Even if you are not a baseball fan, here's a statistic that jumps out and demands attention.
When the Texas Rangers competed against the New York Yankees, it marked the greatest disparity in raw dollars between payrolls in the history of playoff baseball, at $152 million.
In addition, there are some fun facts for you to impress your friends. For example, the Rangers could triple every current player's salary, sign Mark Teixeira away from the Yankees, and still have a lower payroll.
Even if you are not a baseball fan, here's a statistic that jumps out and demands attention.
When the Texas Rangers competed against the New York Yankees, it marked the greatest disparity in raw dollars between payrolls in the history of playoff baseball, at $152 million.
In addition, there are some fun facts for you to impress your friends. For example, the Rangers could triple every current player's salary, sign Mark Teixeira away from the Yankees, and still have a lower payroll.
According to Bloomberg,the Federal Reserve and Japanese investors are poised to pass China and become America’s largest creditors following efforts from U.S. policy makers and the Bank of Japan to stimulate growth.
This chart shows the U.S. central bank’s Treasury holdings have risen to a record $821.2 billion, approaching China’s $846.7 billion. The figure for Japan is $821 billion, the most ever. China overtook both the Fed and Japan in 2008 as the communist nation bought dollars to hold down the yuan as a way to aid exporters, funneling the greenbacks into U.S. debt.
Does it seem strange to you that we are about to be our own biggest creditor?
Perhaps, as a sovereign nation, it makes sense if you plan on printing money to pay it back.
According to Bloomberg,the Federal Reserve and Japanese investors are poised to pass China and become America’s largest creditors following efforts from U.S. policy makers and the Bank of Japan to stimulate growth.
This chart shows the U.S. central bank’s Treasury holdings have risen to a record $821.2 billion, approaching China’s $846.7 billion. The figure for Japan is $821 billion, the most ever. China overtook both the Fed and Japan in 2008 as the communist nation bought dollars to hold down the yuan as a way to aid exporters, funneling the greenbacks into U.S. debt.
Does it seem strange to you that we are about to be our own biggest creditor?
Perhaps, as a sovereign nation, it makes sense if you plan on printing money to pay it back.
"If your job is to identify opportunities and risks in the market, you have to recognize that when the Fed is pouring fuel on the fire, when they send their minions out to discuss the Greenspan put, some people rush for the fire hoses … but my job is to go grab some marshmallows and sticks and head over to the Boy Scout jamboree campfire. If your job is a policy analyst, well that’s a different situation. But if you’re an asset manager, you can’t fight the tape constantly. You have to recognize when massive Federal Reserve liquidity is going to goose the market. But I’m not going to argue with people who say this ends badly. Hey, every bull market eventually ends badly. You know, I can’t tell you if it’s a 25% correction or down 1,000 [points]. But you know what? You’ll have plenty of time to make that decision. Right now, as long as they are giving us an opportunity to make some hay, you have to participate while the sun is shining."
Dow Stalls With High Volume Near April High.
With a surge from 10,000 to 11,200, the Dow Jones Industrial Average is trading near its April highs and close to a 52-week high. However, it has started to stall with high volume. The chart shows the Dow battling the 11100 area with above average volume the last seven days. Arthur Hill notes that the trend since late August is still up. Nonetheless, a high volume stall could give way to a short-term reversal that starts a correction. High volume is often present at or near inflection points.
The yellow areas on the chart show volume surges that occurred at turning points.
For now, the Dow has yet to show any signs of weakness on the price chart. The Average established support at 10,900 with two lows over the last few weeks. This support level looks similar to the April support level. Notice how the April support break provided a clear signal. The bulls are in good shape as long as current support holds. A move below 10900 would argue for a correction that would be expected to retrace a portion of the prior advance.
Are there any other clues we can watch?
How Does the Dollar Affect the Dow?
Looking at the charts below, it is easy to see that there is a strong inverse correlation between the U.S. Dollar and the Dow. According to TSP Talk, this is not always the case … but when it is, it does assist us to predict direction changes.
The upcoming quantitative easing (QE2) by the Fed could be seen as a catalyst for the dollar's decline, as more money being pumped into the system means a weaker dollar. If QE2 is priced-in to the market already, then we could have a “buy the news” reaction in the dollar, which in turn would likely hurt the stock market. In the mean time, the trend is clear.
"If your job is to identify opportunities and risks in the market, you have to recognize that when the Fed is pouring fuel on the fire, when they send their minions out to discuss the Greenspan put, some people rush for the fire hoses … but my job is to go grab some marshmallows and sticks and head over to the Boy Scout jamboree campfire. If your job is a policy analyst, well that’s a different situation. But if you’re an asset manager, you can’t fight the tape constantly. You have to recognize when massive Federal Reserve liquidity is going to goose the market. But I’m not going to argue with people who say this ends badly. Hey, every bull market eventually ends badly. You know, I can’t tell you if it’s a 25% correction or down 1,000 [points]. But you know what? You’ll have plenty of time to make that decision. Right now, as long as they are giving us an opportunity to make some hay, you have to participate while the sun is shining."
Dow Stalls With High Volume Near April High.
With a surge from 10,000 to 11,200, the Dow Jones Industrial Average is trading near its April highs and close to a 52-week high. However, it has started to stall with high volume. The chart shows the Dow battling the 11100 area with above average volume the last seven days. Arthur Hill notes that the trend since late August is still up. Nonetheless, a high volume stall could give way to a short-term reversal that starts a correction. High volume is often present at or near inflection points.
The yellow areas on the chart show volume surges that occurred at turning points.
