Thoughts about the markets, automated trading algorithms, artificial intelligence, and lots of other stuff

  • Are You Inspired By the Purpose and Actions of Japanese Workers?

    Japanese Workers Dressing to Avoid Radiation Damage - from Reuters
    Imagine what was going on in the minds of the initial 50 Japanese workers who stayed behind (while everyone else was evacuated ) to try and fix things at the nuclear reactor after the earthquake …

    • Were they going to die, or become disabled from the exposure?
    • How much radiation is safe? 
    • What would happen if they didn't choose to go?

    Why would anyone choose to put themselves at that much risk?

    Archimedes said "Give me a lever long enough and a fulcrum on which to place it, and I shall move the world." 

    In this case, the lever was the fate of world, or at least their little corner of the world.  Their actions might save and change millions of lives. 

    They had a purpose.  And once you have a big enough "Why" … the "Hows" seem to take care of themselves.

    You don't have to wait to be a 'hero'.

    On a related note, here is a TED video worth watching.

    It is called: "Life Lessons From a Volunteer Firefighter".


     

    Small Acts matter.  Don't wait.

    Related Info:

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  • Are You Inspired By the Purpose and Actions of Japanese Workers?

    Japanese Workers Dressing to Avoid Radiation Damage - from Reuters
    Imagine what was going on in the minds of the initial 50 Japanese workers who stayed behind (while everyone else was evacuated ) to try and fix things at the nuclear reactor after the earthquake …

    • Were they going to die, or become disabled from the exposure?
    • How much radiation is safe? 
    • What would happen if they didn't choose to go?

    Why would anyone choose to put themselves at that much risk?

    Archimedes said "Give me a lever long enough and a fulcrum on which to place it, and I shall move the world." 

    In this case, the lever was the fate of world, or at least their little corner of the world.  Their actions might save and change millions of lives. 

    They had a purpose.  And once you have a big enough "Why" … the "Hows" seem to take care of themselves.

    You don't have to wait to be a 'hero'.

    On a related note, here is a TED video worth watching.

    It is called: "Life Lessons From a Volunteer Firefighter".


     

    Small Acts matter.  Don't wait.

    Related Info:

    Enhanced by Zemanta

  • Capitalogix Commentary 03/21/11 – So, Do You Buy or Do You Sell?

    For the first time in a long time, the S&P 500 Index experienced a small corrective phase.  The Index fell 7% from its high, set on February 28th. 

    Considering the state of global unrest, the pull-back was reasonably small and orderly. So, is the selling over?  David Stendahl, one of the authors of Dynamic Trading Indicators, sent me this chart signaling a potential short term bullish pivot low.

    Below is daily chart of the Index and a short term momentum indicator that focuses on mean reversion (David calls it a "Value Chart").  In general, Value Charts respond to extreme movement away from recent norms and signals when the market is likely to reverse course. 

    There is a short term bullish divergence between price action and the Value Chart indicator. I've marked the last three signals, and you can see that they preceded bullish moves.

    110318 Stendahl Value Chart on the SP500
    The weekly chart, however, shows that the S&P 500 is sitting on support with a number of technical indicators poised to turn to the downside.  So, if you are expecting another test lower, there is your cue for caution.

    I'm curious whether the market will trigger buyers looking for a bargain, or whether another push lower will result in some real selling?

    Is Lumber Sending a Bullish Signal About the Broader Market?

    If you are looking for a potentially bullish early indicator, then Lumber may be sending you a signal.  It is back near its recent highs.  If it can break through to the upside, traders may take that as a good sign of market strength. 

    110320 Lumber
    Why do traders consider lumber an early indicator for the broader market?  Since lumber is a primary raw material in the early stages of new construction, the logic is that lumber purchases signal new construction.

    What Can Copper Tell Us?

    Like Lumber, traders also look to Copper as another early indicator of new construction because it commonly used in things like wires and pipes.  In addition, the Copper/Gold Ratio is an interesting composite measure of economic activity.  The chart below shows weakness and a negative divergence of the Copper/Gold Ratio (in comparison to the S&P 500 Index) since last October.  Most recently, this ratio has been falling steeply again.  We will see if that is an early indicator of broader market weakness?

