like stocks and bonds, compete for your investment capital.

The chart below that I 'borrowed' gives a visual idea of the correlation... So, inflation is bad for the market, and thus gold is seen as a hedge because of its residual (or intrinsic) (I think) value. "uncertain times", I presume, would encapsulate such things as war or recession - not sure what else though.

The recent fall of gold prices has contributed – with other factors – to a rise in the current stock market since March.

While there may be some correlation between gold prices and the US Stock Market, gold prices are much more inversely correlated with the US Dollar Index.

So the chart below shows the inverse-relationship between gold and the stock market. The fairly rapid fall in the price of gold while the market rises from the low in March. And apparently the US Dollar is even more inversly correlated with gold than the stock market is - more on this later...

 

[Yuppie]

Gold <-> Dollar...

The gold-dollar correlation was mentioned in my previous post... From the same blog I obtained my previous information from, here is some further analysis (found here)...

Gold traditionally is a hedge against inflation, and inflation often is correlated with a weak dollar and higher commodity prices across the board (which is the environment we see now).

As the dollar declines, commodity prices (including gold) often rally, linking the inverse relationship.

So inflation is often correlated with a weak dollar and higher commodity prices. The attached chart demonstrates the inverse-correlation between gold and the dollar on a monthly chart...

...the value of a US dollar is worth much less in terms of gold prices than it was in 2,000. In 2000, if you were offered $1,000 in gold that you stored away, if you cashed in today, you would get back $4,000 (if converted into dollars). Of course, those dollars are worth less today than they were then, so it may be better to keep the investment in gold!...

Crystal clear.


Magnus

 

[Yuppie]

Re-cap...

So a quick re-cap on what we have so far...

- A general rise or fall in the price of oil does not seem to have much effect on the stock market. Companies factor any increases or decreases in the price of oil, that affect the cost of their product/service, by passing it on to the end consumer. However, sharp rises or falls in the price of oil will usually cause stocks to drop or rally, respectively - but have no long-lasting effect.

- The price of gold and the stock market can be seen to be fairly inversely-correlated. Currently the US Dollar is falling - an indication of uncertain times, as well as inflation. Inflation is generally viewed as detrimental to the stock market and thus gold seen as a hedge against inflation, and stocks in times of uncertainty.

- The US Dollar and the price of gold have a fairly strong inverse-correlation (which ties in with the previous point about a weak dollar often being correlated with inflation; investors will buy more gold as the dollar weakens as a hedge against inflation). Inflation is often correlated to a weak dollar and rising commodity prices. The declines in the dollar correlate with rises in commodities (including gold).


Magnus

 

[Yuppie]

Oil <-> Gold...

A quick detour on the correlation between oil and gold. The article from where I have borrowed these charts and information can be seen here...

One of the most powerful historical commodities interrelationships exists between oil and gold. This is fitting. Oil is the most important commodity on earth since almost everything tangible that we physically move burns oil in the process. And gold has been the ultimate form of money through six millennia of human history, utterly immune to the inevitable debasement and inflation that all paper currencies eventually suffer.

Okay. Building on previous posts.

This key relationship is easiest to understand when expressed as a ratio, the Gold/Oil Ratio or GOR. It simply takes the market price of gold divided by the market price of oil and the result is charted across the seas of time. The really fascinating part is this ratio has traded within a well-defined range since just after World War 2, nearly 60 years. Any trend persisting for this long must be taken seriously by investors.

The GOR can be seen in the second chart below. This is statistical analysis of the gold-oil relationship. Not really the direction I want to head. But it has consolidated understanding so far of market inter-relationships.


Magnus

 

[Yuppie]

Interest Rates...

Following excerpts taken from an article on Investopedia entitled, 'How Interest Rates Affect the Stock Market'...

