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

  • Need Energy, a Clear Head, or a Power Nap … There’s an App for That.

    091212 Pzizz Logo pzizz (pronounced puh-zizz) Relax is a power-nap app. 

    Whenever you feel tired or frazzled, put on your headphones, set the time you have available – and pzizz creates a
    new and unique soundtrack, each time you use it.  There's nothing to learn
    – and no effort required by you. 

    Simply press a button, and you get a surprisingly effective and pleasant relaxation session.

    Increase Energy and Performance.

    I've been a pzizz user since 2005.  Frankly, I'm still surprised by how much it helps when you need a quick nap, pick-me-up, or boost of energy (even if you only have 15-20 minutes).  It is nice that it works to relax you; it is even better that you wake-up feeling good and ready for the rest of your day.

    Here's How it Works.

    First, find a comfortable place.  Second, choose how long you want your power nap to be.  Third, adjust how much talking you prefer. Fourth, headphones are better – but not necessary.  Fifth, press the button and let yourself relax.

    091212 Pzizz Options

    What Happens?

    Each session has three parts, the Intro, Main Session, and Wake-Up Sequence.  Throughout all of them, a deep, cool, British voice guides you through some relaxation techniques and gives you encouragement and positive feedback.  The voice is done by Michael Breen, a well-know NLP Expert.

    Sound Waves Affect Brain Waves.

    In addition to the NLP guidance, pzizz  also leverages binaural beats and ambient sounds to help you relax.  Yes, there is also a pleasant background track complete with music, bells, wind chimes and other assorted ear candy designed to lull you to sleep. Bottom-Line: You'll like it.

    Try It Yourself.

    If this all sounds new-agey, I can't blame you. I mocked the idea of pzizz when I first heard about it. "Actions speak louder than words".  If you need proof, try it yourself. Click this link to download a sample 15 minute energizer soundtrack and a sample 15 minute sleep soundtrack to see how it works for you. 

    The software is available for PCs and Macs.  Also, pzizz has two iPhone apps.

    Keep an open mind and you may be pleasantly surprised.

    Related Links:

    Related Posts I've Written:

  • Need Energy, a Clear Head, or a Power Nap … There’s an App for That.

    091212 Pzizz Logo pzizz (pronounced puh-zizz) Relax is a power-nap app. 

    Whenever you feel tired or frazzled, put on your headphones, set the time you have available – and pzizz creates a
    new and unique soundtrack, each time you use it.  There's nothing to learn
    – and no effort required by you. 

    Simply press a button, and you get a surprisingly effective and pleasant relaxation session.

    Increase Energy and Performance.

    I've been a pzizz user since 2005.  Frankly, I'm still surprised by how much it helps when you need a quick nap, pick-me-up, or boost of energy (even if you only have 15-20 minutes).  It is nice that it works to relax you; it is even better that you wake-up feeling good and ready for the rest of your day.

    Here's How it Works.

    First, find a comfortable place.  Second, choose how long you want your power nap to be.  Third, adjust how much talking you prefer. Fourth, headphones are better – but not necessary.  Fifth, press the button and let yourself relax.

    091212 Pzizz Options

    What Happens?

    Each session has three parts, the Intro, Main Session, and Wake-Up Sequence.  Throughout all of them, a deep, cool, British voice guides you through some relaxation techniques and gives you encouragement and positive feedback.  The voice is done by Michael Breen, a well-know NLP Expert.

    Sound Waves Affect Brain Waves.

    In addition to the NLP guidance, pzizz  also leverages binaural beats and ambient sounds to help you relax.  Yes, there is also a pleasant background track complete with music, bells, wind chimes and other assorted ear candy designed to lull you to sleep. Bottom-Line: You'll like it.

    Try It Yourself.

    If this all sounds new-agey, I can't blame you. I mocked the idea of pzizz when I first heard about it. "Actions speak louder than words".  If you need proof, try it yourself. Click this link to download a sample 15 minute energizer soundtrack and a sample 15 minute sleep soundtrack to see how it works for you. 

    The software is available for PCs and Macs.  Also, pzizz has two iPhone apps.

    Keep an open mind and you may be pleasantly surprised.

    Related Links:

    Related Posts I've Written:

  • Getting Ready for the New Year with Postive-Focused Planning

    Holiday shopping season is in full-force.  That means 2010 is right around the corner.

