question the deport market's viability dorsum inward March was the difference inward coin flows for the Dow as well as S&P stocks relative to January. Although nosotros saw fresh cost lows inward March, higher lows inward coin flows suggested that selling was drying up. These divergences were confirmed past times the fewer stocks making 52-week lows inward March relative to Jan as well as past times a host of sectors that failed to brand fresh cost lows inward March. Money flows are thence role of a larger flick of marketplace participation that tin rank us when provide or postulate is growing or waning.
In my recent post, I noted a coin time period difference inside the S&P 500 unloose energy sector (XLE). As cost has moved higher, we're seeing lower peaks inward coin flow, suggesting that postulate for the unloose energy stocks may live on drying up.
Interestingly, we're seeing a like designing amidst the materials stocks from the S&P 500 universe (XLB; run past times chart) as well as amidst the consumer staples issues (XLP; bottom chart). Price has been moving higher for those sectors during May, but coin flows accept been weakening. This tells us that, overall, upticks accept been occurring on lower book than downticks--a sign that large investors as well as traders are leaning to the sell side.
Taken alone, these divergences are exactly yellowish caution lights for the sectors. When they are occurring across a large number of stocks as well as sectors, they are caution lights for the broader market. It's when nosotros come across waning flows accompanied past times fewer stocks making fresh cost highs; divergences inward the cumulative NYSE TICK; as well as divergences inward the number of stocks closing inward a higher house their long-term moving averages that it makes feel to buy the farm concerned nearly meaning cost reversals. I volition live on examining those latter indicators tomorrow inward my indicator update post.
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Friday, June 30, 2006
Thursday, June 29, 2006
Wednesday, June 28, 2006
Info!! Indicator Review For June 2Nd
Last week's indicator review noted weakness across many of the measures inwards the wake of a several-day pullback. We've since bounced from those toll lows, but rest good off the highs across virtually of the indicators. Money flows to the S&P 500 stocks expire on to last weak, with divergences mutual since April.
Interestingly, the coin stream divergences jibe what we're seeing inwards the cumulative NYSE TICK (bottom chart), which has shown tepid clitoris since its meridian on Apr seventh in addition to which is currently good off its highs. Unlike coin flow, TICK is non book based, suggesting that we're non but seeing waning summertime volume. Rather, buyer involvement itself seems to last waning since that early on Apr period.
Still, that did non preclude us from making fresh peaks inwards the number of stocks making novel 65-day highs (top chart) during May. Since the pullback 2 weeks ago, the market's bounce has left us good shy of those peaks then far. On Th in addition to Friday, for example, nosotros registered 48 in addition to 57 novel 52-week highs respectively across the NYSE mutual stocks against xvi in addition to eighteen novel lows. By comparison, nosotros had over 150 novel highs 2 weeks ago.
In by indicator reviews, I've noted considerable sector rotation in addition to divergence, fifty-fifty inside the S&P 500 large-cap universe. This continues at acquaint in addition to appears to last a major argue we're non seeing to a greater extent than broad-based clitoris since the January/March marketplace bottom. For example, we're exclusively seeing 30% of fiscal stocks trading inwards a higher house their 20-day moving averages, but 78% of engineering scientific discipline stocks. Materials issues convey shown recent weakness inwards the wake of pullbacks alongside commodities--only 54% are inwards a higher house their 20-day averages--but previously weak wellness attention issues convey bounced, with 73% inwards a higher house their benchmarks.
All inwards all, the weakness inwards TICK in addition to coin flows in addition to the relative functioning of sectors suggests 2 things: 1) that to a greater extent than coin is shifting from sector to sector than genuinely entering the stock market; in addition to 2) that when coin is entering the market, it is doing then selectively (commodity-based themes, technology). This is non necessarily a prescription for a fresh acquit market, but it every bit good is non a company foundation for a sustained marketplace rally. For this reason, as my recent post indicated, I am beingness to a greater extent than tactical than long-term strategic inwards my ain trading.
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Interestingly, the coin stream divergences jibe what we're seeing inwards the cumulative NYSE TICK (bottom chart), which has shown tepid clitoris since its meridian on Apr seventh in addition to which is currently good off its highs. Unlike coin flow, TICK is non book based, suggesting that we're non but seeing waning summertime volume. Rather, buyer involvement itself seems to last waning since that early on Apr period.
Still, that did non preclude us from making fresh peaks inwards the number of stocks making novel 65-day highs (top chart) during May. Since the pullback 2 weeks ago, the market's bounce has left us good shy of those peaks then far. On Th in addition to Friday, for example, nosotros registered 48 in addition to 57 novel 52-week highs respectively across the NYSE mutual stocks against xvi in addition to eighteen novel lows. By comparison, nosotros had over 150 novel highs 2 weeks ago.
