Thoughts about the markets, automated trading algorithms, artificial intelligence, and lots of other stuff
This was funny.
Even if you think you know what QE2 means, or don't believe that "'The printing money' is the last refuge of failed economic empires and banana republics, and the Fed doesn't want to admit this is their only idea" … Watch this humorous take on what the Federal Reserve is up to, and how we got here.
Like much humor, there is more than a grain of truth in it.
It was made with the Xtranormal text to movie engine.
Chilean miner Edison Peña, who ran constantly when he was trapped in the San José mine, ran the New York marathon today.
In the mine he ran at least 10 kilometers a day, taking between 10 and 12 laps underground, with heavy rubber boots with steel tips. Peña said: “I ran inside the mine … I wanted to give a message to everybody”.
Peña was invited by the organizers of the marathon to be an honored guest, but he asked to participate instead.
It reminds me of something Viktor Frankl said:
"Our attitude towards what has happened to us in life is the important thing to recognize.
Once hopeless, my life is now hope-full, but it did not happen overnight.
The last of human freedoms, to choose one's attitude in any given set of circumstances, is to choose one's own way."
~ Victor Frankl, "Man's Search for Meaning"
Chilean miner Edison Peña, who ran constantly when he was trapped in the San José mine, ran the New York marathon today.
In the mine he ran at least 10 kilometers a day, taking between 10 and 12 laps underground, with heavy rubber boots with steel tips. Peña said: “I ran inside the mine … I wanted to give a message to everybody”.
Peña was invited by the organizers of the marathon to be an honored guest, but he asked to participate instead.
It reminds me of something Viktor Frankl said:
"Our attitude towards what has happened to us in life is the important thing to recognize.
Once hopeless, my life is now hope-full, but it did not happen overnight.
The last of human freedoms, to choose one's attitude in any given set of circumstances, is to choose one's own way."
~ Victor Frankl, "Man's Search for Meaning"
The Markets are at recovery highs.
Traders should remember this important phrase: "Don't Fight the Fed". It applies here.
Think of Bernanke as the manager of the world's largest long-only fund. Further, imagine that his goal was to push prices higher. By the way, you don't have to imagine; he said so. To make sure you get the point, he even announced $600 billion of purchases to be made in the next 8-months – that's $75 billion a month. Regardless of whether you think it will work (or if it will be good for the market or the economy), when money is being pumped into the system at this rate, it is difficult to bet against stocks.
In addition, the market tends to do well after the mid-term elections, and going along with that, the 3rd year of a president’s term is historically the strongest.
With all that, it shouldn't surprise you that the stock market continued its bullish ways as investors seemed to applaud the election results, the Fed's second round of quantitative easing, and a decent jobs report.
Let's Look At Some Charts.
The S&P 500 Index broke out above the April high and closed at its highest level in two years. The breakout is significant – if it can hold. Double tops can produce strong pullbacks, but if the breakout holds, the rallies tend to do well. At point “A” below you can see that breakout in March of this year went on to several more weeks of positive gains until the peak in April.
An Influential Market Sector Is Perking Up.
Many traders believe the financial sector is the most influential group in terms of leading the market. Financials underperformed miserably in 2007 and 2008 and overall market performance followed suit. In 2009, financials outperformed and the market recovered a lot of its prior losses. So, where are they now?
The financials broke above key resistance. The Dow Jones US Financial Index finally broke above its key resistance level (marked by the red horizontal line at 271). With Bernanke's announcement of increased liquidity, as if on cue, the financials led on a relative basis last week and pulled the major indices higher with it. That 271 level now becomes excellent support.
Until the bears can tear down support on the financials at that level, it seems pretty solidly bullish. Expect some of the money that rotates out of other sectors to find a home in financials. That should spell solid outperformance in the near-term.
What is Really Out-Performing Year-To-Date?
The following chart illustrates the dominance of commodities so far this year. Check the numbers on the following YTD graphic from Finviz .
Puts things in perspective, and makes me think about inflation.
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
The Markets are at recovery highs.
Traders should remember this important phrase: "Don't Fight the Fed". It applies here.
Think of Bernanke as the manager of the world's largest long-only fund. Further, imagine that his goal was to push prices higher. By the way, you don't have to imagine; he said so. To make sure you get the point, he even announced $600 billion of purchases to be made in the next 8-months – that's $75 billion a month. Regardless of whether you think it will work (or if it will be good for the market or the economy), when money is being pumped into the system at this rate, it is difficult to bet against stocks.