    091206-Good-News-Bad-News As an early gift, I got to go to a hockey game with my son.  This picture captures a Good News – Bad News moment for me.  On the positive side, I'm happy to see that my son shaved off his strangely orange mop of hair. However, standing next to him, I look like a professional "before" model.

    That helped me realize that it's time to start thinking about New Year's resolutions, and specifically some health related resolutions.

    Here is a summary of that process.  Hopefully, you can use some of these concepts.

    • Focus on What You Want.
    • Focus on Why You Want It.
    • Focus on Ways You Might Get it.
    • Focus on the Progress.

    Below, I'll take you through an example of the four steps you need to use Positive-Focused Planning to get what you want.

    Moving Towards a Solution, Rather Than Suffering with the Problem.

    My first instinct was to think "I need to lose weight".  Knowing that "you're fat" isn't helpful … my head, quickly translates that to something a tad more positive, yet generic, like: "I choose to be healthy and vital, and to live a healthy lifestyle".

    Blah, blah … They are just words.  What I needed was something specific, measurable and actionable.  How about: "I will lose 15 pounds and stop eating after dinner."  OK, but that isn't inspiring, and there isn't much for me to do. I can do better than that.

    Figure-Out a Big Enough WHY, Rather Than Worrying about the HOW's.

    This post isn't about health and fitness, it is about the mind-set and techniques you can use to set empowering goals and plans in any situation.

    091206 Peaceful Easy Feeling So, while I could list a lot of ways to lose weight; and I might even remember to do some of them, when you create a driving force, the momentum takes care of itself.  The first step in doing that is knowing WHY you want something.

    I really do want to be healthy and vital (it sure beats the alternatives), and I want to have the energy and confidence to live and enjoy my life fully.  The world is my playground, and I want to take advantage of more opportunities to play with family and friends.  In order to do those things, I must find better ways for me to live a healthy lifestyle.

    The WHYs are just as important for business goals too.

    Focus on Potential Solutions, Rather than Problems or Challenges.

    091206 Obstacle Obstacles Exist. The bad news: I don't eat fish and I don't like vegetables (unless French Fries are vegetables).  My joints aren't close to healthy from years of violent contact sports.  And I rarely get 7 hours of sleep.  The good news: is none of those things matter; and even if they did, it just would mean that I have a lot of room for progress.

    It is natural to focus on obstacles.  Use them as a reminder to focus on potential solutions instead. They are beacons, pointing the way.

    How do you do it?  To focus on solutions, you can make two action-based lists: one is of things To-Do … and another is of things Not To-Do.

    Here are some of the sample To-Do Items:

    • I will drink more water than coffee.
    • I will stretch, or do basic calisthenics, on days that I do not go to the gym.
    • I will make a healthy shake as a meal replacement rather than a meal supplement.
    • I will focus on relaxation and meditation, as much as I focus on strength & physical exercises.

    Here is the actionable list of Not To-Do Items.

    • I will not buy new pants or wear stretchy pants.
    • I will not eat snacks out their container, and will portion-out what I want first.
    • I will not compare my current level of fitness to what I used to be able to do. Instead I will focus on my actions and improvement.

    Create Healthier Habits.

    It is easy to follow your routine.  So, make your routine better.  Here are some examples of things you could do to make being healthier happen with less effort.

    • Pre-sort your vitamins into daily doses, and keep them by the coffee machine.
    • Buy healthy snacks, like fruit, raw nuts or organic energy bars (instead of chips).
    • Make exercise time, the time you enjoy listening to music.
    • Park at the end of the parking lot, so you get to walk.
    • Meet with friends at the gym, rather than a bar or restaurant.

    You get the idea.  Get in the habit of looking for ways to create better habits.  What habits could you alter slightly, to make a big difference?  Which things can you automate or outsource?

    Focus on Your Progress.

    In this case, it really is about the journey.  Instead of keeping track of how far you have to go … notice how far you've come.  It is about creating energy, momentum and a sense of possibility.  You may have a big, hairy, audacious goal in mind.  That's fine, as long as you realize that reaching each milestone along the way is still an accomplishment.

    • Find shoes that don't hurt your feet.
    • Pick a gym, or a personal trainer.
    • Run more than two laps without stopping.

