Thoughts about the markets, automated trading algorithms, artificial intelligence, and lots of other stuff
Listen to the clever word-play in this Louis Armstrong and Danny Kaye duet and you'll hear the seeds from which a bunch of modern music sprouted from …
If this doesn't make you feel better after you watch it, please contact me and I will send the fun police by your house!
(hat tip to Perro Grande)
Seeing my mother made me feel young … like I was twelve.
This past Friday I organized and cleaned things more thoroughly than usual. Why? Because my mother was coming to town; and I still want her to think I'm a good boy. How funny?
Here's another anecdote worth sharing. At breakfast today – my wife, Jennifer, dropped some food and responded by saying something in Indonesian.
My mother asked her if she just swore. Jennifer replied that she didn't.
So my mom asked what she would have said if she swore in Indonesian. Jennifer explained that Indonesians swear in English.
So there you have it, in case you think jazz music is the only form of expression that we've invented, now you know we also brought swear-words to the world.
Seeing my mother made me feel young … like I was twelve.
This past Friday I organized and cleaned things more thoroughly than usual. Why? Because my mother was coming to town; and I still want her to think I'm a good boy. How funny?
Here's another anecdote worth sharing. At breakfast today – my wife, Jennifer, dropped some food and responded by saying something in Indonesian.
My mother asked her if she just swore. Jennifer replied that she didn't.
So my mom asked what she would have said if she swore in Indonesian. Jennifer explained that Indonesians swear in English.
So there you have it, in case you think jazz music is the only form of expression that we've invented, now you know we also brought swear-words to the world.
How many things that you think you "know" are out-dated or simply not true? Ignorance isn't always the problem; this video shows that pre-conceived notions pose quite a challenge.
In this Ted Talk, called "Let My Dataset Change Your Mindset", watch as Hans Rosling uses fascinating data-bubble software to burst myths about the developing world, and how the world has developed.
Very interesting for the content … and the analysis techniques.
For Additional Information.
How many things that you think you "know" are out-dated or simply not true? Ignorance isn't always the problem; this video shows that pre-conceived notions pose quite a challenge.
In this Ted Talk, called "Let My Dataset Change Your Mindset", watch as Hans Rosling uses fascinating data-bubble software to burst myths about the developing world, and how the world has developed.
Very interesting for the content … and the analysis techniques.
For Additional Information.
Our credit market debt is approximately 375% of our Gross Domestic Product. That caught my attention; it shows how much more burden the economy carries now than it did during the Great Depression. The unemployment situation adds to that burden.
If that isn't frightening enough, the next chart gives a slightly different perspective. It helps visualize the cost of the government's massive action and stimulus. Consequently, we are staring at the largest estimated budget deficit as a percentage of nominal GDP since World War II. It wouldn't surprise me if the projected $1.84 trillion deficit for fiscal 2009 should soon prove to be a conservative estimate, and it moves above $2 Trillion. Here is a recently updated chart of Federal Spending.
For more on this, here is a link to some interesting commentary from TCW Group. The Great Debt Binge: A Tragedy in Three Acts. And this link from Crestmont Research has a different perspective.
Another Way For NASA to Get Back to the Moon.
There is talk that budget woes may hurt NASA's plans to get back to the moon. Perhaps there is another way …
Current Market Commentary.
Speaking of rocket rides, once again the markets held up well, even after a worse-than-expected jobs data report shows the highest level of unemployment since 1983. The equity markets have surprised many by consistently fighting off worries that they have climbed higher than economic fundamentals warrant. However with September being a notoriously bad month, historically, for stocks … Concerns are high that a correction is likely as trading volume increases after the holiday weekend.
How Does This Rally Compare to the Great Depression Bear Rallies?
For some perspective on the current stock market rally and how it compares the 1929-1932 bear market, this chart illustrates the duration (calendar days) and magnitude (percent gain) of significant Dow rallies that occurred during the 1929-1932 bear market (solid blue dots). For example, the bear market rally that began in November 1929 lasted 155 calendar days and resulted in a gain of 48%. As this chart illustrates, the duration of the current Dow rally (in yellow highlight) is longer than any that occurred during the 1929-1932 bear market. As for magnitude, only the November 1929 bear market rally resulted in a better performance than what has occurred during the current rally to date.
