For now I rely on the sharing model for reward.
Statistical analysis often looks fancy and impressive, but it’s merely a tool that focuses the message of the market. Statistical understanding without the ability to interpret the messages contained in global capital flows is like saying geologist needs only side-scanning radar to find gold deposits. It gives the impression that finding gold is easy.
Global money flows, particularly private capital, is motivated by reward relative to risk. Learn to follow it, and you’ll always know where the real economy resides. The real economy is a lot different the headline BS verison.
How do you do that? The answer to that question which confounds much of the investment world would be a book all by itself. Most of my understanding has been obtained through practical observation and extensive mathematical testing of market and intermarket trends.
If you’re looking for a place to start and you’re not turned off by books, try John Murphy’s, Intermarket Technical Analysis: Trading Strategies for the Global Stock, Bond, Commodity, and Currency Markets (Wiley Finance).
I have no affiliation with the author.
Hi Eric,
Thank you for your fine work!
As a class of 1979 grad, I have to admit that my statistics is getting a bit rusty. And the computer at Washington University in St. Louis was an IBM 360, so I spent my share of time at a keypunch machine ... as well as waiting for output from the line printer. Wasn't the sort of machine that encouraged a lot of fiddling around with programs, etc. due to the fact that students were not assigned high priorities leading to some lengthy turn-around times.
My point is I can follow most of your analysis, but would be interested if you have any suggested materials I might study to get a better handle on your methodology. Just a thought ... if such materials are available from Amazon.com you could put up a small widget on your blog with suggested books and make some extra money as an Amazon affiliate.
Kindest regards,
Craig
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Thank you for your support,
Eric
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