    It doesn't matter what they are are … they all count, as long as you know that you are moving in the right direction.

    Summary.

    The point of this exercise as was not really to focus on fitness. These techniques and goal-setting tools work in any situation. The principles are:

    1. First, figure out what you want, and why it is important to you. 
    2. Second, find something you can do, right now, which moves you in the right direction.
    3. Third, notice which things create (rather than take) energy. Spend your time on those, and automate or create routines to take care of the rest.
    4. Fourth, set milestones so that you can recognize and celebrate your progress.

  • Getting Ready for the New Year with Postive-Focused Planning

    Holiday shopping season is in full-force.  That means 2010 is right around the corner.

    091206-Good-News-Bad-News As an early gift, I got to go to a hockey game with my son.  This picture captures a Good News – Bad News moment for me.  On the positive side, I'm happy to see that my son shaved off his strangely orange mop of hair. However, standing next to him, I look like a professional "before" model.

    That helped me realize that it's time to start thinking about New Year's resolutions, and specifically some health related resolutions.

    Here is a summary of that process.  Hopefully, you can use some of these concepts.

    • Focus on What You Want.
    • Focus on Why You Want It.
    • Focus on Ways You Might Get it.
    • Focus on the Progress.

    Below, I'll take you through an example of the four steps you need to use Positive-Focused Planning to get what you want.

    Moving Towards a Solution, Rather Than Suffering with the Problem.

    My first instinct was to think "I need to lose weight".  Knowing that "you're fat" isn't helpful … my head, quickly translates that to something a tad more positive, yet generic, like: "I choose to be healthy and vital, and to live a healthy lifestyle".

    Blah, blah … They are just words.  What I needed was something specific, measurable and actionable.  How about: "I will lose 15 pounds and stop eating after dinner."  OK, but that isn't inspiring, and there isn't much for me to do. I can do better than that.

    Figure-Out a Big Enough WHY, Rather Than Worrying about the HOW's.

    This post isn't about health and fitness, it is about the mind-set and techniques you can use to set empowering goals and plans in any situation.

    091206 Peaceful Easy Feeling So, while I could list a lot of ways to lose weight; and I might even remember to do some of them, when you create a driving force, the momentum takes care of itself.  The first step in doing that is knowing WHY you want something.

    I really do want to be healthy and vital (it sure beats the alternatives), and I want to have the energy and confidence to live and enjoy my life fully.  The world is my playground, and I want to take advantage of more opportunities to play with family and friends.  In order to do those things, I must find better ways for me to live a healthy lifestyle.

    The WHYs are just as important for business goals too.

    Focus on Potential Solutions, Rather than Problems or Challenges.

    091206 Obstacle Obstacles Exist. The bad news: I don't eat fish and I don't like vegetables (unless French Fries are vegetables).  My joints aren't close to healthy from years of violent contact sports.  And I rarely get 7 hours of sleep.  The good news: is none of those things matter; and even if they did, it just would mean that I have a lot of room for progress.

    It is natural to focus on obstacles.  Use them as a reminder to focus on potential solutions instead. They are beacons, pointing the way.

    How do you do it?  To focus on solutions, you can make two action-based lists: one is of things To-Do … and another is of things Not To-Do.

    Here are some of the sample To-Do Items:

    • I will drink more water than coffee.
    • I will stretch, or do basic calisthenics, on days that I do not go to the gym.
    • I will make a healthy shake as a meal replacement rather than a meal supplement.
    • I will focus on relaxation and meditation, as much as I focus on strength & physical exercises.

    Here is the actionable list of Not To-Do Items.

    • I will not buy new pants or wear stretchy pants.
    • I will not eat snacks out their container, and will portion-out what I want first.
    • I will not compare my current level of fitness to what I used to be able to do. Instead I will focus on my actions and improvement.

    Create Healthier Habits.

    It is easy to follow your routine.  So, make your routine better.  Here are some examples of things you could do to make being healthier happen with less effort.

    • Pre-sort your vitamins into daily doses, and keep them by the coffee machine.
    • Buy healthy snacks, like fruit, raw nuts or organic energy bars (instead of chips).
    • Make exercise time, the time you enjoy listening to music.
    • Park at the end of the parking lot, so you get to walk.
    • Meet with friends at the gym, rather than a bar or restaurant.