In addition, the market tends to do well after the mid-term elections, and going along with that, the 3rd year of a president’s term is historically the strongest.
With all that, it shouldn't surprise you that the stock market continued its bullish ways as investors seemed to applaud the election results, the Fed's second round of quantitative easing, and a decent jobs report.
Let's Look At Some Charts.
The S&P 500 Index broke out above the April high and closed at its highest level in two years. The breakout is significant – if it can hold. Double tops can produce strong pullbacks, but if the breakout holds, the rallies tend to do well. At point “A” below you can see that breakout in March of this year went on to several more weeks of positive gains until the peak in April.
An Influential Market Sector Is Perking Up.
Many traders believe the financial sector is the most influential group in terms of leading the market. Financials underperformed miserably in 2007 and 2008 and overall market performance followed suit. In 2009, financials outperformed and the market recovered a lot of its prior losses. So, where are they now?
The financials broke above key resistance. The Dow Jones US Financial Index finally broke above its key resistance level (marked by the red horizontal line at 271). With Bernanke's announcement of increased liquidity, as if on cue, the financials led on a relative basis last week and pulled the major indices higher with it. That 271 level now becomes excellent support.
Until the bears can tear down support on the financials at that level, it seems pretty solidly bullish. Expect some of the money that rotates out of other sectors to find a home in financials. That should spell solid outperformance in the near-term.
What is Really Out-Performing Year-To-Date?
The following chart illustrates the dominance of commodities so far this year. Check the numbers on the following YTD graphic from Finviz .
Puts things in perspective, and makes me think about inflation.
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
They say a country gets the politicians it deserves or perhaps it deserves the politicians it gets.
Rather than write a commentary on the politics of an angry electorate, I'll let pictures do the talking.
Here is the cover from this week's Economist.
Here is a chart from the NYTimes showing the historic shift away from Democrats.
Here is a political cartoon showing the pendulum swinging.
And here is a faux Sesame Street reminder of why it is important to play nicely with the other children.
They say a country gets the politicians it deserves or perhaps it deserves the politicians it gets.
Rather than write a commentary on the politics of an angry electorate, I'll let pictures do the talking.
Here is the cover from this week's Economist.
Here is a chart from the NYTimes showing the historic shift away from Democrats.
Here is a political cartoon showing the pendulum swinging.
And here is a faux Sesame Street reminder of why it is important to play nicely with the other children.
Usually, bookmarks are static links. Diphur alerts you when content changes occur on the sites you choose. For example, with Diphur you can?
Here is an example of a message it sent alerting me when a web conference (I was waiting for) went live.
Similarly, here is a sample link showing how Diphur ChangeUps work; click here to see content changes occurring at Yahoo News right now.
Diphur gives you a lot of control about how you specify what you want and when you want it. You can:
There is even a browser bookmarklet that lets you add a bookmark to the page you are viewing without visiting Diphur.
Usually, bookmarks are static links. Diphur alerts you when content changes occur on the sites you choose. For example, with Diphur you can?
Here is an example of a message it sent alerting me when a web conference (I was waiting for) went live.
Similarly, here is a sample link showing how Diphur ChangeUps work; click here to see content changes occurring at Yahoo News right now.
Diphur gives you a lot of control about how you specify what you want and when you want it. You can:
There is even a browser bookmarklet that lets you add a bookmark to the page you are viewing without visiting Diphur.
This video shows how narrow your focus can be. You'll have some fun, and what is revealed at the end is surprising. So pay attention as you watch the video. See what you notice.
It was done by pychologist, magician, and author Prof Richard Wiseman. Click here for background information about this video and the psychology behind it.
Professor Wiseman has more videos here.
In part 1 of this post, we examined Change Blindness and how we can miss incredibly obvious things (right in front of us) if our attention is focused elsewhere.
In an information-rich environment, attention is a scarce and essential resource.
Think how often your focus blinds you to the obvious.
Here are two books written by Professor Wiseman. The first is called Quirkology, and it is about discoving big truths in small things. The second is called 59 Seconds, and it is about little things that make big differences.
and 
Here is a link to a short video about 59 Seconds.