The interest rate that applies to investors is the U.S. Federal Reserve's federal funds rate. This is the cost that banks are charged for borrowing money from Federal Reserve banks. Why is this number so important? It is the way the Federal Reserve (the "Fed") attempts to control inflation. Inflation is caused by too much money chasing too few goods (or too much demand for too little supply), which causes prices to increase. By influencing the amount of money available for purchasing goods, the Fed can control inflation. Other countries' central banks do the same thing for the same reason.

The first indirect effect of an increased federal funds rate is that banks increase the rates that they charge their customers to borrow money. Individuals are affected through increases to credit card and mortgage interest rates, especially if they carry a variable interest rate. This has the effect of decreasing the amount of money consumers can spend. After all, people still have to pay the bills, and when those bills become more expensive, households are left with less money disposable income. This means that people will spend less discretionary money, which will affect businesses' top and bottom lines (that is, revenues and profits).

Therefore, businesses are also indirectly affected by an increase in the federal funds rate as a result of the actions of individual consumers. But businesses are affected in a more direct way as well. They, too, borrow money from banks to run and expand their operations. When the banks make borrowing more expensive, companies might not borrow as much and will pay a higher rate of interest on their loans. Less business spending can slow down the growth of a company, resulting in decreases in profit.

So inflation is people having too much money for too little goods available. When the Fed increases the interest rate, it has the following effects on businesses: firstly, and directly, it costs businesses more to borrow money (if the company is not already in debt), and therefore stifles growth. Secondly, and indirectly, consumers will have less disposable income for purchasing goods.

So, less money available amongst consumers to buy goods, less growth in companies to produce more goods, and then less revenue for the companies from consumers, ... - viscious circle!

So, how does this affect the stock market?...

If a company is seen as cutting back on its growth spending or is making less profit - either through higher debt expenses or less revenue from consumers - then the estimated amount of future cash flows will drop. All else being equal, this will lower the price of the company's stock. If enough companies experience a decline in their stock prices, the whole market, or the indexes (like the Dow Jones Industrial Average or the S&P 500) that many people equate with the market, will go down.

For many investors, a declining market or stock price is not a desirable outcome. Investors wish to see their invested money increase in value. Such gains come from stock price appreciation, the payment of dividends - or both. With a lowered expectation in the growth and future cash flows of the company, investors will not get as much growth from stock price appreciation, making stock ownership less desirable.

Ah-ha, if a company is not growing then perceived future value is not going to increase. Thus, no incentive to invest in that company. And this, of course, applies to the stock market as a whole.

Furthermore, investing in stocks can be viewed as too risky compared to other investments. When the Fed raises the federal funds rate, newly offered government securities, such Treasury bills and bonds, are often viewed as the safest investments and will usually experience a corresponding increase in interest rates. In other words, the "risk-free" rate of return goes up, making these investments more desirable. When people invest in stocks, they need to be compensated for taking on the additional risk involved in such an investment, or a premium above the risk-free rate.

So as the interest rate is increased, "risk-free" investments (such as T-bills, bonds) become more desirable in tandem with the stock market becoming less desirable.

Keep in mind, however, that these factors and results are all interrelated. What we described above are very broad interactions, which can play out in innumerable ways. Interest rates are not the only determinant of stock prices and there are many considerations that go into stock prices and the general trend of the market - an increased interest rate is only one of them. Therefore, one can never say with confidence that an interest rate hike by the Fed will have an overall negative effect on stock prices.

Noted.


A further piece of information from the London Stock Exchange website, here...

You will sometimes, however, see little move in share prices when, for example, interest rates shift. This is because investors try to anticipate what is going to happen in the next few months and try to move their portfolios in or out of these stocks before the rest of the market catches on. Sometimes, of course, these expectations can be wrong and if this happen, markets can move very sharply.

Magnus

 

[Yuppie]

I could not find anything on the interweb about how employment data affects markets.

From what I can gather, the less unemployment there is, or more specifically, the rate of change of unemployment, gives a guide to the state of the economy. If the number of unemployed is reducing, this is a sign that the economy is getting stronger. And vice versa - increasing unemployment shows weakening economy.

