"Interestingly, koi, when put in a fish bowl, will only grow up to three inches.
When this same fish is placed in a large tank, it will grow to about nine inches long.
In a pond koi can reach lengths of eighteen inches. Amazingly, when placed in a lake, koi can grow to three feet long.
The metaphor is obvious. You are limited by how you see the world."
–via Vince Poscente
Election years are interesting.
Many believe that the Presidential Election Cycle affects the stock market.
Perhaps there is an easier explanation …
Here are some of the posts that caught my eye. Hope you find something interesting.
What you choose to look at … matters.
Not everything that can be counted counts, and not everything that counts can be counted.
A close look at trading in May shows a pretty clear negative bias. Here is a 10-minute bar chart of what's happened since May 1st on the S&P 500 Index.
Is that a warning sign or a buying opportunity?
'Sell in May" is a pretty well known trading concept. Here is a brief explanation from Carl Swenlin of DecisionPoint.
May 1 marked the beginning of a 6-month period of unfavorable seasonality. Research published by Yale Hirsch in the Trader's Almanac shows that the market year is broken into two six-month seasonality periods. From May 1 through October 31, seasonality is unfavorable, and the market most often finishes lower than it was at the beginning of the period.
The period from November 1 through April 30 is seasonally favorable, and the market most often finishes the period higher.
… While the statistical average results for these two periods are quite compelling, trying to ride the market in real-time in hopes of capturing these results is not always as easy as it sounds.
Below is the one-year chart that that shows the most recent two six-month periods. It begins on May 1, 2011 and ends on April 30, 2012.
The left half of the chart shows the unfavorable May through October period, and the right half shows the favorable November through April period. The green line marks the beginning of the favorable period. The red line marks the beginning of the unfavorable period.
Here is a Dow Jones Industrial Average chart illustrating that phenomenon.
Historically, the seasonality expected by 'Sell in May' has provided a trading edge.
However, scale and perspective do matter. For example, here is a weekly chart of the S&P 500 Index. From this perspective, the markets are arguably in an up-trend – and sitting on top of a pretty strong support.
While the MACD is testing a move beneath the zero line, price is the primary indicator … and is in a reasonably defensible buying area.
If the bulls hope to push things higher, this is where you would expect buying to occur.
We'll see.
What you choose to look at … matters.
Not everything that can be counted counts, and not everything that counts can be counted.
A close look at trading in May shows a pretty clear negative bias. Here is a 10-minute bar chart of what's happened since May 1st on the S&P 500 Index.
Is that a warning sign or a buying opportunity?
'Sell in May" is a pretty well known trading concept. Here is a brief explanation from Carl Swenlin of DecisionPoint.
May 1 marked the beginning of a 6-month period of unfavorable seasonality. Research published by Yale Hirsch in the Trader's Almanac shows that the market year is broken into two six-month seasonality periods. From May 1 through October 31, seasonality is unfavorable, and the market most often finishes lower than it was at the beginning of the period.
The period from November 1 through April 30 is seasonally favorable, and the market most often finishes the period higher.
… While the statistical average results for these two periods are quite compelling, trying to ride the market in real-time in hopes of capturing these results is not always as easy as it sounds.
Below is the one-year chart that that shows the most recent two six-month periods. It begins on May 1, 2011 and ends on April 30, 2012.
The left half of the chart shows the unfavorable May through October period, and the right half shows the favorable November through April period. The green line marks the beginning of the favorable period. The red line marks the beginning of the unfavorable period.
Here is a Dow Jones Industrial Average chart illustrating that phenomenon.
Historically, the seasonality expected by 'Sell in May' has provided a trading edge.
However, scale and perspective do matter. For example, here is a weekly chart of the S&P 500 Index. From this perspective, the markets are arguably in an up-trend – and sitting on top of a pretty strong support.
While the MACD is testing a move beneath the zero line, price is the primary indicator … and is in a reasonably defensible buying area.
If the bulls hope to push things higher, this is where you would expect buying to occur.
We'll see.
As a trader, I'm surprised by how different the market can look on different time-frames.
Getting a sense of scale is important. Sometimes the difference is bigger than you think.
Click the picture to launch a fascinating data visualisation created by Michael and Cary Huang. It is an interactive virtual scale of our universe that allows you to zoom in and out through space comparing the size and scale of everything from the smallest particles to immense nebulae.
Very Cool. Puts things in perspective.
Join David Stendahl, portfolio manager at Capitalogix, at the Traders Expo in Dallas Texas June 6 – 8.
David will be talking about effective way to build diversified futures portfolios. Click here for more information.
I'll be there too. Let me know if you're going … looking forward to seeing you at the Expo.
Join David Stendahl, portfolio manager at Capitalogix, at the Traders Expo in Dallas Texas June 6 – 8.
David will be talking about effective way to build diversified futures portfolios. Click here for more information.
I'll be there too. Let me know if you're going … looking forward to seeing you at the Expo.
Here are some of the posts that caught my eye. Hope you find something interesting.
Here are some of the posts that caught my eye. Hope you find something interesting.
It's almost summer.
So, the winter hibernation period is officially over.
However, I noticed a disturbing trend (at least for me). Here's a picture showing how my weight has fluctuated for the past year. I wonder why?
The chart is interesting for a couple of reasons. The first is that the data is plotted automatically using a Withings scale. It's wireless, and once you set it up, all you have to do is stand on the scale, and it does the rest for you. It also links to various fitness tracking sites (like Fitbit). It is very convenient.
The Big Bull Market in My Ass.
Everything appeared to be going well until November. At that point, the trend changed and my weight began climbing a wall of worry.
Until Jen and I took a trip to Asia last November, we had been going to the gym, running in the park, and using a personal trainer. The chart tells the rest of the story.
Did I gain weight because I stopped going to Delano (the personal trainer)? … was it because I stopped running? … or was it Seasonal Affect Disorder ("SAD")? Nope, the only thing "sad" is how few of my skinny pants still fit.
This chart is somewhat like a market chart. It's easy to attribute causes to something that was really only coincident. Going to Asia didn't cause my laziness. My time off from personal training was a symptom rather than the cause.
Ultimately, it doesn't really matter why something happened, what matters is what you choose to do now.
Hmm … sounds like the first lesson of trend trading. Click here for more.