    You get the idea.  Get in the habit of looking for ways to create better habits.  What habits could you alter slightly, to make a big difference?  Which things can you automate or outsource?

    Focus on Your Progress.

    In this case, it really is about the journey.  Instead of keeping track of how far you have to go … notice how far you've come.  It is about creating energy, momentum and a sense of possibility.  You may have a big, hairy, audacious goal in mind.  That's fine, as long as you realize that reaching each milestone along the way is still an accomplishment.

    • Find shoes that don't hurt your feet.
    • Pick a gym, or a personal trainer.
    • Run more than two laps without stopping.

    It doesn't matter what they are are … they all count, as long as you know that you are moving in the right direction.

    Summary.

    The point of this exercise as was not really to focus on fitness. These techniques and goal-setting tools work in any situation. The principles are:

    1. First, figure out what you want, and why it is important to you. 
    2. Second, find something you can do, right now, which moves you in the right direction.
    3. Third, notice which things create (rather than take) energy. Spend your time on those, and automate or create routines to take care of the rest.
    4. Fourth, set milestones so that you can recognize and celebrate your progress.

  • Capitalogix Commentary 12/06/09

    It looks like the economy is taking off.  Of course, a jobless recovery would weigh things down. 

    091206 Jobless Recovery - KAL from Economist

    We saw more favorable (or at least less negative) jobs report this week.  We'll see if this marks a turning point for this important measure.  In any event, the Markets have continued to hold up well.

    The Big Picture.

    Here is a three-year look at the NASDAQ Composite Index.  The good news is that price broke above the blue-dashed trend-line, and has been able to hold its position and make new highs.  That was bullish.  Traders notice that momentum is slowing, and that price is mired in a key resistance zone.  This area (marked in pink) is seen as a support-and-resistance zone and also marks the 61.8% retracement level (which traders often look at a reversal trigger).

     091206 NASDAQ Decision

    Consequently, a sustained move above this cluster of resistance would be bullish for the market.

    Let's Zoom-In for a Closer Look.

    As noted, though, upwards momentum has slowed.  The next chart is an intra-day chart of the S&P 500 Index.  For most of November, you can see trading ranges alternating above and below a "Disagreement Zone" (which is highlighted by the gray zone).  Think of this as an arm-wrestling match.  Currently, there is no clear winner.  Each push in one direction, has been met with an equal push in the opposite direction.  In addition, many of the moves are the result of overnight gaps. These are marked by the orange circles. You can click the chart below to see a larger version.

    091206 S&P500 100 Days Back 75 min 800p

    This chart also implies that it would be bullish for the markets to sustain its move above this "Disagreement Zone" level.  It is a pretty clear "line-in-the-sand".

    Let's Look Under the Surface at Market Breadth.

    This chart looks at NSYSE stocks making new 52-week highs, and subtracts the number of NYSE stocks making new 52-week lows . That means we get more Net New Highs when the markets are doing better. As it stands, A lot of NYSE stocks are making highs for the year.  Yet, there are less Net New Highs than we saw in October. While this is a little picky, it does constitute a negative divergence. Consequently, I'm watching what happen in this measure as a potential early indicator of market change.

    091206 Fewer New Highs

    Hope you have a good week.

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

    • Respecting the Recovery: Do the Pouting Pundits of Pessimism have it Wrong? (Forbes)
    • Too Big to Ignore: Unease Over Banks' $1 Trillion of Cash Reserves. (WSJ)
    • Roubini: A Tale of Two American Economies. (RGE Monitor)
    • M&A Is Back — But This Time, It's Different. (Wharton)
    • Shoppers Are Winning at Chicken, Waiting for Discounts. (WSJ)
    • More Posts Moving the Markets.

    Lighter Ideas and Fun Links that I Found Interesting This Week

  • Capitalogix Commentary 12/06/09

    It looks like the economy is taking off.  Of course, a jobless recovery would weigh things down. 

    091206 Jobless Recovery - KAL from Economist

    We saw more favorable (or at least less negative) jobs report this week.  We'll see if this marks a turning point for this important measure.  In any event, the Markets have continued to hold up well.

    The Big Picture.

