Timing Solution Advanced Version description

Preface

Advanced version of Timing Solution is designed for existing users of Timing Solution software. You have bought it; it means that you know how to work with major modules of Timing Solution, you are able to create your own models and used to get the projection lines. Here you will find some new features such as new charting tool, a new module "Price Pattern Finder", a new block of events in the Model Editor (ULE). You already know what Timing Solution is and how our team works. So be sure that there will be new upgrades/updates/betas - the future development of the program will be now under Timing Solution Advanced. It is a new stage for you and for TS team as we will focus mostly on trading techniques.  

Advanced charting tools

Charting tools module has appeared almost two years ago. Actually I was not happy adding that module - because charting tools were aside of the main stream of Timing Solution idea to forecast market's future movement. Plus I could not find the way to verify them. Advanced charting tools provide you something totally different. They are not only drawing tools able to show something over the price chart, they are something different. They are part of the program that uses the power of your computer to analyze the price history, so they can be adjusted accordingly. These are smart charting tools. Let us look at them.

Charting tools - Fourier string

Suppose you touch the guitar string, and it starts vibrating. How many different sounds do you hear?

First of all, you will hear the main vibration of the string; on the picture above this is the upper vibration involving the whole string length. Besides, you will hear the vibration of the half of the string length; it is the next "octave" of the main sound. Also you will hear 1/3, 1/4 .. length vibrations. These "additions" to the main sound are called overtones. Some overtones sound loudly while others are very quiet; it is the reason why every musical instrument makes its unique sound.

This fact inspired Jean Baptist Fourier to develop Fourier analysis which considers all processes in our Universe as a variation of some string vibration. We can use the charting tool that is nothing else but the application of this idea to the stock market. 

Follow these steps:

1) Click this button:

and highlight the item "Fourier String"

2) The following is very important, pay enough attention to it. You need to choose a string.  As an example, I analyze S&P500. I choose the string that starts at March 14, 2007 (bottom) and continues up to the beginning of March 2008: 

Drag the mouse connecting these two points. Thus you tell the program the length of the analyzing string. It is the only thing that you have to do. Then you will see how the stock market plays this string.

The most fascinating feature of this drawing tool is that you can see immediately how "sounds" this string touched by S&P500:

While you drag the mouse, the program performs a huge amount of calculations: it does Fourier analysis and displays the projection line based on this analysis. If you try any other software package to perform the Fourier analysis, you have to click some buttons, define parameters, etc - each time you would like to do it. Here your dragging the mouse from one edge of the string to another makes the program to perform this procedure hundred times. With Timing Solution Advanced, you can "touch" these cycles literally by your hand.

Now some recommendations:

a) the most important thing is to find the appropriate string (i.e. the time interval). Be ready that sometimes it might be impossible: the stock market might start playing a totally new song that has not been played previously.

b) to enrich your projection line, you may increase the amount of overtones:

"View" option allows you to display these overtones separately.

c) for the data with a strong trend component (like it is in our example) I recommend to vary "Target" option:

Here I set RSI as a target, thus the sound of our string is generated by RSI (which is not a trend indicator).

d) while drawing the string, try to cover turning points outside the string (points A, B, and C in our example):

e) You can vary waveform option:

In the example below I have downloaded Dow monthly for the last 100 years. Set the triangle waveform; as a target set the oscillator with the period of 50 months, let the amount of overtones be 4: 

Do that, and you get "a la" Armstrong business cycle forecast:

The most used options here are the string length (a basic cycle) and the amount of overtones.

Charting tools - Planetary adjusted price chart slice

On March 10, 2008 the Moon was passing the Zodiacal sign of Aries. You know how chaotic the stock market has been then. Let us try to find some regular pattern even at that crazy time. The technique described below helps to find some "anchor" in time, some track of history pattern repetition. You can treat it as the anchor to other dimension. It is the answer to the question what has happened to the stock market when the Moon passed the sign of Aries a month ago, two moths ago, etc. and how we can use that information.

With Timing Solution Advanced, it is very easy to do. Highlight "Planetary adjusted price chart slice" item and drag the mouse starting from March 10,2008 to several weeks ahead:

You will get three pieces of price charts; each of them starts at the moment when the Moon enters Aries:

the first one (the red graph) corresponds to February 11, 2008 - the closest to March 2008 day when the Moon passes Aries;

another one sends us to January 15, 2008; 

and the last one (the blue chart) corresponds to December 19,2007.

Thus we can see three pieces of the same price chart that show us what has happened after the Moon entered Aries.

With this technique, you may find the planetary pattern that repeats itself. Pay attention to the zones where several charts point at the same direction. I highlighted the zone where two price charts show the upward movement:

Now look in the Options for this charting tool:

Here you can vary the amount of price slices to be displayed, the planetary combination and a kind of presentation of these charts.

You can display them in one box. For example, setting the Sun-Sun combination, I can easily display the recent Annual cycles:

Charting tools - Price chart slice

This charting tool allows to find the periods in the price history with similar price charts. 