In by indicator reviews, I've noted considerable sector rotation in addition to divergence, fifty-fifty inside the S&P 500 large-cap universe. This continues at acquaint in addition to appears to last a major argue we're non seeing to a greater extent than broad-based clitoris since the January/March marketplace bottom. For example, we're exclusively seeing 30% of fiscal stocks trading inwards a higher house their 20-day moving averages, but 78% of engineering scientific discipline stocks. Materials issues convey shown recent weakness inwards the wake of pullbacks alongside commodities--only 54% are inwards a higher house their 20-day averages--but previously weak wellness attention issues convey bounced, with 73% inwards a higher house their benchmarks.
All inwards all, the weakness inwards TICK in addition to coin flows in addition to the relative functioning of sectors suggests 2 things: 1) that to a greater extent than coin is shifting from sector to sector than genuinely entering the stock market; in addition to 2) that when coin is entering the market, it is doing then selectively (commodity-based themes, technology). This is non necessarily a prescription for a fresh acquit market, but it every bit good is non a company foundation for a sustained marketplace rally. For this reason, as my recent post indicated, I am beingness to a greater extent than tactical than long-term strategic inwards my ain trading.
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Tuesday, June 27, 2006
Info!! Weakness Inward Fiscal Stocks As Well As Other Marketplace Pose Themes
the blueprint noted inwards the before post. Falling yields/rising treasuries (flight to quality); weak NYSE TICK; rising Yen/US Dollar: it was a squeamish example of how intraday themes tin dismiss combine amongst longer-term query to furnish an edge. Among the to a greater extent than of import themes, however, was the weakness inwards the banking sector. As the move on nautical chart indicates, the banking sector ($BKX) is testing comport marketplace lows, in addition to the six-month advance-decline business for S&P fiscal stocks (XLF; bottom chart) is doing the same. This continues the really mixed functioning of sectors noted in my prior post.
* More on Mixed Sector Performance - Monday's functioning left us amongst 648 stocks across the NYSE, ASE, in addition to NASDAQ making fresh 20-day highs against 950 making 20-day lows. Clearly we're seeing roughly areas of relative forcefulness inwards the marketplace in addition to other areas of distinctive weakness. Although we're close bull swing highs inwards the NASDAQ 100 Index ($NDX) in addition to Russell 2000 Index ($RUT), the S&P 500 ($SPX) universe is much shakier. Among my handbasket of forty stocks taken evenly from 8 dissimilar sectors, nosotros cause got nine stocks qualifying every bit existence inwards short-term uptrends; 10 neutral; in addition to 21 inwards downtrends. Only 55% of $SPX stocks are trading inwards a higher house their 50-day moving averages, downwards from 80% at the marketplace peak.
* Housing Rebound? Among the sectors hitting two-month lows on Mon were the housing stocks ($HGX). The index has been inwards a broad arrive at since December, 2007; the resolution of that arrive at volition enjoin us quite a combat almost non solely housing, only the broader economy.
* Election Anticipation? Among ii sectors probable to last impacted yesteryear the U.S. Presidential election, pharmaceutical stocks ($DRG) cause got been inwards the toilet, only defence issues ($DFX) cause got bounced nicely from their comport lows. Even if nosotros were to withdraw from Iraq, there's a fair total of country of war machine rebuilding that mightiness demand to become done, only drugs cause got to last a major focus of cost-cutting inwards wellness care.
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* More on Mixed Sector Performance - Monday's functioning left us amongst 648 stocks across the NYSE, ASE, in addition to NASDAQ making fresh 20-day highs against 950 making 20-day lows. Clearly we're seeing roughly areas of relative forcefulness inwards the marketplace in addition to other areas of distinctive weakness. Although we're close bull swing highs inwards the NASDAQ 100 Index ($NDX) in addition to Russell 2000 Index ($RUT), the S&P 500 ($SPX) universe is much shakier. Among my handbasket of forty stocks taken evenly from 8 dissimilar sectors, nosotros cause got nine stocks qualifying every bit existence inwards short-term uptrends; 10 neutral; in addition to 21 inwards downtrends. Only 55% of $SPX stocks are trading inwards a higher house their 50-day moving averages, downwards from 80% at the marketplace peak.
* Housing Rebound? Among the sectors hitting two-month lows on Mon were the housing stocks ($HGX). The index has been inwards a broad arrive at since December, 2007; the resolution of that arrive at volition enjoin us quite a combat almost non solely housing, only the broader economy.
* Election Anticipation? Among ii sectors probable to last impacted yesteryear the U.S. Presidential election, pharmaceutical stocks ($DRG) cause got been inwards the toilet, only defence issues ($DFX) cause got bounced nicely from their comport lows. Even if nosotros were to withdraw from Iraq, there's a fair total of country of war machine rebuilding that mightiness demand to become done, only drugs cause got to last a major focus of cost-cutting inwards wellness care.
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Monday, June 26, 2006
Info!! Themes As Well As Thoughts To Kickoff A Tuesday
more from The Kirk Report.
* Hitting Resistance - Trader Mike is doing a neat labor cutting through the fog of coverage of economical data. I abide by the nuclear theme quite interesting correct here.
* Weakness Among United States of America together with Cities - The Big Picture tracks an of import theme, every bit economical weakness affects states together with cities together with passes through to the economy.