For now, the Dow has yet to show any signs of weakness on the price chart. The Average established support at 10,900 with two lows over the last few weeks. This support level looks similar to the April support level. Notice how the April support break provided a clear signal. The bulls are in good shape as long as current support holds. A move below 10900 would argue for a correction that would be expected to retrace a portion of the prior advance.
Are there any other clues we can watch?
How Does the Dollar Affect the Dow?
Looking at the charts below, it is easy to see that there is a strong inverse correlation between the U.S. Dollar and the Dow. According to TSP Talk, this is not always the case … but when it is, it does assist us to predict direction changes.
The upcoming quantitative easing (QE2) by the Fed could be seen as a catalyst for the dollar's decline, as more money being pumped into the system means a weaker dollar. If QE2 is priced-in to the market already, then we could have a “buy the news” reaction in the dollar, which in turn would likely hurt the stock market. In the mean time, the trend is clear.
The Q3 2010 IntraLinks Deal Flow Indicator™ (DFI) was just released and reports a 38 percent increase in global M&A deal activity in Q3 2010 versus Q3 2009. In the last quarter, deal activity is up nine percent compared to Q2 2010, a 68 percent increase from the Q1 2009 low.
Results show six straight quarters of growth in M&A deal volume, with a 68 percent increase from Q1 2009
The overall positive trends are consistent with the following factors in the marketplace:
General improvement and stability in the market
Impending tax environment changes and stockpiles of committed capital have provided the return of private equity buyers and sellers
Reduced strategic buyer fear of “double dip” recession resulting in more exploration of opportunities to supplement slow organic growth prospects and enter new markets.
The Q3 2010 IntraLinks Deal Flow Indicator™ (DFI) was just released and reports a 38 percent increase in global M&A deal activity in Q3 2010 versus Q3 2009. In the last quarter, deal activity is up nine percent compared to Q2 2010, a 68 percent increase from the Q1 2009 low.
Results show six straight quarters of growth in M&A deal volume, with a 68 percent increase from Q1 2009
The overall positive trends are consistent with the following factors in the marketplace:
General improvement and stability in the market
Impending tax environment changes and stockpiles of committed capital have provided the return of private equity buyers and sellers
Reduced strategic buyer fear of “double dip” recession resulting in more exploration of opportunities to supplement slow organic growth prospects and enter new markets.
Daniel Simons' experiments on visual awareness have become famous. The primary conclusion drawn from his research is that we can miss incredibly obvious things, right in front of us, if our attention is focused elsewhere.
Test Your Awareness.
Watch this video and count how many passes the team in white makes.
This is worth doing so you experience it yourself.
Try to ignore the black team. Just focus on the white team, and see if you can accurately count how many times they pass the ball.
OK, click the video to do it now.
Did you get the right answer? Even though I knew what to expect, the result or effect was surprising.
By the way, there is a newer version of this video, here.
Think how often your focus blinds you to the obvious.
Change Blindness.
Missing an invisible gorilla or a moon-walking bear may seem strange. However, the next experiment may be more surprising.
This video demonstrates "change blindness". In an experiment, 75% of the participants didn't notice that the experimenter who bent under a counter was replaced by a different person.
If you liked that, here is a version done by Derrin Brown. It is quite clever and worth watching. It was even more surprising to me because it was done in public with "real people". How did people not notice a white male switching with a black guy (or an asian female) in the middle of a conversation?
Warning: Objects In Your Attention Span Are Fewer Than You Perceive.
Moment by moment, the brain selectively processes information it deems most relevant. Experiments, like these, show the limits of our capacity to encode, retain, and compare visual information from one glance to the next.
More importantly, this suggests that our awareness of our visual surroundings is far more sparse than most people intuitively believe. Consequently, our intuition can deceive us far more often than we perceive.
Clearly, in an information-rich environment, attention is a scarce and essential resource. So, pay attention (or automate the things you know need to be done right, every time).
Daniel Simons' experiments on visual awareness have become famous. The primary conclusion drawn from his research is that we can miss incredibly obvious things, right in front of us, if our attention is focused elsewhere.
Test Your Awareness.
Watch this video and count how many passes the team in white makes.
This is worth doing so you experience it yourself.
Try to ignore the black team. Just focus on the white team, and see if you can accurately count how many times they pass the ball.
OK, click the video to do it now.
Did you get the right answer? Even though I knew what to expect, the result or effect was surprising.
By the way, there is a newer version of this video, here.
Think how often your focus blinds you to the obvious.
Change Blindness.
Missing an invisible gorilla or a moon-walking bear may seem strange. However, the next experiment may be more surprising.
This video demonstrates "change blindness". In an experiment, 75% of the participants didn't notice that the experimenter who bent under a counter was replaced by a different person.
If you liked that, here is a version done by Derrin Brown. It is quite clever and worth watching. It was even more surprising to me because it was done in public with "real people". How did people not notice a white male switching with a black guy (or an asian female) in the middle of a conversation?
Warning: Objects In Your Attention Span Are Fewer Than You Perceive.
Moment by moment, the brain selectively processes information it deems most relevant. Experiments, like these, show the limits of our capacity to encode, retain, and compare visual information from one glance to the next.
More importantly, this suggests that our awareness of our visual surroundings is far more sparse than most people intuitively believe. Consequently, our intuition can deceive us far more often than we perceive.
Clearly, in an information-rich environment, attention is a scarce and essential resource. So, pay attention (or automate the things you know need to be done right, every time).
When the Texas Rangers competed against the New York Yankees, it marked the greatest disparity in raw dollars between payrolls in the history of playoff baseball, at $152 million.