    Here is a three-year look at the NASDAQ Composite Index.  The good news is that price broke above the blue-dashed trend-line, and has been able to hold its position and make new highs.  That was bullish.  Traders notice that momentum is slowing, and that price is mired in a key resistance zone.  This area (marked in pink) is seen as a support-and-resistance zone and also marks the 61.8% retracement level (which traders often look at a reversal trigger).

     091206 NASDAQ Decision

    Consequently, a sustained move above this cluster of resistance would be bullish for the market.

    Let's Zoom-In for a Closer Look.

    As noted, though, upwards momentum has slowed.  The next chart is an intra-day chart of the S&P 500 Index.  For most of November, you can see trading ranges alternating above and below a "Disagreement Zone" (which is highlighted by the gray zone).  Think of this as an arm-wrestling match.  Currently, there is no clear winner.  Each push in one direction, has been met with an equal push in the opposite direction.  In addition, many of the moves are the result of overnight gaps. These are marked by the orange circles. You can click the chart below to see a larger version.

    091206 S&P500 100 Days Back 75 min 800p

    This chart also implies that it would be bullish for the markets to sustain its move above this "Disagreement Zone" level.  It is a pretty clear "line-in-the-sand".

    Let's Look Under the Surface at Market Breadth.

    This chart looks at NSYSE stocks making new 52-week highs, and subtracts the number of NYSE stocks making new 52-week lows . That means we get more Net New Highs when the markets are doing better. As it stands, A lot of NYSE stocks are making highs for the year.  Yet, there are less Net New Highs than we saw in October. While this is a little picky, it does constitute a negative divergence. Consequently, I'm watching what happen in this measure as a potential early indicator of market change.

    091206 Fewer New Highs

    Hope you have a good week.

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

    • Respecting the Recovery: Do the Pouting Pundits of Pessimism have it Wrong? (Forbes)
    • Too Big to Ignore: Unease Over Banks' $1 Trillion of Cash Reserves. (WSJ)
    • Roubini: A Tale of Two American Economies. (RGE Monitor)
    • M&A Is Back — But This Time, It's Different. (Wharton)
    • Shoppers Are Winning at Chicken, Waiting for Discounts. (WSJ)
    • More Posts Moving the Markets.

    Lighter Ideas and Fun Links that I Found Interesting This Week

  • Shopping Smarter: Where to Find the Best Deals this Season

    Here is a list of shopping tools that can save you money and time.

    These are sites I've used myself and was happy about using.  Please let me know if you have additions or suggestions.

    The suggestions fall into several main categories: Deals, Price Comparison, and Phone Apps.

    Deals:


    Price Comparison:


    Phone Apps:


    Honorable Mentions: Other Resources Worth Checking

  • Shopping Smarter: Where to Find the Best Deals this Season

    Here is a list of shopping tools that can save you money and time.

    These are sites I've used myself and was happy about using.  Please let me know if you have additions or suggestions.

    The suggestions fall into several main categories: Deals, Price Comparison, and Phone Apps.

    Deals:


    Price Comparison:


    Phone Apps:


    Honorable Mentions: Other Resources Worth Checking

  • Capitalogix Commentary 11/29/09

    091129 Dubai Landmark Black Friday came in several ways this year.  Yes, there was shopping.  However, the markets had a dark few days, too, as the world markets quaked at the news of Dubai's sovereign debt default.

    I've always believed that you can tell a lot about the current character of the market based on how it responds to news. Sometimes markets go up on good news, and go down on bad news. That seems normal. On the other hand, I take it as a bearish sign when markets sell-off after good news. Likewise, I take it is a bullish sign when markets go up, despite bad news.

    So, it wasn't surprising that markets reacted negatively to the largest sovereign debt default since Argentina. It was, however, somewhat bullish that the US equity indices went down as little as they did. Yes, I know that our markets were closed on Thursday (when most of the damage was done globally) because of our Thanksgiving holiday. And I also realized that Friday was a half day and had relatively light volume. Nonetheless, it could have been worse; much worse.

    Here is a link to a post I wrote that I think is worth reading at this point in the markets. I called it "What My Dogs Can Teach Us about Markets".  It's really about how perceived danger puts us on alert; and why the second perceived danger often receives an even greater response. The point is that the world is now on alert, and I'm watching how calmly (or not) the market reacts to news.

    Market Commentary.

    The markets continue to hold up well on the surface.  Underneath, I'm seeing signs of weakness (poor breadth, weak up-volume, fewer new highs, more negative divergences, etc.).  Nevertheless, price has stayed above important levels.

