Using non linear dynamics and complexity theory to re-interpret the world.
26 August 2013
19 August 2013
A fundamental catalyst to trigger short covering in AUD
A chart I saw on the weekend business show caught my interest. I believe it was sourced originally from Citis. I saw it on Alan Kohler's Inside Business on Sunday morning.
It shows the AUDUSD versus the terms of trade faced by Australia. Combined with the market intel that traders are still positioned at close to record short on the AUD, it suggests a powerful catalyst is at hand to prompt a scramble higher.
It shows the AUDUSD versus the terms of trade faced by Australia. Combined with the market intel that traders are still positioned at close to record short on the AUD, it suggests a powerful catalyst is at hand to prompt a scramble higher.
02 August 2013
16 July 2013
Where has all that ETF gold gone?
A fascinating read is to be had here - http://www.mauldineconomics.com/ttmygh/what-if
But to cut to the chase, there is one chart that sums up the entire piece with quite astonishing implications for the price of physical gold.
But to cut to the chase, there is one chart that sums up the entire piece with quite astonishing implications for the price of physical gold.
15 July 2013
A Free online course in Complex Systems that will transform your thinking about science and certainty
About the Course:
In this course you'll learn about the tools used by scientists to understand complex systems. The topics you'll learn about include dynamics, chaos, fractals, information theory, self-organization, agent-based modeling, and networks. You'll also get a sense of how these topics fit together to help explain how complexity arises and evolves in nature, society, and technology. There are no prerequisites. You don't need a science or math background to take this introductory course; it simply requires an interest in the field and the willingness to participate in a hands-on approach to the subject.
About the Instructor:
Melanie Mitchell is Professor of Computer Science at Portland State University, and External Professor and Member of the Science Board at the Santa Fe Institute. She is the author or editor of five books and over 70 scholarly papers in the fields of artificial intelligence, cognitive science, and complex systems. Her most recent book, Complexity: A Guided Tour, published in 2009 by Oxford University Press, won the 2010 Phi Beta Kappa Science Book Award. It was also named by Amazon.com as one of the ten best science books of 2009, and was longlisted for the Royal Society's 2010 book prize.
Complexity Explorer
In this course you'll learn about the tools used by scientists to understand complex systems. The topics you'll learn about include dynamics, chaos, fractals, information theory, self-organization, agent-based modeling, and networks. You'll also get a sense of how these topics fit together to help explain how complexity arises and evolves in nature, society, and technology. There are no prerequisites. You don't need a science or math background to take this introductory course; it simply requires an interest in the field and the willingness to participate in a hands-on approach to the subject.
About the Instructor:
Melanie Mitchell is Professor of Computer Science at Portland State University, and External Professor and Member of the Science Board at the Santa Fe Institute. She is the author or editor of five books and over 70 scholarly papers in the fields of artificial intelligence, cognitive science, and complex systems. Her most recent book, Complexity: A Guided Tour, published in 2009 by Oxford University Press, won the 2010 Phi Beta Kappa Science Book Award. It was also named by Amazon.com as one of the ten best science books of 2009, and was longlisted for the Royal Society's 2010 book prize.
Complexity Explorer
05 July 2013
Potential head and shoulders set up in the EURAUD targeting 1.3540 region
Following the NFP data on July 5th, this pair has staged somewhat of a recovery, which might be consistent with a test of the neckline after its breach, but I must admit it is a bit of a stretch as the breach is hardly conclusive (see chart).
That said, I notice, after analysis of the volume associated with the head and shoulders in this chart, that it is consistent with the pattern's success.
(From http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:head_and_shoulders_t Volume: As the Head and Shoulders pattern unfolds, volume plays an important role in confirmation. Volume can be measured as an indicator or simply by analyzing volume levels. Ideally, but not always, volume during the advance of the left shoulder should be higher than during the advance of the head. This decrease in volume and the new high of the head, together, serve as a warning sign. The next warning sign comes when volume increases on the decline from the peak of the head. Final confirmation comes when volume further increases during the decline of the right shoulder.
UPDATE 11 July 2013
Massive volatility in FX markets as FOMC inspired short covering in EUR and gold sends markets reeling. From the point of view of the potential head and shoulders in the EURAUD, we have now seen the neckline clearly broken and the rally back now has retested the breakdown. The risk is now clearly defined at 1.4250 as the top of the left shoulder which should not be exceeded if the pattern is to play out. (see chart)
UPDATE 13 July 2013
The head and shoulders pattern has been invalidated and I have stopped out of any short EURAUD positions. In fact, by trading and closing above 1.44 on a weekly basis and invalidating the H&S pattern, there is a strong case for expecting a significant move higher in the EUR versus the AUD in the medium term to about 1.4900 trend channel resistance. (see chart)
Massive volatility in FX markets as FOMC inspired short covering in EUR and gold sends markets reeling. From the point of view of the potential head and shoulders in the EURAUD, we have now seen the neckline clearly broken and the rally back now has retested the breakdown. The risk is now clearly defined at 1.4250 as the top of the left shoulder which should not be exceeded if the pattern is to play out. (see chart)
UPDATE 13 July 2013
The head and shoulders pattern has been invalidated and I have stopped out of any short EURAUD positions. In fact, by trading and closing above 1.44 on a weekly basis and invalidating the H&S pattern, there is a strong case for expecting a significant move higher in the EUR versus the AUD in the medium term to about 1.4900 trend channel resistance. (see chart)
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