* Keeping Up With the Blogs - Newsflashr getting goodness reviews of his recent mass on technical analysis.
* After a Big Down Day - Quantifiable Edges finds...an edge!
* Training the Brain - Thought-provoking interviews alongside neuroscience experts from Sharp Brains.
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* Hitting Resistance - Trader Mike is doing a neat labor cutting through the fog of coverage of economical data. I abide by the nuclear theme quite interesting correct here.
* Weakness Among United States of America together with Cities - The Big Picture tracks an of import theme, every bit economical weakness affects states together with cities together with passes through to the economy.
* Keeping Up With the Blogs - Newsflashr getting goodness reviews of his recent mass on technical analysis.
* After a Big Down Day - Quantifiable Edges finds...an edge!
* Training the Brain - Thought-provoking interviews alongside neuroscience experts from Sharp Brains.
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Info!! Changing Minds As Well As Markets: Character Command Inwards Trading
Suppose a mortal has demonstrated trading skills: an might to read markets based upon lengthy exposure to alive markets too internalization of trading patterns. What would drive such a trader to give-up the ghost into a prolonged slump?
One possibility is changing markets. If the patterns familiar to the trader change, thence at that topographic point is a involve for a fresh learning curve. I run into this really oft when markets alter their volatility, every bit has happened from the offset quarter of the twelvemonth to the minute quarter (and every bit has been happening from 24-hour interval to 24-hour interval at times). Inability to accommodate to changes inwards the market's vogue to follow through on moves creates losses (or missed opportunities), which thence creates frustration, which thence leads to farther trading problems.
A minute possibility is that changes inwards the trader's heed patch effect inwards variability inwards the sensitivity to marketplace patterns. Though those patterns may survive stable, the trader's frame of heed may vary from warning to bored to fatigued; mood may vary from positive to neutral to negative. Variation inwards concentration would Pb to variation inwards might to selection upward patterns. Divided attending would create interference inwards one's experience for markets.
The challenge for traders inwards slumps is to differentiate betwixt these 2 sources of trading problems. My feel is that likewise footling idea goes into both alternatives: traders don't systematically await at markets over fourth dimension too their changes, too they don't accept fourth dimension each 24-hour interval to standardize their mental too physical states. If traders were manufacturers, they would take away maintain wretched lineament control.
Of course, all this solely makes feel for traders who take away maintain developed kernel skills too the might to read patterns inwards markets. The bulk of trading problems, I believe, come upward neither from changing markets nor changing minds, but the lack of fourth dimension too endeavor devoted to systematic marketplace learning. It's when those skills *have* developed that lineament command becomes every bit of import for traders every bit for car makers too restaurants. I'm non certain most traders know their lineament or know how to better it. That's something I'm thinking a lot nearly every bit I trek the Pacific Northwest this week.
RELATED POSTS:
Somatic Markers too Trading
One possibility is changing markets. If the patterns familiar to the trader change, thence at that topographic point is a involve for a fresh learning curve. I run into this really oft when markets alter their volatility, every bit has happened from the offset quarter of the twelvemonth to the minute quarter (and every bit has been happening from 24-hour interval to 24-hour interval at times). Inability to accommodate to changes inwards the market's vogue to follow through on moves creates losses (or missed opportunities), which thence creates frustration, which thence leads to farther trading problems.
A minute possibility is that changes inwards the trader's heed patch effect inwards variability inwards the sensitivity to marketplace patterns. Though those patterns may survive stable, the trader's frame of heed may vary from warning to bored to fatigued; mood may vary from positive to neutral to negative. Variation inwards concentration would Pb to variation inwards might to selection upward patterns. Divided attending would create interference inwards one's experience for markets.
The challenge for traders inwards slumps is to differentiate betwixt these 2 sources of trading problems. My feel is that likewise footling idea goes into both alternatives: traders don't systematically await at markets over fourth dimension too their changes, too they don't accept fourth dimension each 24-hour interval to standardize their mental too physical states. If traders were manufacturers, they would take away maintain wretched lineament control.
Of course, all this solely makes feel for traders who take away maintain developed kernel skills too the might to read patterns inwards markets. The bulk of trading problems, I believe, come upward neither from changing markets nor changing minds, but the lack of fourth dimension too endeavor devoted to systematic marketplace learning. It's when those skills *have* developed that lineament command becomes every bit of import for traders every bit for car makers too restaurants. I'm non certain most traders know their lineament or know how to better it. That's something I'm thinking a lot nearly every bit I trek the Pacific Northwest this week.
RELATED POSTS:
Somatic Markers too Trading
Sunday, June 25, 2006
Info!! The Trader Equally Manager: Implications Of Lineament Together With Trading
The final post took an initial await at character command inward trading. This stemmed from my realization that fifty-fifty relatively disciplined traders (including myself) pursue markets amongst a degree of standardization that would last unthinkably depression inward the employment concern world. One of the factors that has made a Toyota, Starbucks, or McDonald's then successful is that character is controlled, across people in addition to settings, twenty-four hr catamenia afterwards twenty-four hr catamenia in addition to twelvemonth afterwards year. That requires an unusually high degree of managerial planning in addition to oversight.
