August 2006

This chart jumped onto my leg and started to hump?it like a dog wearing plaid.? In other words,?the pattern I saw just couldn’t be ignored.

Real Median Household Income? (more…)

It’s times like these that I’m reminded of that chapter in Practical Speculation about the market “Mad Lib” where you could mimick the media’s attempts to explain market movement by plugging in random investment terms into a stock article.

Today the stock market moved higher/lower on news of higher/lower inflation/confidence/oil.? This is certainly bullish/bearish for stocks/bonds.

Mr. Pundit,?in case you haven’t noticed, the stock market is asleep/on vacation in Mexico?and is merely twitching from a bad/good dream/enchilada dinner.? You choose.? This is a Mad Lib after all. (more…)

I thought I’d throw another log on the bondfire.? Get it?? Bondfire.? You know like bonfire.? Except it’s bond.? Man, I kill me.? I could pun on the word “bond” all day long.

Anyway, I’m the last person on earth that is really qualified to talk about bond trading or investing so I’m not trying to make any commentary about what should be done in that market.? I have zero real opinion one way or another personally.? But I only thought this article painted an interesting picture.? I’m not sure what timeframe is really involved here but it’s worth factoring in to any analysis.

Remember the wise words of Wu-Tang Financial…

FYI, both Fidelity and Vanguard posted 401K contributions yesterday.? Notice that it was a solid up day for nearly all markets.? What’s interesting is how both companies invested me and my significant other’s holdings on the same day, although typically my significant other is invested a couple days earlier, and my 401K is invested a few days later than this time of the month.? If I think of it, I’ll continue to report when there are significant 401K contribution events.? Food for thought that it’s not just oil going up or down that makes the markets move–I think overall cash flow is far more important!

While thinking of underappreciated investment analysis techniques, I just thought of one that I freely admit to skipping: before making a decision about where to invest, write yourself a draft e-mail about why this stock/fund/etc is worth buying now. Jot down some bullet points about why, from the current perspective, the stock looks promising. On a weekly or monthly basis, review this e-mail to yourself and see if the situation has changed significantly and adjust your position accordingly. (more…)

As you both know from the last meeting, I’m launching a quest to better understand sectors. Knowledge of sectors and which sectors are hot or cold is vital to individual stock picking, since analyzing the sector performance and ranking vs. other sectors should be one of the first criteria any trader or short-term (less than 1 yr) investor employs to determine whether a stock is a buy or sell. The strength or weakness of the sector is useful and can be a primary component of buy and sell decisions for individual stocks.

The absolute best sector analysis tool can be found here: (more…)

No, not the blog (or rather the blog of other blogs).? I mean specifically the alpha that they are seeking.? What is it? (more…)

Of?all techniques used to analyze markets, the one that I find underappreciated is market profiling and auction market value theory.? This style was first codified?by CBOT as Market Profile.? But the basic principal is finding areas of price that generate more ticks of trading than others.? I’ve talked of this before as “density” areas. (more…)

If you want to experience a really good time, browse this Yahoo! Message Board for CSCO from March 27th, 2000.? On this day, CSCO peaked and never looked back.? Browse through with the arrow buttons and read how violently they responded to negative posters and how cocky they all were. I never realized that these old boards could still be read.? Imagine all of the gems of the past that you could explore.

I feel like most people don’t give weekly charts their proper respect. Take a look at the daily and the weekly charts for the NDX. While many people will look for various moving averages or other technical indicators to show trend and direction of price, sometimes it just pays to simply zoom out to the weekly chart.

In the case of the NDX’s daily and weekly charts, it seems like the weekly chart smoothes out a lot of the daily noise, but it still captures the entire range for the week in its high and low marks. It also shows nicely that the trading ranges each week are fairly wide, and only in a few specific weeks did we really have strong movement significantly beyond the previous week’s trading range. (more…)

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