Martin Armstrong Discussion

[etoimene]

There are directional changes this week (5/6) and next week (5/13). This week's directional change was pretty clear and initially I expected a decline to continue at least into the next turning point (5/20) and potentially through the week of 6/3 which is the strongest target. But there is a directional change for next week and the write-up indicates a rally into 5/20 so that really muddies the water.

I'd say that turning point on last week played well and produced low after 4/22 high and I expect rally into week 5/20.

May was a turning point.

Since previous monthly turning point was definitely low, I would expect May to turn out to be the high. We stil have plenty of time to achieve this.

That brings me to my most painful question. How to identify turning points?

I have seen in manuals and got answers from support that you just have to look at array and identify the highest bar.
Issue with that is that after each close, other period has the highest bar. That way all periods are turning points, which is useless.

How do you identify turning points?

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[s4k4p]

Hi folks,

Anyone here using the Socrates Pro-membership on the XJO?

i am still learning the controls and would love a chat.

[ediface]

ediface, please label all columns, eg type of Reversal. Also please add other metrics, such as length of time it took to reach the Reversal, maximum drawdown from the point of entry, maximum potential profit. Posting real time trades for all to see is needed.

Alex, also please post the next Reversals so we know how far price is expected to go and it can be verified by all users in real time to avoid hindsight bias.

I added the sell price column which is the next reversal in the opposite direction at the given time level. I can only update those number regularly for the DOW, V, WMT, and DIS since those are the ones for which I have subscriptions.

If someone wants to give me formulas for the other metrics then I'll add them to the sheet. What is the benefit of the other data in determining Socrates performance specifically which would be buy the reversal and sell on the stop loss (election of the opposite reversal)?

[ediface]

ediface, would an election of the opposite Reversal really be practical? I can see some huge drawdowns in that kind of strategy. I was thinking of adding max profit and max drawdown on those things so we can consistently assess profit as well as loss.

It doesn't seem practical to me but that is where the stop losses are set by Socrates.

I was thinking of adding max profit and max drawdown on those things so we can consistently assess profit as well as loss.

If according to MA the best way to use Socrates is using the reversals, arrays, and GMW on each of the time levels then it certainly makes sense to put more data points in here to generate better buy/sell signals beyond the basic trading of reversals on a single time level. If there are formulas or examples for Google Sheets available anywhere that would be helpful.

Also, wondering why you chose to have subscriptions in those particular products? Also, if you could post some of your live trading entries and exits, that'd be great, if you are using real money to trade. If not, that's okay too, just that I'd like to know the actual trades made by the Socrates system.

The assets I picked are because I own those particular stocks long-term. Being familiar with those assets I figured it would allow me to more quickly figure out how to best use Socrates for any of my trading strategies. At this point I've only made a few live trades based on Socrates. I bought a few options for V and WMT based on the election of some daily and weekly reversals (I think overall break even on this) and I'm currently holding SDOW based on the turning point last week. I am waiting for the pull-back on DIS since the election of the monthly bullish reversals were more than 1% above them ($120.66). I will certainly post if I trade anything based on Socrates.

My main focus right now (outside of my full time job) is building out a semi-automated, if not fully-automated, trading system. I've got a majority of the core architecture built so now I am working on the trading algorithms. I was hopeful that Socarates would make this a simple task but that's not the case as of yet. I do scrape all the GMW statuses every day from the Global Stocks and can generate performance of those (there is some promise at least with a couple of the statuses on the daily levels). There are some gaps in the data, but I've got a good chunk of it since the middle of February. I want to start scraping all of the assets but I need to add the assets to my database first which I just haven't gotten around to doing.

I'm not a frequent trader and have limited knowledge of TA so I've been trying to build my knowledge base as I build out the system and try to crunch some data to see what gets spit out. Any ideas on how to process Socrates data (or any data for that matter) I'll gladly put the time in to do that since it would certainly be mutually beneficial.

[ediface]

I was under the impression that the stop was meant to be set a little under the elected Reversal. Once a Reversal is elected, it can test the Reversal as support or test the next Reversal, according to how it is supposed to work. Otherwise, it would net too high of a drawdown.