Trading is oftentimes described every bit a business, in addition to traders are encouraged to care for their trading every bit a business. Many writers utter well-nigh the importance of employment concern planning inward trading. But if traders are to really care for their travel inward a businesslike fashion, they postulate to a greater extent than than planning. They postulate to serve every bit the managers of their businesses. The maintenance of character is ane of import facet of that management.
If nosotros intend well-nigh trading inward character terms, nosotros desire to seat the inputs into trading decisions, the processes past times which decisions are made, in addition to the outputs from those decisions. Inputs tin hand the axe last defined past times the data that nosotros postulate to physical care for to brand our best decisions. Processes involve data processing itself, including our mightiness to keep a mindset conducive to optimal determination making. The outputs from trading decisions include the orders that nosotros place, our management of those positions, in addition to the profits that accrue.
The outset sign of character command problems inward trading is lack of consistency. Inconsistency of inputs reflects variability inward our preparation: sometimes we're to a greater extent than prepared for trading--we've done to a greater extent than in addition to improve homework--than other times. Inconsistency tin hand the axe also last acquaint inward our trading processes: variability inward our solid soil of hear piece trading in addition to our next of rules. Inconsistency oftentimes outset shows upward inward trading outputs: variability inward profitability, simply also variation inward how nosotros size trades in addition to cause got profits in addition to losses.
If a trader really operated every bit a business, he or she would seat "best practices" in addition to plow these into measure operating procedures, amongst careful managerial oversight to ensure that these procedures are followed. Few of us really know our best practices, however. It is impossible to implement character if nosotros cause got non made ourselves objects of our ain study.
It is of import to last one's ain trading coach, simply successful sports teams postulate managers every bit good every bit coaches. Writing out a employment concern innovation is the tardily part. Managing that innovation over fourth dimension in addition to becoming every bit consistent every bit a Toyota: that's a challenge. More on this appear of working on oneself to come upward shortly.
RELATED POST:
Blueprint for an Uncompromised Life
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Trading is oftentimes described every bit a business, in addition to traders are encouraged to care for their trading every bit a business. Many writers utter well-nigh the importance of employment concern planning inward trading. But if traders are to really care for their travel inward a businesslike fashion, they postulate to a greater extent than than planning. They postulate to serve every bit the managers of their businesses. The maintenance of character is ane of import facet of that management.
If nosotros intend well-nigh trading inward character terms, nosotros desire to seat the inputs into trading decisions, the processes past times which decisions are made, in addition to the outputs from those decisions. Inputs tin hand the axe last defined past times the data that nosotros postulate to physical care for to brand our best decisions. Processes involve data processing itself, including our mightiness to keep a mindset conducive to optimal determination making. The outputs from trading decisions include the orders that nosotros place, our management of those positions, in addition to the profits that accrue.
The outset sign of character command problems inward trading is lack of consistency. Inconsistency of inputs reflects variability inward our preparation: sometimes we're to a greater extent than prepared for trading--we've done to a greater extent than in addition to improve homework--than other times. Inconsistency tin hand the axe also last acquaint inward our trading processes: variability inward our solid soil of hear piece trading in addition to our next of rules. Inconsistency oftentimes outset shows upward inward trading outputs: variability inward profitability, simply also variation inward how nosotros size trades in addition to cause got profits in addition to losses.
If a trader really operated every bit a business, he or she would seat "best practices" in addition to plow these into measure operating procedures, amongst careful managerial oversight to ensure that these procedures are followed. Few of us really know our best practices, however. It is impossible to implement character if nosotros cause got non made ourselves objects of our ain study.
It is of import to last one's ain trading coach, simply successful sports teams postulate managers every bit good every bit coaches. Writing out a employment concern innovation is the tardily part. Managing that innovation over fourth dimension in addition to becoming every bit consistent every bit a Toyota: that's a challenge. More on this appear of working on oneself to come upward shortly.
RELATED POST:
Blueprint for an Uncompromised Life
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Saturday, June 24, 2006
Info!! A Quick Review Of Stock Marketplace Pose Sectors
With Thursday's powerful rise, nosotros had 809 stocks across the NYSE, NASDAQ, as well as ASE register fresh 65-day highs as well as 1257 tape novel 20-day highs. By contrast, nosotros had 227 as well as 604 novel lows, respectively. While these numbers are below peaks recorded a few weeks ago, they're a meaningful turnaround from recent weakness. Demand, a mensurate of strong upside momentum, shut at 163; Supply at 24. That indicates that the ascension was broad, affecting the bulk of issues. This is equally good reflected inward the relative describe of the modest caps, amongst the Russell 2000 futures hitting a post-March cost high.