    With that said, here are some patterns worth watching.  This chart uses 15-minute bars to get an intra-day look at the S&P Mid-Cap Index throughout November. The most notable thing I see is a character change in mid-month.  The Bullish Break-Away Gaps seen at the beginning of the month are followed by two Bearish Island Reversal patterns (marked by the yellow boxes) in the second half of the month.  This type of pattern can be seen at market tops.  It starts with a gap-up (shown by the green circle) and ends with an exhaustion gap (shown by the red circle). You can click this chart to see a full-size version.

    091128 EMD_15min_Nov
    To understand what this pattern shows, you can think of it as the last buyers
    rushing to get in (pushing-up price so fast that it creates a
    break-away gap), only to find that there are no new buyers (causing a
    price drop and the resulting exhaustion gap).  This gap down can signal
    the beginning of a change in trend. Two of them in a row makes me more watchful.

    David Corna reminded me that this pattern shows-up differently on a higher time-frame. For example, on a daily candlestick chart, the intra-day Island Reversal manifests as two classic reversal patterns, a Hanging Man followed by an Evening Star. Their very names are onomatopoetic to their meaning. These candlestick formations will almost always be found at the end of a trend and the beginning of a reversal.

    Chart.ly from StockTwits is a Good Source of Ideas.

    Many traders use charts and technical analysis to gain insight and perspective on what's happening in the markets.  I'm always looking for resources that help me do that.  Recently, I've found a lot of good content on the Chart.ly website.  It is part of StockTwits, and has a strong user community.  Here is an example of a chart I found there this week.

    091129 SP500 Since July

    I like the analysis, and concur that the bottom trend-line (and the area on the far right of the chart marked by the blue circle) points to a key price area.  Staying above that is important for the rally to continue.

    How bullish has the rally been in real economic terms?

    What the Dow Priced in Gold Tells You?

    This chart shows the Dow Jones Industrial Average priced in Gold.  In other words, how many ounces of gold does it take to buy the Dow's price?  So, for example, when the Dow is at 10,000 and Gold is $1,000 per ounce, it would take 10 ounces.

    091129 Dow Priced in Gold Since 1900

    Here is a similar chart, limited to the past ten years.

    091129 Dow Priced in Gold Since 2000

    As you can see, it took over 40 ounces of Gold to pay for Dow in early 2000.  It now takes around 8.75 ounces. From this perspective, it looks like the Dow lost 80% of its value. That seems significant, even though the Dow's price is back close to the levels traded in the year 2000.

    I don't normally put too much stock in charts that show one asset priced in another.  If it was supposed to be priced that way, it would be … However, this comparison seems more relevant to me because gold is a form or currency.  Also, as people decide what to invest in lost opportunity cost is a factor.

    How is the Economy Doing?

    Here is a chart from Russell Investments that identifies a few key economic and market indicators to help assess the current economic health and trend.  Click the chart for an interactive version.

    091129 State of the Economy

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

    Lighter Ideas and Fun Links that I Found Interesting This Week

    • Alpha Males Must Trade on More than Machismo. (FT)
    • America's Healthiest and Unhealthiest States. (MSN Health)
    • In Tough Economy, Tighter Belts Mean Thicker Waists. (WSJ)
    • Man in ‘Coma’ Heard Everything for 23 years. (MSNBC)
    • Clicker's Online TV & Movie Guide Impresses. (Newser)
    • Answers to 15 More Google Interview Questions that Will Make You Feel Stupid. (Insider)
    • More Posts with Lighter Ideas and Fun Links.

  • Capitalogix Commentary 11/29/09

    091129 Dubai Landmark Black Friday came in several ways this year.  Yes, there was shopping.  However, the markets had a dark few days, too, as the world markets quaked at the news of Dubai's sovereign debt default.

    I've always believed that you can tell a lot about the current character of the market based on how it responds to news. Sometimes markets go up on good news, and go down on bad news. That seems normal. On the other hand, I take it as a bearish sign when markets sell-off after good news. Likewise, I take it is a bullish sign when markets go up, despite bad news.