Many of the analysts I follow are starting to lighten-up their long exposure. For example, Doug Kass called the top a week ago. Likewise, Art Cashin said he is selling stock and taking some risk off the table.
If you were limited to "going-long" equity indices, then there would be a lot to worry about. Instead, this situation creates other opportunities. Let's look at some of them. StockCharts.com is a good source for a bigger picture. The next chart shows how some of the these intermarket trade opportunities have done over the past month or so (like Gold, Bonds, Yen, US Dollar, Euro, and of course the S&P 500).
I was looking for Gold to break-out; however, I wasn't aware that other defensive plays, like Bonds or the Yen, have been doing so well recently.
By the way, the chart above is interactive; so by clicking the picture, you can drag the yellow-highlighted date range slider to see how the change plays-out over time. You can also add or change the markets this comparison uses.
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
Our credit market debt is approximately 375% of our Gross Domestic Product. That caught my attention; it shows how much more burden the economy carries now than it did during the Great Depression. The unemployment situation adds to that burden.
If that isn't frightening enough, the next chart gives a slightly different perspective. It helps visualize the cost of the government's massive action and stimulus. Consequently, we are staring at the largest estimated budget deficit as a percentage of nominal GDP since World War II. It wouldn't surprise me if the projected $1.84 trillion deficit for fiscal 2009 should soon prove to be a conservative estimate, and it moves above $2 Trillion. Here is a recently updated chart of Federal Spending.
For more on this, here is a link to some interesting commentary from TCW Group. The Great Debt Binge: A Tragedy in Three Acts. And this link from Crestmont Research has a different perspective.
Another Way For NASA to Get Back to the Moon.
There is talk that budget woes may hurt NASA's plans to get back to the moon. Perhaps there is another way …
Current Market Commentary.
Speaking of rocket rides, once again the markets held up well, even after a worse-than-expected jobs data report shows the highest level of unemployment since 1983. The equity markets have surprised many by consistently fighting off worries that they have climbed higher than economic fundamentals warrant. However with September being a notoriously bad month, historically, for stocks … Concerns are high that a correction is likely as trading volume increases after the holiday weekend.
How Does This Rally Compare to the Great Depression Bear Rallies?
For some perspective on the current stock market rally and how it compares the 1929-1932 bear market, this chart illustrates the duration (calendar days) and magnitude (percent gain) of significant Dow rallies that occurred during the 1929-1932 bear market (solid blue dots). For example, the bear market rally that began in November 1929 lasted 155 calendar days and resulted in a gain of 48%. As this chart illustrates, the duration of the current Dow rally (in yellow highlight) is longer than any that occurred during the 1929-1932 bear market. As for magnitude, only the November 1929 bear market rally resulted in a better performance than what has occurred during the current rally to date.
Many of the analysts I follow are starting to lighten-up their long exposure. For example, Doug Kass called the top a week ago. Likewise, Art Cashin said he is selling stock and taking some risk off the table.
If you were limited to "going-long" equity indices, then there would be a lot to worry about. Instead, this situation creates other opportunities. Let's look at some of them. StockCharts.com is a good source for a bigger picture. The next chart shows how some of the these intermarket trade opportunities have done over the past month or so (like Gold, Bonds, Yen, US Dollar, Euro, and of course the S&P 500).
I was looking for Gold to break-out; however, I wasn't aware that other defensive plays, like Bonds or the Yen, have been doing so well recently.
By the way, the chart above is interactive; so by clicking the picture, you can drag the yellow-highlighted date range slider to see how the change plays-out over time. You can also add or change the markets this comparison uses.
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
The market is strong right now. How do I know? Aside from the near-audible moan of bears, Price going up is a pretty good primary indicator.
Kidding aside, other indicators are worth looking at here too. One of them is the NYSE High-Low line.
The following chart shows this market breadth indicator. It is calculated at the end of each day by taking the number of NYSE stocks making New 52-week Highs and subtracting the number of stocks making New 52-week Lows. What is important to notice is the shape of the line – up is strong (or bullish), down is weak (or bearish). Sometimes a picture is worth a thousand words.
You can view updated versions of this chart anytime on StockCharts.com at this link. For some context, after clicking the link, scroll down to see the weekly version of that chart. For additional context, this link will show you what it looked like last November.
Our Rally Isn't Just Our Rally.