From the user manual:

Thus, when considering Reversals as part of your investment or trading strategy, it is generally advisable to utilize a stop orders. In such case, we typically recommend looking at the closest opposite Reversal in the same time frame you used to enter a market position (e.g. weekly or monthly) as a price point in which to set a stop order

Armstrong has said that the GMW is not a trading tool and should not be used to trade. However, he has said some conflicting things in regards to the arrays and Reversals. He said we never trade in anticipation. Let the market show you the way. On the flip side, he also said the arrays can be traded if the market makes a high or low against a Reversal when it coincides with an array turning point.

This was why I took a position in SDOW: the arrays were showing a significant turning point for last week. If I had used the daily bearish reversals as an entry point as stockpile had mentioned he had used, I would have gotten a bit better of an entry point. So I will be watching those more closely as I consider buy/sell points. I expect the daily bullish reversals to start to come down from where they are now (as of now the next one is at $26,602.43) once Socrates sees a bottom for this current correction I will use that for an exit

This is also why I didn't take positions in DIS/WMT/SPY even though bullish reversals were being generated. The arrays were pointing to a turning point last week for all of these, as well. And since the bearish reversals are supposed to be the stop loss points, I expect that as long as bearish reversals are not elected on DIS/WMT/SPY I should watch for daily bullish reversals to be elected for entry points on those and have a much better entry point than Socrates does.

The problem with options is that even if Socrates is right, theta can eat into value. Other things such as earning reports and other Greeks can really skew the value. I don't know if Socrates is better or worse on individual stocks, as they are not as liquid as generalized asset classes. I would guess it is not as good. I also have not tried the GMW on the daily level, but be careful of using data on specific things that works well when backtesting- it could be just a coincidence.

I'm just monitoring right now and looking for anything that could signal a trade. When looking for an investment using Socrates one suggestion is to start at the GMW and look specifically for yellow or blue statues as they indicate the potential for trading opportunities. This would be verified by going to the arrays and reversals to see what they are indicating. So if they are going to be valid potential trading opportunities then shouldn't they statistically be better than random signaling a potential move in an instrument? At least worth some analysis I figured. Two strong candidates are "Crash Mode" (5%+ decline within 5 days 22.3% of the time - 76 data points) and "Phase Transition" (5%+ rally within 5 days 3-of-7 times with worst performance being 2.52%). Would be nice to be able to back test as far back as Socrates has generated data for, though.

[infofront]

I just let my sub expire recently. Can anyone provide a synopsis of his recent China Trade War private blog post?

[ediface]

Yes, the gmw can be used to find opportunities, assuming they do not have a lower winrate and such. This is assuming it even works at all- it seems more backward looking and a rather lagging indicator that changes often- but again, it needs to go by Reversals for signals.

If the GMW can't be used as some type of a signal as part of a trading algorithm then I'm not sure what value it would have at all. The only way to test that is to gather the data and find its potential as a forward looking indicator which is all I am doing. Ideally, it should be tested as both an indicator for entering and exiting positions, as well as not taking any position at all. So if phase transitions and waterfall statuses are precursor for large moves up and large moves down then I should be able to quantify what it means to fulfill the parameters of those patterns and determine the probability of Socrates correctly predicting that pattern being fulfilled. I may need to look into the arrays and reversals so that I can avoid the scenarios where it may not be fulfilled which is fine. However, if the status doesn't do any better at predicting the future movements of an asset then it's just words and colors on a web page so I can say it feels like X is going to go up or down now.

And by the way, the one who wrote the imgur user guide was me. I only pretended it was not me because I wanted to have it viewed and critiqued objectively instead of being referenced. I will probably delete it soon because it simply does not work.

I'm not sure what user guide you are referring to. The user guide I was quoting is directly from the ask-socrates website.

The 30/70 rule you are referring to is in the user manual, as well:

The Panic Cycle Models identify potential timing of abrupt, possibly dramatic price movement. A Panic Cycle differs from a turning point or a directional change insofar as it does not necessarily reflect a high or low, nor is it attempting to reflect the beginning of a change in trend.