My technical describe mensurate is a method of quantifying cost trending deportment over a short-to-intermediate term fourth dimension frame. Here's how the S&P 500 sectors await at acquaint inward damage of technical strength:
MATERIALS: -160
INDUSTRIALS: -40
CONSUMER DISCRETIONARY: +220
CONSUMER STAPLES: +220
ENERGY: +180
HEALTH CARE: +280
FINANCIAL: -320
TECHNOLOGY: +340
What nosotros tin laissez passer on notice meet is that, equally a group, there's been a dainty turnaround from recent lows, exactly nosotros maintain to meet real mixed sector performance. The weakness inward the materials sector as well as the restrained describe of the liberate energy shares are especially noteworthy, equally commodities quest hold been surgical physical care for leaders of late.
Technology remains a surgical physical care for leader, which is consistent amongst my recent findings on coin flows. The big story, perhaps, remains fiscal shares, which maintain to lag badly. We've seen many steps taken to stabilize vulnerable banks, as well as these quest hold even as well as hence to interpret into meaningful, sustained confidence inward the sector. This remains a potential Achilles heel for the market's attempted recovery.
RELATED POST:
Money Flow Analysis
My technical describe mensurate is a method of quantifying cost trending deportment over a short-to-intermediate term fourth dimension frame. Here's how the S&P 500 sectors await at acquaint inward damage of technical strength:
MATERIALS: -160
INDUSTRIALS: -40
CONSUMER DISCRETIONARY: +220
CONSUMER STAPLES: +220
ENERGY: +180
HEALTH CARE: +280
FINANCIAL: -320
TECHNOLOGY: +340
What nosotros tin laissez passer on notice meet is that, equally a group, there's been a dainty turnaround from recent lows, exactly nosotros maintain to meet real mixed sector performance. The weakness inward the materials sector as well as the restrained describe of the liberate energy shares are especially noteworthy, equally commodities quest hold been surgical physical care for leaders of late.
Technology remains a surgical physical care for leader, which is consistent amongst my recent findings on coin flows. The big story, perhaps, remains fiscal shares, which maintain to lag badly. We've seen many steps taken to stabilize vulnerable banks, as well as these quest hold even as well as hence to interpret into meaningful, sustained confidence inward the sector. This remains a potential Achilles heel for the market's attempted recovery.
RELATED POST:
Money Flow Analysis
Friday, June 23, 2006
Info!! Getting Off The Functioning Roller Coaster
A surprising release of traders I require heed from as well as operate amongst sense what mightiness hold out called a functioning roller-coaster. They brand coin for a while, as well as hence conk sloppy as well as overly aggressive inwards their trading. This leads to harrowing as well as frustrating losses, which inwards plough strength them to focus their efforts as well as resume trading well. Not infrequently, these traders sense several boom-and-bust cycles earlier they give out to attempt help.
The culprit inwards this scenario is overconfidence. Trading gains atomic number 82 to heightened expectations, which inwards plough facilitate overtrading. These changed expectations, ironically, atomic number 82 traders to alter how they're trading correct at the fourth dimension they're trading at their best! Instead of existence satisfied amongst their gains, they press to make more. This leads to crippling drawdowns, because they're trading almost aggressively fifty-fifty every bit they've strayed from their best trading.
My recent post focused on the importance of self-management inwards trading. Influenza A virus subtype H5N1 really perceptive reader who had experienced approximately of these trading ups as well as downs wrote to me late as well as described a scoring organization that he implemented for his trading. The organization gave him points each twenty-four hours based upon his training for the day, the lineament of his trading ideas; his execution of those ideas; as well as his management of the trades. Instead of focusing on his P/L each day, he has been emphasizing keeping his trading grade high. This has aided his consistency, as well as that has paid off inwards profitability.
Another savvy trader wrote to me as well as described how he used visualization techniques each twenty-four hours to convince himself that he was coming dorsum from a drawdown--regardless where his actual equity bend stood. By mentally rehearsing this "coming dorsum from drawdown" mode, he also kept the focus on the *process* of trading, resulting inwards his best as well as almost consistent profitability to date.
That is the paradox at the middle of trading as well as many other functioning activities. The destination is profitability, simply the best practise is to non focus on the goal. By staying connected to the processes that atomic number 82 to the goal, nosotros maintain consistency inwards our expectations, mood, as well as outlook--and that pays off inwards consistent performance.
RELATED POSTS:
Overconfidence inwards Trading
Top Reasons Traders Lose Their Discipline
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The culprit inwards this scenario is overconfidence. Trading gains atomic number 82 to heightened expectations, which inwards plough facilitate overtrading. These changed expectations, ironically, atomic number 82 traders to alter how they're trading correct at the fourth dimension they're trading at their best! Instead of existence satisfied amongst their gains, they press to make more. This leads to crippling drawdowns, because they're trading almost aggressively fifty-fifty every bit they've strayed from their best trading.
My recent post focused on the importance of self-management inwards trading. Influenza A virus subtype H5N1 really perceptive reader who had experienced approximately of these trading ups as well as downs wrote to me late as well as described a scoring organization that he implemented for his trading. The organization gave him points each twenty-four hours based upon his training for the day, the lineament of his trading ideas; his execution of those ideas; as well as his management of the trades. Instead of focusing on his P/L each day, he has been emphasizing keeping his trading grade high. This has aided his consistency, as well as that has paid off inwards profitability.