    110320 Copper-Gold Ratio Turning Down
    A similar flattening of trading range occurred in the Financial Sector as well.

    What Does the Financial Sector Tell Us?

    Financials often lead rallies higher.  The logic is that banks make more money when they are lending, doing deals, and helping companies go public.  In 2011, investors have been hesitant to buy into further gains in this sector.  However, price just put in a volume reversal. 

    110320 Financials Make a High Volume Bullish Reversal
    In bull markets, this is where the buying comes in.  So, let's see how this sector responds.  A move down from here would hurt the bullish case.

    Lots of Speculation about Japan.

    110320 Barrons-Japan-Cover When disaster stikes a first world country with a first world economy, there is little doubt about re-building.  It will happen.  The question investors are asking is how they can profit from it?

    Someone called me last week and said "I feel terrible for the people and the tragedy, but I also expect to hear that Hank Paulson ends up making billions of dollars on it next year."

    That is the mindset of someone looking to put money back to good use.  There is still a lot of money sitting on the sidelines.  Where will it go to work?

    Do you see a rush to invest it in the U.S. equity markets (as we face the end of QE2)?  Do you see a rush back into Gold and Silver? 

    It could be we are about to see an opportunistic shift.  It is worth watching where money flows.

    Business Posts Moving the Markets that I Found Interesting This Week:

    • Buffett Cleans Up On His Derivatives Bet. (Fortune)
    • Why the Definition of Probability Matters? (von Mises)
    • Reforms Needed to Nurture Capital Markets as Credit Demand Grows. (FT)
    • The High Priest of S&P 500 Statistics. (WSJ)
    • How to Invest in Japan's Re-Building and Resilience. (Barron's)
    • More Posts Moving the Markets.

    Lighter Ideas and Fun Links that I Found Interesting This Week

    Related articles
    Enhanced by Zemanta

  • Capitalogix Commentary 03/21/11 – So, Do You Buy or Do You Sell?

    For the first time in a long time, the S&P 500 Index experienced a small corrective phase.  The Index fell 7% from its high, set on February 28th. 

    Considering the state of global unrest, the pull-back was reasonably small and orderly. So, is the selling over?  David Stendahl, one of the authors of Dynamic Trading Indicators, sent me this chart signaling a potential short term bullish pivot low.

    Below is daily chart of the Index and a short term momentum indicator that focuses on mean reversion (David calls it a "Value Chart").  In general, Value Charts respond to extreme movement away from recent norms and signals when the market is likely to reverse course. 

    There is a short term bullish divergence between price action and the Value Chart indicator. I've marked the last three signals, and you can see that they preceded bullish moves.

    110318 Stendahl Value Chart on the SP500
    The weekly chart, however, shows that the S&P 500 is sitting on support with a number of technical indicators poised to turn to the downside.  So, if you are expecting another test lower, there is your cue for caution.

    I'm curious whether the market will trigger buyers looking for a bargain, or whether another push lower will result in some real selling?

    Is Lumber Sending a Bullish Signal About the Broader Market?

    If you are looking for a potentially bullish early indicator, then Lumber may be sending you a signal.  It is back near its recent highs.  If it can break through to the upside, traders may take that as a good sign of market strength. 

    110320 Lumber
    Why do traders consider lumber an early indicator for the broader market?  Since lumber is a primary raw material in the early stages of new construction, the logic is that lumber purchases signal new construction.

    What Can Copper Tell Us?

    Like Lumber, traders also look to Copper as another early indicator of new construction because it commonly used in things like wires and pipes.  In addition, the Copper/Gold Ratio is an interesting composite measure of economic activity.  The chart below shows weakness and a negative divergence of the Copper/Gold Ratio (in comparison to the S&P 500 Index) since last October.  Most recently, this ratio has been falling steeply again.  We will see if that is an early indicator of broader market weakness?

    110320 Copper-Gold Ratio Turning Down
    A similar flattening of trading range occurred in the Financial Sector as well.

    What Does the Financial Sector Tell Us?

    Financials often lead rallies higher.  The logic is that banks make more money when they are lending, doing deals, and helping companies go public.  In 2011, investors have been hesitant to buy into further gains in this sector.  However, price just put in a volume reversal. 