We’ve observed that approximately 70% of the time, a Panic Cycle has been an ‘outside reversal’ (e.g. when price exceeds the previous session high while also penetrating its low), or capitulation, whereas approximately 30% of the time it has been a relatively fast one way move.

(Note: the use of the term ‘reversal’ in the phrase ‘outside reversal’ has absolutely no relation to the term "Reversals" from the proprietary Reversal System available in Socrates – it simply refers to a dramatic price move in which a market price exceeds the previous session high while also penetrating its low).

[Kiwibird]

It really is the reversal system first, then the array and last is the GMW which is usually wrong especially when trading the reversals in reverse. The GMW is only pattern recognition nothing more.  With the GMW it is more accurate on the longer term trends than the shorter term so monthly and up.

Doesn't sound like Armstrong above, he always states; Time first, then Price.  I don't think he'd say the opposite on this forum? Where are the typo's?

But then he did write this:https://www.armstrongeconomics.com/future-forecasts/trading-by-systems/
'..The Reversals are the best tool, and then the cycles help to hone in on the turning points. The Global Market Watch is a pattern recognition model so it is really an alert system that tells you to the look at the detailed reports. We can judge the magnitude of possible moves by looking at the gaps in the Reversal system...'

https://www.armstrongeconomics.com/products_services/socrates/global-market-watch-window-to-the-world-interconnectivity/
"..The Global Market Watch was originally designed for hedge fund use and was inspired by one of our major institutional clients back in 1995. They did not have the time to read a written report on everything in their portfolio. They wanted a quick cheat-sheet that was visually a view of their portfolio. We use to sell this for $250,000 annually...

https://www.armstrongeconomics.com/armstrongeconomics101/economics/the-coming-contagion-cds-sales-double-from-2016/
"..The Global Market Watch shows you the entire world at a glance. This is the best tool that shows when a CONTAGION is starting for it is monitoring everything that moves.."

https://www.armstrongeconomics.com/armstrongeconomics101/training-tools/using-the-global-market-watch/
'..We never buy or sell on this model since it is ONLY an alert and thus a confirming tool. Reversals and Arrays are the only forecasting methods that provide price and time. Th GMW is just an alert which is better on some more developed markets than less traded instruments. It is also more reliable on the higher monthly time levels up to yearly for there the patterns are less complicated.. I have always found the long-term term easier to see than the short-term...'

[Kiwibird]

A recent article from last month;

https://www.bitrates.com/news/p/martin-armstrong-on-cryptocurrencies-and-bitcoin-ask-socrates-and-the-real-economy

ending '..A 237 pages long discussion on Martin Armstrong at bitcointalk.org...'

[psp777]

DOW:
So MA called for a temp low today or tomorrow. The directional change this week was highlighted last week. We bottomed between two weekly bearish reversals today. 23750 will only be tested if we close the week lower than these support levels. He mentioned the Euro elections on May 23. I'm not sure if he is hinting at more capital flowing into the USA after this point or not.

Futures already showing a nice bounce after hours.

Strongest Daily array is this Friday however.
Weekly target was this week and the next key target is June 10-24.

SO, did we just bottom? The safe trade is to wait to see if the reversals hold this week, but then do we bounce until June 10-24? Or, if the reversals fail maybe we test 23750 by June 10-24...

My crystal ball is clouded

[Kiwibird]

Armstrong has stated time before price and price before time. Both ways. For example, he says NEVER trade in anticipation, wait for the reversals to be elected to show you the way. Then he also states the running out of time trades to trade against the Reversals.

The GMW could just tell us when large gaps are in addition to/instead of GMW patterns. Because we only need large gaps, not the other stuff.

A lot of traders can instantly read a chart at a glance. They wouldn't need a GMW, particularly not when it changes frequently. Also, if a lot of stocks are changing eg dropping hard ala contagion, this is just another way of saying that stuff is correlated. Market beta, if you were. I'd like to know which institution(s) bought the GMW for $250k. I never heard of a single one paying that much for Armstrong's stuff.