Another savvy trader wrote to me as well as described how he used visualization techniques each twenty-four hours to convince himself that he was coming dorsum from a drawdown--regardless where his actual equity bend stood. By mentally rehearsing this "coming dorsum from drawdown" mode, he also kept the focus on the *process* of trading, resulting inwards his best as well as almost consistent profitability to date.
That is the paradox at the middle of trading as well as many other functioning activities. The destination is profitability, simply the best practise is to non focus on the goal. By staying connected to the processes that atomic number 82 to the goal, nosotros maintain consistency inwards our expectations, mood, as well as outlook--and that pays off inwards consistent performance.
RELATED POSTS:
Overconfidence inwards Trading
Top Reasons Traders Lose Their Discipline
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Thursday, June 22, 2006
Info!! Knowing When To Plough It Off
One of the highlights of my recent swing through the Pacific Northwest has been a watch amongst Henry Carstens in addition to his lovely family. In illustration you're non aware, Henry has quietly construct a premiere website featuring his Testing Trading Ideas
Keys to Trading Success
Designing Trading Strategies
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Keys to Trading Success
Designing Trading Strategies
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Wednesday, June 21, 2006
Info!! Indicator Review For June 9Th
Last week's indicator review emphasized a lack of buyer involvement manifesting itself across a diversity of measures. Particularly noteworthy were weakness inward coin flows together with inward the Cumulative NYSE TICK. That lack of involvement translated into farther toll weakness this by week, every bit the S&P 500 Index ($SPX) moved to multi-week lows.
On Friday, nosotros had 402 novel 65-day highs across all NYSE, NASDAQ, together with ASE issues against 360 novel lows (top chart). The latter is the highest compass of novel lows since mid-April. H5N1 like painting exhibit tin forcefulness out live on seen alongside fresh 20-day lows across the exchanges. Fri recorded 642 novel 20-day highs against 1242 novel lows. That is the highest compass of novel 20-day lows since March 20th.
This weakness has hitting a bulk of stock marketplace sectors. Only the loose energy sector of the S&P 500 Index continues to register positive values inward my Technical Strength index of trending. Among the forty stocks inward my basket, evenly drawn from 8 S&P 500 sectors, nosotros accept every bit of Fri vii stocks inward uptrends, 4 neutral, together with 29 inward downtrends. Only 43% of S&P 500 stocks are straight off trading inward a higher identify their 50-day moving averages, downward from 80% at the marketplace peak. Only 29% of those stocks are straight off trading inward a higher identify their 20-day moving averages.
Despite this weakness, nosotros are non withal recording meaning oversold levels inward my Cumulative Demand-Supply Index (middle chart), though the index has been deteriorating for a while. Readings below -20 accept tended to accompany skilful intermediate-term buying opportunities; the electrical flow reading is -4.69.
Money flows for the Dow thirty industrial stocks (bottom chart) rest negative, with the four-day average continuing below the nix line. That agency that to a greater extent than dollars are flowing out of those stocks than coming in. Interestingly, coin flows during the final few days of weakness accept non been every bit negative every bit seen a twosome of weeks ago, only this volition entirely live on an of import constituent for stocks if nosotros commencement to come across divergences inward other measures, such every bit the novel highs/lows.
In all, there's non much to live on excited well-nigh for the bulls. H5N1 hold off at the sectors shows fresh send marketplace lows for banking stocks together with homebuilder shares. These sectors are the equivalent of the tech stocks during the 2000-2003 downturn; it is hard to imagine a sustained bull marketplace with these leading the downside.
RELEVANT POST:
Review of Sector Performance
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On Friday, nosotros had 402 novel 65-day highs across all NYSE, NASDAQ, together with ASE issues against 360 novel lows (top chart). The latter is the highest compass of novel lows since mid-April. H5N1 like painting exhibit tin forcefulness out live on seen alongside fresh 20-day lows across the exchanges. Fri recorded 642 novel 20-day highs against 1242 novel lows. That is the highest compass of novel 20-day lows since March 20th.
This weakness has hitting a bulk of stock marketplace sectors. Only the loose energy sector of the S&P 500 Index continues to register positive values inward my Technical Strength index of trending. Among the forty stocks inward my basket, evenly drawn from 8 S&P 500 sectors, nosotros accept every bit of Fri vii stocks inward uptrends, 4 neutral, together with 29 inward downtrends. Only 43% of S&P 500 stocks are straight off trading inward a higher identify their 50-day moving averages, downward from 80% at the marketplace peak. Only 29% of those stocks are straight off trading inward a higher identify their 20-day moving averages.
Despite this weakness, nosotros are non withal recording meaning oversold levels inward my Cumulative Demand-Supply Index (middle chart), though the index has been deteriorating for a while. Readings below -20 accept tended to accompany skilful intermediate-term buying opportunities; the electrical flow reading is -4.69.