    So, it wasn't surprising that markets reacted negatively to the largest sovereign debt default since Argentina. It was, however, somewhat bullish that the US equity indices went down as little as they did. Yes, I know that our markets were closed on Thursday (when most of the damage was done globally) because of our Thanksgiving holiday. And I also realized that Friday was a half day and had relatively light volume. Nonetheless, it could have been worse; much worse.

    Here is a link to a post I wrote that I think is worth reading at this point in the markets. I called it "What My Dogs Can Teach Us about Markets".  It's really about how perceived danger puts us on alert; and why the second perceived danger often receives an even greater response. The point is that the world is now on alert, and I'm watching how calmly (or not) the market reacts to news.

    Market Commentary.

    The markets continue to hold up well on the surface.  Underneath, I'm seeing signs of weakness (poor breadth, weak up-volume, fewer new highs, more negative divergences, etc.).  Nevertheless, price has stayed above important levels.

    With that said, here are some patterns worth watching.  This chart uses 15-minute bars to get an intra-day look at the S&P Mid-Cap Index throughout November. The most notable thing I see is a character change in mid-month.  The Bullish Break-Away Gaps seen at the beginning of the month are followed by two Bearish Island Reversal patterns (marked by the yellow boxes) in the second half of the month.  This type of pattern can be seen at market tops.  It starts with a gap-up (shown by the green circle) and ends with an exhaustion gap (shown by the red circle). You can click this chart to see a full-size version.

    091128 EMD_15min_Nov
    To understand what this pattern shows, you can think of it as the last buyers
    rushing to get in (pushing-up price so fast that it creates a
    break-away gap), only to find that there are no new buyers (causing a
    price drop and the resulting exhaustion gap).  This gap down can signal
    the beginning of a change in trend. Two of them in a row makes me more watchful.

    David Corna reminded me that this pattern shows-up differently on a higher time-frame. For example, on a daily candlestick chart, the intra-day Island Reversal manifests as two classic reversal patterns, a Hanging Man followed by an Evening Star. Their very names are onomatopoetic to their meaning. These candlestick formations will almost always be found at the end of a trend and the beginning of a reversal.

    Chart.ly from StockTwits is a Good Source of Ideas.

    Many traders use charts and technical analysis to gain insight and perspective on what's happening in the markets.  I'm always looking for resources that help me do that.  Recently, I've found a lot of good content on the Chart.ly website.  It is part of StockTwits, and has a strong user community.  Here is an example of a chart I found there this week.

    091129 SP500 Since July

    I like the analysis, and concur that the bottom trend-line (and the area on the far right of the chart marked by the blue circle) points to a key price area.  Staying above that is important for the rally to continue.

    How bullish has the rally been in real economic terms?

    What the Dow Priced in Gold Tells You?

    This chart shows the Dow Jones Industrial Average priced in Gold.  In other words, how many ounces of gold does it take to buy the Dow's price?  So, for example, when the Dow is at 10,000 and Gold is $1,000 per ounce, it would take 10 ounces.

    091129 Dow Priced in Gold Since 1900

    Here is a similar chart, limited to the past ten years.

    091129 Dow Priced in Gold Since 2000

    As you can see, it took over 40 ounces of Gold to pay for Dow in early 2000.  It now takes around 8.75 ounces. From this perspective, it looks like the Dow lost 80% of its value. That seems significant, even though the Dow's price is back close to the levels traded in the year 2000.

    I don't normally put too much stock in charts that show one asset priced in another.  If it was supposed to be priced that way, it would be … However, this comparison seems more relevant to me because gold is a form or currency.  Also, as people decide what to invest in lost opportunity cost is a factor.

    How is the Economy Doing?

    Here is a chart from Russell Investments that identifies a few key economic and market indicators to help assess the current economic health and trend.  Click the chart for an interactive version.

    091129 State of the Economy

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

    Lighter Ideas and Fun Links that I Found Interesting This Week

    • Alpha Males Must Trade on More than Machismo. (FT)
    • America's Healthiest and Unhealthiest States. (MSN Health)
    • In Tough Economy, Tighter Belts Mean Thicker Waists. (WSJ)
    • Man in ‘Coma’ Heard Everything for 23 years. (MSNBC)
    • Clicker's Online TV & Movie Guide Impresses. (Newser)
    • Answers to 15 More Google Interview Questions that Will Make You Feel Stupid. (Insider)
    • More Posts with Lighter Ideas and Fun Links.