Armstrong says he spent over $100M on his system but I'd like to know how he managed to trade his way up there to do so. His site also suffers from bugs and such, as many can attest. I don't have proof of this anymore (it might be in my album actually, but its a huge album), but when I was on reddit, a guy was PM-ing me Daily level arrays well before they were out in the Pro version. He hacked it to get to them. He told me that they were in the system but just hadn't been available to the end users yet. They were changing frequently back then too. If I find it, it will be dated, and thus PROVE Armstrong's so called $100M system has a 2-bit cheap security system. Maybe because it really is cheap in the first place.

Interesting! The proof is in the pudding as they say.

He's oft talked about big trades he's handled - https://www.armstrongeconomics.com/armstrongeconomics101/warning-about-people-soliciting-money-for-trading/
'When I shorted the markets for the Russian collapse that manifested into the Long-Term Capital Management Crisis, that was easy to initiate. The hard part came when to take profits and reverse. I sold $1 billion against the Yearly Bullish Reversal in the yen at 147 and had to cope with a contagion that hit every market contrary to all fundamentals. It was a liquidity crisis so everything was sold without logic.
The Japanese yen fell to 103. I covered all my shorts in everything, flipped, and then left the office. It was a gut-wrench trade for I was truly alone. I put in my stops and it would work or not. Very black and white. This was a discipline that I knew I had to walk away and not second guess myself, which would be a disaster. The market would decide. The New Yorker Magazine reported:
“The hedge-fund manager who used to work for Armstrong remembers him coming out of his office in September, 1998, two months after he’d got short in front of the ruble crisis. Monica Lewinsky was on TV. “My oscillators just turned,” Armstrong announced. He booked his profits, pulled out of the market, and went to his beach house, on the Jersey Shore.”

[s29]

DOW:
So MA called for a temp low today or tomorrow. The directional change this week was highlighted last week. We bottomed between two weekly bearish reversals today. 23750 will only be tested if we close the week lower than these support levels. He mentioned the Euro elections on May 23. I'm not sure if he is hinting at more capital flowing into the USA after this point or not.

Futures already showing a nice bounce after hours.

Strongest Daily array is this Friday however.
Weekly target was this week and the next key target is June 10-24.

SO, did we just bottom? The safe trade is to wait to see if the reversals hold this week, but then do we bounce until June 10-24? Or, if the reversals fail maybe we test 23750 by June 10-24...

My crystal ball is clouded

Thanks. Friday is also expiration, so that makes sense.

Still, I'm not convinced by the importance of the EU-elections (I would guess that markets already know that Eurosceptic parties going to gain -surprise).

[MA_talk]

Armstrong has stated time before price and price before time. Both ways. For example, he says NEVER trade in anticipation, wait for the reversals to be elected to show you the way. Then he also states the running out of time trades to trade against the Reversals.

The GMW could just tell us when large gaps are in addition to/instead of GMW patterns. Because we only need large gaps, not the other stuff.

A lot of traders can instantly read a chart at a glance. They wouldn't need a GMW, particularly not when it changes frequently. Also, if a lot of stocks are changing eg dropping hard ala contagion, this is just another way of saying that stuff is correlated. Market beta, if you were. I'd like to know which institution(s) bought the GMW for $250k. I never heard of a single one paying that much for Armstrong's stuff.

Armstrong says he spent over $100M on his system but I'd like to know how he managed to trade his way up there to do so. His site also suffers from bugs and such, as many can attest. I don't have proof of this anymore (it might be in my album actually, but its a huge album), but when I was on reddit, a guy was PM-ing me Daily level arrays well before they were out in the Pro version. He hacked it to get to them. He told me that they were in the system but just hadn't been available to the end users yet. They were changing frequently back then too. If I find it, it will be dated, and thus PROVE Armstrong's so called $100M system has a 2-bit cheap security system. Maybe because it really is cheap in the first place.

Interesting! The proof is in the pudding as they say.