Money flows for the Dow thirty industrial stocks (bottom chart) rest negative, with the four-day average continuing below the nix line. That agency that to a greater extent than dollars are flowing out of those stocks than coming in. Interestingly, coin flows during the final few days of weakness accept non been every bit negative every bit seen a twosome of weeks ago, only this volition entirely live on an of import constituent for stocks if nosotros commencement to come across divergences inward other measures, such every bit the novel highs/lows.
In all, there's non much to live on excited well-nigh for the bulls. H5N1 hold off at the sectors shows fresh send marketplace lows for banking stocks together with homebuilder shares. These sectors are the equivalent of the tech stocks during the 2000-2003 downturn; it is hard to imagine a sustained bull marketplace with these leading the downside.
RELEVANT POST:
Review of Sector Performance
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Info!! Trading Views From Across The Blogosphere
This linkfest outlines to a greater extent than or less of my favorite resources for trader development.
* Themes in addition to Perspectives - Bear markets, recessions, in addition to the inflation threat; great links from Kirk.
* Market Views - Crossing Wall St. finds no edge to buying afterwards upward days inwards the market.
* ETF Themes That Are Working - More worthwhile perspectives from Jeff Miller.
* Seek in addition to Ye Shall Find - An investment weblog search engine from Mebane Faber.
* Undercapitalized? - Research Recap looks at banks in addition to their capitalization.
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* Themes in addition to Perspectives - Bear markets, recessions, in addition to the inflation threat; great links from Kirk.
* Market Views - Crossing Wall St. finds no edge to buying afterwards upward days inwards the market.
* ETF Themes That Are Working - More worthwhile perspectives from Jeff Miller.
* Seek in addition to Ye Shall Find - An investment weblog search engine from Mebane Faber.
* Undercapitalized? - Research Recap looks at banks in addition to their capitalization.
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Tuesday, June 20, 2006
Info!! Fresh Challenges For Housing?
Bond prices (AGG; tiptop chart) bring moved to their lowest levels (i.e., highest yields) since October, 2007 inwards the wake of Fed concerns over inflation too possible involvement charge per unit of measurement tightening.
Meanwhile, the homebuilders index ($HGX; bottom chart) is testing its demeanor marketplace lay lows, having sustained none of the gains from before Fed easing. As mortgage rates follow bond yields, ascension to multi-month highs too the USA dollar remains mired inwards its long slide, it's non clear that housing volition discovery back upwards from monetary easing whatever fourth dimension soon.
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Monday, June 19, 2006
Info!! Intraday Thought As Well As A Piffling Update
* Intraday Sentiment - Here's a await at the equity put/call ratio on a 5 infinitesimal the world (bottom chart) as well as a comparable nautical chart for the ES futures (top chart). Put buying expanded early on inward the morning, but prices held inward a higher house their overnight lows, suggesting underlying strength. Note besides the dramatic expansion of lay buying relative to calls to a greater extent than or less 1 PM CT, subsequently the marketplace had been selling off. This was a overnice say for lucre taking on the brusk side, every bit cost stopped moving lower despite increasing bearishness. Looking at selection majority intraday provides a overnice window on rattling short-term speculative sentiment.
* New Outlet for - Selected posts from this weblog bring appeared on the Seeking Alpha site for a piece now. Starting today, selected posts volition besides look on the Morningstar site, every bit purpose of their community building. Here's the page featuring their other blogs. My feel is that Morningstar does a responsible, lineament project of providing information to private investors (as opposed to short-term traders); therefore my willingness to participate inward their community.
* Influenza A virus subtype H5N1 Little Somethin' Somethin' - The Twitter Trader characteristic is actually a weblog inside the blog, providing links to articles on market-moving themes, summarizing indicator data, as well as providing heads upwards on the day's major economical reports. I notice over 500 traders similar a shot subscribe; here's the page for complimentary subscription. In award of the 500 milestone, banker's complaint that I posted ane of the historical trading patterns inward a Twitter "tweet" yesterday. I'll survive doing a piddling to a greater extent than of that going forward, every bit non every designing that I uncovering merits its ain form out weblog post. The end 5 "tweets" look on the weblog site nether "Twitter Trader".
* New Book Chapter - The two-volume reference assault Psychiatry only came out, amongst a chapter on brief therapy written past times yours genuinely amongst 2 colleagues from my med schoolhouse inward Syracuse. This follows my brief therapy chapter inward the recent Textbook of Psychiatry published past times the American Psychiatric Association. Much of the applied psychology that appears inward my trading books as well as inward this weblog is derived from inquiry as well as exercise inward brief therapy.
* Forex Expo - One of my rare populace appearances volition occur inward September, at the Forex Trading Expo inward Las Vegas. I was impressed past times the organizer's insistence that the presentations survive non-commercial as well as informative. My presentation volition render a window on some of the novel cloth covered inward the majority I'm currently writing.
* Coaching Questions - I'm getting an increasing issue of emails from traders asking coaching questions (i.e., requests for advice re: trading problems). Alas, I can't answer to all those emails, but I volition survive selecting a few related topics to address inward weblog posts inward the side past times side yoke of days inward hopes of helping every bit many traders every bit possible.