Below are a series of iPhone screen captures showing the daily performance of World Equity Market Indices from Bloomberg. The thing to notice is that while the news media in America made a big deal about the market being up because of positive news in the housing market … a quick glance around the world showed equal or bigger gains. This type high correlation continues to attract my attention.
How Far Have We Come?
Here is a chart showing Fibonacci retracement lines drawn from the high back in late 2007 to the low in November of 2009. We are barely back to the second major retracement level … and still a considerable distance from the 50% mark.
There is art and science involved in drawing Fibonacci retracements and extensions. For example, where do you start and end? Would it be better to have started from the highs in May or September of 2008 instead? Click here for more Fibonacci Commentary.
Early Warning Signs?
Here are a few signs that the rally is getting a little worn-out. There has been more volatility lately, and that can be a bearish early indication. For the past few months markets have gone up, even on bad news (like the recent bank closings); however, this past week saw the first hints of markets selling-off after good news. And we are coming into September, which is historically a week month for markets.
The trend is your friend, until it turns.
A Little Humor.
Thought this cartoon about the Cash-for-Clunkers program ending was worth posting.
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
The market is strong right now. How do I know? Aside from the near-audible moan of bears, Price going up is a pretty good primary indicator.
Kidding aside, other indicators are worth looking at here too. One of them is the NYSE High-Low line.
The following chart shows this market breadth indicator. It is calculated at the end of each day by taking the number of NYSE stocks making New 52-week Highs and subtracting the number of stocks making New 52-week Lows. What is important to notice is the shape of the line – up is strong (or bullish), down is weak (or bearish). Sometimes a picture is worth a thousand words.
You can view updated versions of this chart anytime on StockCharts.com at this link. For some context, after clicking the link, scroll down to see the weekly version of that chart. For additional context, this link will show you what it looked like last November.
Our Rally Isn't Just Our Rally.
Below are a series of iPhone screen captures showing the daily performance of World Equity Market Indices from Bloomberg. The thing to notice is that while the news media in America made a big deal about the market being up because of positive news in the housing market … a quick glance around the world showed equal or bigger gains. This type high correlation continues to attract my attention.
How Far Have We Come?
Here is a chart showing Fibonacci retracement lines drawn from the high back in late 2007 to the low in November of 2009. We are barely back to the second major retracement level … and still a considerable distance from the 50% mark.
There is art and science involved in drawing Fibonacci retracements and extensions. For example, where do you start and end? Would it be better to have started from the highs in May or September of 2008 instead? Click here for more Fibonacci Commentary.
Early Warning Signs?
Here are a few signs that the rally is getting a little worn-out. There has been more volatility lately, and that can be a bearish early indication. For the past few months markets have gone up, even on bad news (like the recent bank closings); however, this past week saw the first hints of markets selling-off after good news. And we are coming into September, which is historically a week month for markets.
The trend is your friend, until it turns.
A Little Humor.
Thought this cartoon about the Cash-for-Clunkers program ending was worth posting.
Business Posts Moving the Markets that I Found Interesting This Week:
Lighter Ideas and Fun Links that I Found Interesting This Week
Sometimes new technology seems like science fiction. Other times, science fiction introduces us to new technology.
I remember watching Minority Report and having a sense that I was watching a future closer than it seemed. There's a scene where Tom Cruise is walking through a shopping area and each time he passes a store there is a personalized ad; and in other scenes there is a "Terminator-Like" text that overlays the physically real world. That is called "Augmented Reality".
Well, your phone may not be as cool as that, yet; however it's getting there pretty quickly.
The next picture doesn't look like much; but it's using the iPhone's built-in camera and GPS unit to recognize highly rated restaurants in real time. The application doing this is Yelp. This feature is
currently hidden by default; but you can turn it on by shaking your
phone vigorously, until the "Monocle" feature activates.
Soon, I imagine this will be enhanced further with a discount coupons and the
ability to place orders before you walk in the door. Nonetheless, it's
an example of what's coming.
Where Else Will This Be Useful?
Imagine what this could do to the real-estate industry (as price per square foot, tax rates, etc. overlay the properties as you drive by). Or, imagine traders looking at a chart displaying the most relevant indicators, patterns, setups, and triggers for the company or market they are analyzing. It gives a whole new meaning to real-time business intelligence.