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

  • What Do Bancruptcies Tell Us?

    Bankruptcy lawyers in Texas have been busy recently.  Past cycles have shown a surge of Chapter 11 Bankruptcy Reorganizations as early indicator of the end of tough economic times. 

    Makes sense though; Reorganization happens when someone wants to preserve an asset, but credit is tight.

    So, it is just a data point, but if it was a football game, my guess is that we'd be in the third quarter.  What do you think?

  • Weekly Market Commentary from 5/16/08

    2008_bear_on_bull_payback_time
    Is The Bear Still Lurking?

    Great market action for bulls recently.  If this has been a head-fake, it certainly was a convincing one.

    The major US Equity Indices are all moving up to their 2008 highs – into their 200-day moving averages.

    There has been a prolonged rally off the March lows, so you are going to hear lots of bearish predictors. It makes sense from the standpoint of price, time and logic.

    Right?

    For example:

    1. We are now "overbought" and the rally is approaching the 61.8% Fibonacci Retracement level;
    2. A re-test of the 50-Day moving average is a likely next move;
    3. That the Put/Call ratio is too bullish, and so is dumb-money confidence levels;
    4. The VIX is simply too low, and readings at these levels often precede big drops;
    5. Consumer confidence levels are at dangerously low levels (add inflation, housing, and gas …); and
    6. We are still in that range-bound congestion area, and the longer we stay here the more we spend upside momentum.

    But, you have to trade what the market brings you.  And the market has digested bad news well recently. More importantly, we know that markets don’t have to trade logically.  So keep your eyes open and respond intelligently.

    Here are some of the things I read this week.

  • Weekly Market Commentary from 5/16/08

    2008_bear_on_bull_payback_time
    Is The Bear Still Lurking?

    Great market action for bulls recently.  If this has been a head-fake, it certainly was a convincing one.

    The major US Equity Indices are all moving up to their 2008 highs – into their 200-day moving averages.

    There has been a prolonged rally off the March lows, so you are going to hear lots of bearish predictors. It makes sense from the standpoint of price, time and logic.

    Right?

    For example:

    1. We are now "overbought" and the rally is approaching the 61.8% Fibonacci Retracement level;
    2. A re-test of the 50-Day moving average is a likely next move;
    3. That the Put/Call ratio is too bullish, and so is dumb-money confidence levels;
    4. The VIX is simply too low, and readings at these levels often precede big drops;
    5. Consumer confidence levels are at dangerously low levels (add inflation, housing, and gas …); and
    6. We are still in that range-bound congestion area, and the longer we stay here the more we spend upside momentum.

    But, you have to trade what the market brings you.  And the market has digested bad news well recently. More importantly, we know that markets don’t have to trade logically.  So keep your eyes open and respond intelligently.

    Here are some of the things I read this week.

  • What is Your Intention?

    Mellensmartblow_rough_sea
    Fear, greed and hope comprise the Bermuda Triangle of trading. Many dreams were battered or lost because of them.

    In trading, my goal is to make and keep money, consistently. It isn’t to be right, or clever, or even creative. Reducing human bias and error are benefits of using automated trading systems; and ultimately that helps us intelligently respond to the markets.

    How does that apply to life?

    Oh, a small question …

    A friend of mine called me this week to share a thought. He said that he was trying to stop simply responding automatically to situations. Instead, he was going to consciously focus on his "intention" before responding.

    Imagine how different the world would occur to you if you brought "intention" into focus instead of mindlessly surrendering to your first feelings and actions.

    Triumphant_man_on_water_200p_2
    My first reaction often is to ask "what is the best next step?" Perhaps you do something similar? On many levels that is a resourceful question. Yet, what would happen if, instead, you brought your intention into focus and asked what role you could play to best support that intention?

    Your role directly affects the options you perceive.

    Let me know how that works for you.

  • What is Your Intention?

    Mellensmartblow_rough_sea
    Fear, greed and hope comprise the Bermuda Triangle of trading. Many dreams were battered or lost because of them.

    In trading, my goal is to make and keep money, consistently. It isn’t to be right, or clever, or even creative. Reducing human bias and error are benefits of using automated trading systems; and ultimately that helps us intelligently respond to the markets.

    How does that apply to life?

    Oh, a small question …

    A friend of mine called me this week to share a thought. He said that he was trying to stop simply responding automatically to situations. Instead, he was going to consciously focus on his "intention" before responding.

    Imagine how different the world would occur to you if you brought "intention" into focus instead of mindlessly surrendering to your first feelings and actions.

    Triumphant_man_on_water_200p_2
    My first reaction often is to ask "what is the best next step?" Perhaps you do something similar? On many levels that is a resourceful question. Yet, what would happen if, instead, you brought your intention into focus and asked what role you could play to best support that intention?

    Your role directly affects the options you perceive.

    Let me know how that works for you.

  • Travel IQ

    Trip Advisor has an interesting game called Traveler IQ Challenge.

    brought to you by TravelPod, the Web’s Original Travel Blog ( A TripAdvisor Media Network member )

    I thought it was fun. 

    080516_farecast_when_and_where_3On a related note, here are some of my favorite Travel sites.

    Farecast:  This site has lots of nice features.  This link shows cheap fares from a city.  The graphic to the right shows other features to look for on that page.  For example:

    • when to travel (which days have the lowest fares), and
    • where to travel (which cities have the best deals).

    Kayak: Search 140+ travel sites at once to find and compare the cheapest fares from all sites together – great grids and filters to find what you are looking for fast.

    Airfare Watchdog:  Up-to-date list of low fares from major airlines (including Southwest).  You can subscribe to alerts too.

  • Travel IQ

    Trip Advisor has an interesting game called Traveler IQ Challenge.

    brought to you by TravelPod, the Web’s Original Travel Blog ( A TripAdvisor Media Network member )

    I thought it was fun. 

    080516_farecast_when_and_where_3On a related note, here are some of my favorite Travel sites.

    Farecast:  This site has lots of nice features.  This link shows cheap fares from a city.  The graphic to the right shows other features to look for on that page.  For example:

    • when to travel (which days have the lowest fares), and
    • where to travel (which cities have the best deals).

    Kayak: Search 140+ travel sites at once to find and compare the cheapest fares from all sites together – great grids and filters to find what you are looking for fast.

    Airfare Watchdog:  Up-to-date list of low fares from major airlines (including Southwest).  You can subscribe to alerts too.

  • Coupon to Buy Gas

    If it wasn’t so close to the truth, this would be funny.

    Gas_coupon

  • Market Wizard Sings the Truth

    This is a video done by Ed Seykota. He is a well-known trader and was featured in Jack Schwager’s great series on "Market Wizards."  His website is here. http://www.seykota.com/tribe/

    Here is the page link: http://www.youtube.com/watch?v=LiE1VgWdcQM

    interesting …

  • Market Wizard Sings the Truth

    This is a video done by Ed Seykota. He is a well-known trader and was featured in Jack Schwager’s great series on "Market Wizards."  His website is here. http://www.seykota.com/tribe/

    Here is the page link: http://www.youtube.com/watch?v=LiE1VgWdcQM

    interesting …