    110320 Financials Make a High Volume Bullish Reversal
    In bull markets, this is where the buying comes in.  So, let's see how this sector responds.  A move down from here would hurt the bullish case.

    Lots of Speculation about Japan.

    110320 Barrons-Japan-Cover When disaster stikes a first world country with a first world economy, there is little doubt about re-building.  It will happen.  The question investors are asking is how they can profit from it?

    Someone called me last week and said "I feel terrible for the people and the tragedy, but I also expect to hear that Hank Paulson ends up making billions of dollars on it next year."

    That is the mindset of someone looking to put money back to good use.  There is still a lot of money sitting on the sidelines.  Where will it go to work?

    Do you see a rush to invest it in the U.S. equity markets (as we face the end of QE2)?  Do you see a rush back into Gold and Silver? 

    It could be we are about to see an opportunistic shift.  It is worth watching where money flows.

    Business Posts Moving the Markets that I Found Interesting This Week:

    • Buffett Cleans Up On His Derivatives Bet. (Fortune)
    • Why the Definition of Probability Matters? (von Mises)
    • Reforms Needed to Nurture Capital Markets as Credit Demand Grows. (FT)
    • The High Priest of S&P 500 Statistics. (WSJ)
    • How to Invest in Japan's Re-Building and Resilience. (Barron's)
    • More Posts Moving the Markets.

    Lighter Ideas and Fun Links that I Found Interesting This Week

    Related articles
    Enhanced by Zemanta

  • Capitalogix Commentary 03/14/11 – Are Traders as Scared as They Should Be?

    Last week had massive earthquakes, a nuclear reactor melt-down, and Mid-East turmoil spiking gas prices higher.  So, investors should be scared … right?

     

    110313 Japan's Tsunami - Sutovec Cartoon

     

    Japan is one of the world's largest economies; so, imagine what you'd think if an event like that occurred here.  Think of the lost productivity, business closings, insurance liability, global supply-chain issues, etc.  Still, reports are that the effects won't be as bad as they could have been.

    As a trader, I'm watching the response to the news (rather than simply responding to news itself).

    So far, there hasn't been much fear.

    Perhaps Investors Aren't as Scared as They Should Be?

    The VIX is regarded as the "Fear Index" by many.  Consequently, you might expect it to be screaming "Fear" after the decent-size market drop in the context of recent world events.

    Instead of a "Day of Rage", we have seen raging tranquility and a market acting like it is relatively undaunted by concerns.

    So, let's look at a VIX Futures contract chart to see what the VIX is saying …

    110313 Fear Index Still Showing Calm

    With the growing sense that the market is overdue for a correction, some investors may be losing confidence that the market's rally will continue.  Nonetheless, there hasn't been much selling pressure.  In fact, the markets have shown remarkable resiliency and ability to attract buyers.

    Here is a daily chart of the S&P 500 Index.

    110314 SP500 at Decision

    Viewed another way, this is where Bulls will likely try to defend the up-trend.  Will the market attract buyers … or will risk start to weigh more than its potential reward?

    Business Posts Moving the Markets that I Found Interesting This Week:

    • QE3: Will The End Of QE2 Ruin The Party For U.S. Stocks?  (Forbes)
    • What's the Point of the Financial Crisis Report?  (Atlantic)
    • High-Frequency Traders Transacting Blocks of Shares Away From Exchanges. (Bloomberg)
    • It's the Inequality, Stupid: Eight Charts Worth a Glance.  (MotherJones)
    • Did 'Financial Terrorism' by Outside Forces Cause The Economic Crash?  (TheWeek)
    • More Posts Moving the Markets.

    Lighter Ideas and Fun Links that I Found Interesting This Week

    Related articles
    Enhanced by Zemanta

  • Capitalogix Commentary 03/14/11 – Are Traders as Scared as They Should Be?

    Last week had massive earthquakes, a nuclear reactor melt-down, and Mid-East turmoil spiking gas prices higher.  So, investors should be scared … right?

     

    110313 Japan's Tsunami - Sutovec Cartoon

     

    Japan is one of the world's largest economies; so, imagine what you'd think if an event like that occurred here.  Think of the lost productivity, business closings, insurance liability, global supply-chain issues, etc.  Still, reports are that the effects won't be as bad as they could have been.