I following is an excerpt from an article on MoneyWeek...

...The only problem is that employment is almost meaningless when it comes to spotting recessions…

Employment and unemployment data are lagging indicators for the economy. That’s because they reflect employment decisions that were often taken some time ago and because people generally base their decisions on the type of conditions they’ve been experiencing. So all that healthy labour numbers tell us is that things have been going well – and we already know that.

In fact, the unemployment rate is so lagging that it generally reaches its low for the cycle just before the economy tips into recession. When you think about it, that makes perfect sense. The cycle tends to go from boom to bust very fast – much faster than people expect. There’s no time for a gradual reduction in the workforce as things deteriorate. Instead, there are sudden, mass layoffs.

There are a handful of employment indicators that are arguably more coincident – in other words, they tell us what’s going on at the moment. It’s just that they tend to be the more detailed ones that people don’t watch so closely. In the US, clues can sometimes be got from the temporary employment numbers. When people want to hire but they’re feeling uncertain, they’ll tend to take on temp staff for a while and make them permanent if things turn out okay.

...

Perhaps more useful is the year-on-year change in initial claims for unemployment insurance. This has a decent – if not perfect – track record of signalling major turning points in the economy.

After reading this, maybe just watching how the market reacts to employment figures is all that is needed...


Magnus

 

[Grey1]

A quick detour on the correlation between oil and gold. The article from where I have borrowed these charts and information can be seen here...



Okay. Building on previous posts.



The GOR can be seen in the second chart below. This is statistical analysis of the gold-oil relationship. Not really the direction I want to head. But it has consolidated understanding so far of market inter-relationships.


Magnus

yuppie

I am glad to see you getting into FA , You wont regret it. We must all use FA and TA together to beat the market year after year after year,,

For intra day trading we of course use less FA than TA but we should always keep our eyes on the oil price.. The relationship is that when OIL goes up stocks fall but if this did not happen and stock still stayed strong then you have one hell of a strong market . THIS IS A FACT .

I have already explained this but I say it again ,,

SPIKE is like a stone thrown in the pool . it has ripple effect, but it does not last depending on the size of the stone,, Now,, let's say you are long stocks and some adverse news hits the market,,, you then close fast and see how the spike ( adverse news in this case ) affects the market let's say 10 min after the spike,, if the market initially goes down by but comes back then your conclusion should be that this market is strong and use the Spike to your advantage. Now this is true in all time frames

Now lets go a bit further,,, market sold off in JAN ,,FED addressed the lack of liquidity by cutting the rate .It took 3 month for market to price in most of the adverse news, we still had a very fragile market but the evidence was growing that every time we were getting the bad news the market was discounting that and was either going up or just closing slightly below previous close. NOW this is where the turnaround in trend is established. ,, remember market is a forward looking discounting mechanism which means automatically adjusts itself to bad news and then immediately LOOKES into future,, The future looks far better with such a LOW interest rate which basically means the mortgage payers will be having extra $ to spend and as a result this should be reflected in the FUTUER CPI .

Anyway ,, this kind of analysis is basic and you don't need to be an economist. However this is important if you want to have a swing trade and go for BIG RUNS and make your wealth ,,

As far as intraday trading is concerned ,, you can keep your eyes on the oil price and if there is any jobless, GDP ,ISM reports give market to digest the news and watch to see if the market is ignoring the news ,, if the news was bad but market ignored it then you have a strong market. Once you establish that then you can use TA for entry which is basically your 10 min indu .
PS:-- I am trying to guide you in taking BIG RUNS from stocks using FA + TA. if you expect to become wealthy intra day trading using TA only then you might as well give your money to me to spend it for you in casino royal . USE A PROVEN TACTIC TO MAKE $$$$,, John Paulson took 3BN in 2007 and 1.5BN in 2006 and he used FA than any other methodology . Phil Falcon made 2 BN in 2008 for his firm with James Simons to bag 1.5BN. Any way .. The evidence is overwhelming


Grey1