He's oft talked about big trades he's handled - https://www.armstrongeconomics.com/armstrongeconomics101/warning-about-people-soliciting-money-for-trading/
'When I shorted the markets for the Russian collapse that manifested into the Long-Term Capital Management Crisis, that was easy to initiate. The hard part came when to take profits and reverse. I sold $1 billion against the Yearly Bullish Reversal in the yen at 147 and had to cope with a contagion that hit every market contrary to all fundamentals. It was a liquidity crisis so everything was sold without logic.
The Japanese yen fell to 103. I covered all my shorts in everything, flipped, and then left the office. It was a gut-wrench trade for I was truly alone. I put in my stops and it would work or not. Very black and white. This was a discipline that I knew I had to walk away and not second guess myself, which would be a disaster. The market would decide. The New Yorker Magazine reported:
“The hedge-fund manager who used to work for Armstrong remembers him coming out of his office in September, 1998, two months after he’d got short in front of the ruble crisis. Monica Lewinsky was on TV. “My oscillators just turned,” Armstrong announced. He booked his profits, pulled out of the market, and went to his beach house, on the Jersey Shore.”

You would expect for someone like him, he does NOT need to lie about his office:
https://www.armstrongeconomics.com/armstrongeconomics101/new-offices-are-just-about-completed/

---------- from the above link ---------
We have been constructing new offices and we are scheduled to move in December 1st. We have included a room for video. We will be doing more videos on current market trends as part of the Socrates Project. We will begin to launch the higher levels of service as quickly as possible following our move. We will let everyone know as soon as we move in.
----------

When IN FACT, he is just TIME-SHARING the office with others in all likelihood, as shown by trulycoined.


And you would also expect for someone like him, he does NOT need to make up all the readers' comments, when his readers make such flagrant typos that he himself can understand and look at the typos without any problems.  (From my previous posts)

And you would also expect for someone like him, he should have been at least one billion dollar net worth, decades ago, and yet Forbes doesn't report anything on such.

And you would also expect for someone like him, that he claims he had speech recognition fully working back in 1980/1990, that he could have earned incredible amount of money from that alone, and make the world better, when in fact, he is most likely buying off-the-shelf systems from Dragon dictation, or using Siri from Apple or Google.

GIVEN the above lies, it makes me question ANY CLAIMS from Martin Armstrong.  He can make all the flamboyant claims, but if it's not backed by solid proof, I hesitate to believe in him.

That is especially given all of his flip-flopping records of using Cycle Inversion, making up numbers as he goes with 8.6, 3.14, 3.1, 8.615, and two different ECM dates of 10/1/2015, vs 10/7/2015, in HIS OWN writings, (and yet it's "accurate" down to the day), etc.

One can empty-talk all the way, but words are just words.

And honestly, I must say that Armstrong should really get an Award of Con Artist of ALL TIME, given his record of sustaining all the lies of ECM, and the lie of super-computer and AI from 1980, when there was PHYSICALLY impossible on Earth to provide him that much computational power.

He is one of the kind!

[MA_talk]

DOW:
So MA called for a temp low today or tomorrow. The directional change this week was highlighted last week. We bottomed between two weekly bearish reversals today. 23750 will only be tested if we close the week lower than these support levels. He mentioned the Euro elections on May 23. I'm not sure if he is hinting at more capital flowing into the USA after this point or not.

Futures already showing a nice bounce after hours.

Strongest Daily array is this Friday however.
Weekly target was this week and the next key target is June 10-24.

SO, did we just bottom? The safe trade is to wait to see if the reversals hold this week, but then do we bounce until June 10-24? Or, if the reversals fail maybe we test 23750 by June 10-24...

My crystal ball is clouded

Crystal ball?

I stopped reading Armstrong altogether, and stopped trying to decode all of his ambiguous writings.  His writing is like head I win, tail I win too.  He cannot be wrong.  But what are you going to do for trades?

If you need another trading expert to decode Martin Armstrong (the trading expert) who decodes Socrates (the never wrong trading expert), even if all of them are truly trading experts, what do you think the final results that you will get?