    As a trader, I'm watching the response to the news (rather than simply responding to news itself).

    So far, there hasn't been much fear.

    Perhaps Investors Aren't as Scared as They Should Be?

    The VIX is regarded as the "Fear Index" by many.  Consequently, you might expect it to be screaming "Fear" after the decent-size market drop in the context of recent world events.

    Instead of a "Day of Rage", we have seen raging tranquility and a market acting like it is relatively undaunted by concerns.

    So, let's look at a VIX Futures contract chart to see what the VIX is saying …

    110313 Fear Index Still Showing Calm

    With the growing sense that the market is overdue for a correction, some investors may be losing confidence that the market's rally will continue.  Nonetheless, there hasn't been much selling pressure.  In fact, the markets have shown remarkable resiliency and ability to attract buyers.

    Here is a daily chart of the S&P 500 Index.

    110314 SP500 at Decision

    Viewed another way, this is where Bulls will likely try to defend the up-trend.  Will the market attract buyers … or will risk start to weigh more than its potential reward?

    Business Posts Moving the Markets that I Found Interesting This Week:

    • QE3: Will The End Of QE2 Ruin The Party For U.S. Stocks?  (Forbes)
    • What's the Point of the Financial Crisis Report?  (Atlantic)
    • High-Frequency Traders Transacting Blocks of Shares Away From Exchanges. (Bloomberg)
    • It's the Inequality, Stupid: Eight Charts Worth a Glance.  (MotherJones)
    • Did 'Financial Terrorism' by Outside Forces Cause The Economic Crash?  (TheWeek)
    • More Posts Moving the Markets.

    Lighter Ideas and Fun Links that I Found Interesting This Week

    Related articles
    Enhanced by Zemanta

  • Picture of a Person Not Waiting In Line To Get a New iPad

    The lines to get the new iPad were long.  Seemingly, everyone wanted one.

    Well, not everyone …

    110312-Not-In-Line-to-Buy-a

    He probably isn't trying to steal Wi-Fi either.

    Something to Think About.

    Apple stock is at about $350 per share right now. If you had invested in Apple instead of buying that Apple PowerBook G3 250 in 1997, you'd have stock valued at $330,563. 

    To see other comparisons like this, read "What If I Bought Apple Stock Instead"?

    Related articles
    Enhanced by Zemanta

  • Picture of a Person Not Waiting In Line To Get a New iPad

    The lines to get the new iPad were long.  Seemingly, everyone wanted one.

    Well, not everyone …

    110312-Not-In-Line-to-Buy-a

    He probably isn't trying to steal Wi-Fi either.

    Something to Think About.

    Apple stock is at about $350 per share right now. If you had invested in Apple instead of buying that Apple PowerBook G3 250 in 1997, you'd have stock valued at $330,563. 

    To see other comparisons like this, read "What If I Bought Apple Stock Instead"?

    Related articles
    Enhanced by Zemanta

  • Humor: Generate Your Own Malcolm Gladwell Best-Seller Title

    Looking for a new book to read?

    Gladwell is usually a good choice.  He wrote Blink, The Tipping Point, Outliers, and What the Dog Saw. 

    Somehow his books (and their titles) capture the imagination and a spot on bookshelves.

    I showed this to some friends and they thought it sounded interesting. What do you think?

    110311 Gladwell New Best Seller
    Now, you can generate your own New Gladwell Best Seller.  Try it out.  Yes, the 25 alternatives are fake … but they're funny.

     

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  • Humor: Generate Your Own Malcolm Gladwell Best-Seller Title

    Looking for a new book to read?

    Gladwell is usually a good choice.  He wrote Blink, The Tipping Point, Outliers, and What the Dog Saw. 

    Somehow his books (and their titles) capture the imagination and a spot on bookshelves.

    I showed this to some friends and they thought it sounded interesting. What do you think?

    110311 Gladwell New Best Seller
    Now, you can generate your own New Gladwell Best Seller.  Try it out.  Yes, the 25 alternatives are fake … but they're funny.

     

    Enhanced by Zemanta