It covers a popular idea of periodicity and similarities in economic life. You often can hear something like this: look at the Dow price chart in 1908 and at the Dow now (2008); there are some analogies, - and then the conclusion comes.  With this new tool, you will be able to check these ideas quickly; any time you can display different pieces of the price chart.

In comparison to the two charting tools described above, this one requires some manipulations provided by you. You have to do four mouse clicks and some scrolling. Let us do them together.

Your first step is to define the financial instrument and the time interval to find similarities for. Let it be S&P500 from January 20, 2008 till March 7, 2008.

So your first mouse click is around January 20, 2008 to set the beginning of the analyzed piece of the price chart. 

The second mouse click defines the end of this interval:

The second time scale appears on your screen. It is tied to the analyzed price chart (the portion you would like to find the analogies for). 

Now you are ready to search for the most similar patterns in the past. If you move the mouse cursor in any direction, the piece of the price chart corresponding to the beginning of 2008 will  move accordingly.

For your convenience, you will see on the screen two diagrams: a red one that shows the chosen piece of the price chart and a gray one which is the analog price chart. Thus you can visually compare  these two charts:

To scroll along the price chart, use these buttons:

It may take some time while you find the similar slices; sometimes you may find none. Or you go directly to the period that somebody claims as an analog to your analyzed piece of the price chart, - and you will see yourself. 

For our example, finally I have found this pattern in May, 2006: 

Make two mouse clicks to finalize your work (the third click is on the end of a similar price chart slice, and the fourth click is for vertical adjustment of the pattern; move the similar slice vertically a bit till a maximum fit with your original pattern):

Thus these two charts give you some clues regarding possible movement of S&P500 in March  2008 in respect to that analogy in May 2006:

As any charting tools you can vary its parameters like the color of the price chart diagram and enabling/disabling the time scale. 

Price pattern finder

This is a powerful module that allows to reveal similar patterns in the past, much more faster and effectively. Just run this module (Advanced->Price pattern finder), click "Calculate" button and you will see the most similar pattern  (for my example, it took place in 2001):

We call this chart for 2001-2002 "Key chart". The program displays together the original chart and the Key chart, together with their time scales. 

Also, you will see the list of  Key Charts. Look at it. Each record has the ending date of the similar pattern of the price chart, the correlation between the two and the time lag parameter (i.e. how many days ago the similar pattern took place). You can highlight any Key Chart in the list to see it together with the analyzed chart. On the example below, the Key Chart ends on March 31, 2003 which has occurred 1803 days ago ("Time Lag" parameter):

Here are these two charts together:

The list of Key Charts includes similar pattern charts and mirrored charts as well. The mirrored charts are shown at the end of that list.

For example look at the last record:

It sends us to the year 2003-2004, and the chart is mirrored to our current chart:

In this case you may invert the Key Chart:

The most important parameter here that you may vary is:

This is the length of the interval used to find the most similar pattern. Set this pattern at some small value (say 15 bars), and you will get this picture:

The situation in the beginning 2008 bar by bar repeats the price history in February 2006.

See some other features of this module.

In the Options, you can set "Target". By default the program researches the similarity in Close pattern. Also you can use other targets - like finding the repetitive patterns for RSI index.

One more option that allows you to figure out how this technique works:

You can restrict your search by Learning Border Cursor (LBC):

In this example the LBC is set to the end of December 2007. Thus the program is looking for similar patterns among the pieces of the price chart from August 2007 till the end of December 2007.

The data after LBC are "untouched" data, and they are used to figure out the forecasting abilities of the Key Charts.

Fundamentals

The new tab, "Fundamentals", is added to ULE model editor:

As Fundamentals, we take the external factors that might have an effect on the stock market - such as sunspot activity index, the change of the interest rate by the Feds, and others.

For example, the program has as an addition the data on sunspot activity. It will help you to check the hypothesis on the effect of the sunspot activity (Wolf index) to the markets.

You can vary this event. As an example, you may research periods when the sunspot activity is high, say Wolf index is greater than 100. Set "Range" option this way:

You will get:

The sunspot activity or Wolf index and fundamental factors similar to them are considered as continued events - they have some extension in time. There is another kind of fundamental events, instantaneous events. An example of such event is the moment when Federal Reserve and FOMC change Fed Fund rates. You may also research the impact on the stock market of this event.

Download this file

and create two groups of events: FED increase the rate (red) and FED decrease the rate (blue):

Increase/decrease can be defined here:

The last question regarding fundamental is how to update them. The continued data can be updated through the special program, Fundamentals Editor, that is included in Timing Solution Advanced version.

The instantaneous fundamentals can be updated using the regular editor (like Notepad). Check the file fed-changes-fed-funds- rate.fnd_d ; the explanation is there. 

All files with fundamentals are located in the directory c\TimingSolution\Fundamentals\

The *.fnd_d extension is used for instantaneous fundamentals.