A Shiny, Trendy Tool Kit

VANTAGEPOINT’S INTERMARKET ANALYSIS Software brings an intriguing, albeit somewhat pricey, tool kit to the short- and intermediate-term trader.

The package analyzes individual markets both individually and in relationship to 25 related markets. Its goal: provide trend forecasts, based on the relationships between these markets.

According to the publisher, Market Technologies (http://www.tradertech.com), VantagePoint predicts short-, medium- and long-term moving averages for up to four days in the future, using the pattern-recognition capabilities of neural networks.

Then, VantagePoint computes a crossover leading indicator, based on the difference between the predicted moving average and today’s actual moving average. Changes in the value of the crossover indicator from one day to the next can help you determine if the market will be choppy, maintain its trend or change direction.

THE DATA IS PURCHASED from third parties. During our test, we used the Commodity Research Bureau (CRB), which provides end-of-day quotes on commodities, stocks, mutual funds, financial indexes, futures, options on futures, major markets, commitments of traders and fundamental data. The CRB charges $25 per month, plus a $60 setup fee, or $300 for a full year, with no setup fee. Other data providers are Commodity Systems and Genesis Financial Technologies.

What I found intriguing comes from my background in econometrics and my joy in solving simultaneous systems of equations. VantagePoint crunches stock, commodity and currency information to generate intermarket analysis, analyzing the relationships between markets and how one might impact the other. If you’re studying one particular market, say heating oil, you can look at reports that are based on the 25 markets that affect it.

THAT SAID, VantagePoint isn’t touted as a trading system. Instead, it shows what the various indicators are predicting the market will do over the next few days. Each user must decide how to apply this knowledge; the program’s goal is to complement one’s strategy, not replace it.

Founder Louis Mendelsohn released the original version of VantagePoint in 1991, so this isn’t a new product by any means. I saw an early version in the mid-1990s, but didn’t review it because the data integration was both difficult and expensive. That’s changed, thanks to high-bandwidth Internet connections.

To allow intra-day forecasts, VantagePoint aims to incorporate real-time data into the program by the end of the year. The current version, 7.09, was released in January 2007. Version 8 is expected during the fourth quarter.

The program is offered in categories, such as health care, financials, technology and basic materials. The Foundation Package will set you back $3,900 for one category; additional categories can be added for $2,500 each. Fees are charged once and include a year of support. Additional support is $249 a year.

CONTINUING OUR COVERAGE of the very quiet conversion of accounts from TD Waterhouse to TD Ameritrade (http://www.tdameritrade.com), we found that the main complaint lodged was the sudden disappearance of Goldman Sachs research. TD Ameritrade spokesman Jim Frowley said that the Goldman contract went through a re-evaluation, and that it will go live again for retail customers on June 12.

According to Frowley, the research was brought back to TD Ameritrade’s institutional customers fairly quickly. He adds that TD Ameritrade will be able to keep the research at least until the end of the year.

E*Trade (http://www.etrade.com) is giving its Power E*Trade Pro users a new quoting tool called Market Depth. This tool includes free access to Nasdaq TotalView and Nasdaq OpenView, which replace Level II quotes. TotalView provides access to every quote and order at every price level in the Nasdaq Market Center. OpenView offers full order-book depth for NYSE and Amex market makers.

Says E*Trade spokeswoman Tina Martineau: “For customers, the value of Market Depth is that they will be able to see every market maker involved in a stock. Also, the Market Depth graph and the momentum bar provide customers with visualization of what they previously had to conceptualize with the data on Level II.”

Posted by on 06/17 at 02:09 PM

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