It does NOT matter how complicate Armstrong's models and algorithms are.  At the end of the day, you either BUY or SELL.

The only thing that matter to all subscribers and readers is whether you can execute BUY or SELL with profits.

If SO MANY people on this forum AFTER so many years, and AFTER 265 pages of discussion, and NONE of us can state a consistent profit-making trading methodology based on Armstrong's blog, please tell me, what is the value of the subscription?

It's close to zero, if not negative.

Sure, maybe he has a functional AI that can blah, but it's not telling me in clear words, whether I should buy or sell.

[psp777]

Heres' the look for the DOW

[Strike Eagle 26]

There was an easy day trade setup on crude oil for the 14th today where market tested its daily bullish reversal(62.1) you could of shorted the market at that point knowing that the array had a directional change the very next day. As long as the market stayed below that resistance level the risk was to the downside. Reversals are simply key areas of support and resistance and should be traded as such.

IF you trade elected reversals only you need to know that the expected move should occur within 1 to 3 time units so we had previously in the EUR/USD 3 weekly bearish reversals that were elected by just a few ticks the market then rallied for the next 2 weeks testing its weekly bullish and then on the 3rd week started moving lower towards the next weekly bearish, the array can often warn of such an event. So let those elected weekly bearish reversals provide resistance and if the market moves above them the risk is then to the upside. 

[etoimene]

where market tested its daily bullish reversal(62.1) you could of shorted the market at that point

What do you propose for exit points in this case? Obviously, stop loss can be just above. How much? 0.2?
Take profit could be next bearish reversal? Or X times the risk? Or some technical level?

knowing that the array had a directional change the very next day.

What do you conclude from directional change the next day? I see directional changes on both 14th and 15th.
I am still struggling with the arrays. Did you mean the same day?

[psp777]

Well, regarding the DOW it looks like MA has now stated we could head lower...possibly into July....based on the failure to get back above certain levels. I was thinking this all along and was confused by his temp low call the other day. Other cyclical analysis are calling for a much lower levels at least for the next couple of weeks with a near term target on the DOW of 25,000. So MAs most recent "short term bottom" call two days ago...was VERY short term and confusing for me. Nice call nonetheless for day traders as we bounced off of the area between 2 weekly reversals.

The frustrating thing about Socrates for me is that the arrays do seem to pick up on major movements in the market; however, with the term "directional change" not necessarily meaning a true directional change, but rather larger price movement....it is difficult to know which direction. To complicate things a ton of numbers are given "if this then that" idea. Throw in some "cycle inversions" and we could go either direction with the "I told you so" after. I do like how MA has become much more active on his blog during this time however. It appears that Socrates can even give him mixed signals.

So basically failure to get above 26,000 will indicate weakness until July.

[Alex4711]

From my side I was long on QQQ following the elected weekly reversals from April 1st till April 25th. I was shaken out at the beginning of May, but closing winning trades ( I did NOT wait till a bearish reversal has been elected!). Since that time I am out, so far we have neither elected a new bullish reversal nor a bearish one on Nasdaq, so I will wait and see what is the closing on Friday. If it is below the bearish one (what I expect) I will go short, looking also for the 1% Rule.  We will see :-)

[Strike Eagle 26]

where market tested its daily bullish reversal(62.1) you could of shorted the market at that point

What do you propose for exit points in this case? Obviously, stop loss can be just above. How much? 0.2?
Take profit could be next bearish reversal? Or X times the risk? Or some technical level?

knowing that the array had a directional change the very next day.

What do you conclude from directional change the next day? I see directional changes on both 14th and 15th.
I am still struggling with the arrays. Did you mean the same day?

0.2 in this case could of worked but there was a another daily bullish not that far away. You could of bought back against the nearest support level  in this case the pivot point at 61.18  Directional changes usually mean that whatever direction we are in should reverse and back to back directional changes often produce spike highs and lows so the 14th produced a high the 15th and its directional change pointed to a low.

 Regarding the array the most significant turning points that often unfold as main cyclical events tend to be when directional change targets align with main turning points on the top line of the array.