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Sunday, June 18, 2006
Info!! From Occupation Patterns To Solutions: Brief Therapy For Traders
An experienced trader writes to me:
"I am having a skillful yr trading but today marks the THIRD TIME this yr that I've made a critical error which goes against my whole philosophy of trading.
I am a tendency trader. That is how I brand really consistent gains regardless of what the marketplace is doing...I was buying a stock at levels where I believed it would bounce...of course of teaching the stock didn't bounce thence I added to a greater extent than at lower levels in addition to to a greater extent than fifty-fifty lower...
I got out of the merchandise on a rally, but it terms me the side past times side ii weeks of average profits...
I knew it was stupid when I was doing it, soundless I continued to chemical compound the problem. I didn't necessarily wishing to hold out correct in addition to brand coin on the trade, precisely minimize the losses (by buying to a greater extent than at lower levels)...
What I am non comfortable alongside is WHY I engaged inwards such risky behavior...what is the root, how do I observe it, eradicate it?...The other ii times were similar trades alongside similar results."
This is a really typical scenario that I assist traders with. In this post, I'll walk yous through how I thought such problems in addition to what I typically recommend.
The framework that I operate from, broadly speaking, is i that is known every bit brief therapy. These short-term approaches accelerate cognitive, emotional, in addition to behavioral modify past times emphasizing hands-on skills edifice in addition to the creation of powerful, novel experiences that modify how nosotros thought things.
Brief therapy is non appropriate for all people in addition to situations, especially those alongside chronic (longstanding) emotional problems that significantly interfere alongside areas of life functioning. Fortunately I know my author in addition to tin vouch for the fact that he does non endure from whatever meaning emotional disorders.
So what is the fundamental to his problem? What i characteristic stands out inwards his presentation? Take a instant in addition to expect over his words. What most strikes yous nearly the difficulty?
One such fundamental is that this has happened earlier inwards really similar ways. That tells us that it is probable a cyclical problem. Something initiates the designing (sets it off); something keeps it going (even though he knows it is "stupid"); in addition to something afterwards kicks inwards to acquire him out of the pattern.
Most cyclical patterns are at that spot for a reason: they serve a function. The trader's intense wishing to observe the occupation in addition to "eradicate" it is likely constituent of the occupation designing itself--much every bit the wishing to eradicate insomnia tin maintain a somebody awake all black or the wishing to eradicate fatty tin Pb a bulimic somebody to binge eat.
In short, fighting the designing is a mistake. The challenge is to sympathise the role of the designing in addition to and thence rehearse a unlike means of satisfying this function. Instead of viewing the occupation designing every bit maladaptive, the brief therapist views it every bit a form of occupation solving that no longer plant for the individual.
Let's accept a unproblematic example: Bill grew upwards alongside a woman nurture that was anxious in addition to overbearing. Conflicts at dwelling menage were really unpleasant, thence Bill learned to avoid conflict past times minimizing communication alongside his woman nurture whenever she sounded upset. This worked good throughout his childhood. Now Bill is married to Susan, who at times feels overwhelmed at piece of work in addition to reaches out to Bill. Much to Susan's dismay, Bill withdraws at those times in addition to fails to offering support. She feels every bit though he doesn't aid nearly what she's going through. Bill feels guilty nearly non existence at that spot for Susan in addition to tries to travel inwards upwards to her, exclusively to autumn curt the side past times side fourth dimension she is worried or frustrated.
One mightiness imagine Bill maxim the same affair every bit our trader: "This is the THIRD TIME I've allow my married adult woman down...I know it's stupid when I'm pulling away from her, but I maintain to chemical compound the problem." It's a cyclical occupation that represents a past, overlearned response to a stressful situation.
So how do nosotros assist Bill? We don't endeavor to "eradicate" the problem--that hasn't worked. Rather, nosotros acquire him to *talk* alongside Susan when he's feeling uncomfortable alongside her emotions. Step past times step, nosotros motorcoach him through such a conversation, opening upwards nearly his thoughts in addition to fears instead of pulling away. For example, nosotros learn him to tell to himself, "I'm non actually uncomfortable alongside Susan; this is my former fearfulness of my woman nurture cropping upwards again. How tin I tell Susan nearly that?"
As it turns out, precisely nearly anything Bill says to Susan inwards the province of affairs nearly his experience volition hold out helpful, because it volition disrupt the former designing in addition to demo her that he genuinely is listening, that he actually cares. That sets the phase for the ii of them to educate novel patterns. Instead of trying to eradicate in addition to bury his feelings, nosotros utilisation them every bit an chance for Bill to connect alongside Susan.
So dorsum to our trader. He has a cyclical designing inwards which he adds to losing trades, eventually taking outsized losers. This is frustrating to him (note the all-caps when he describes the THIRD TIME he's experienced the occupation this year), in addition to it is something he wants to acquire rid of. But what is the role of the pattern? Our trader perceptively notes it himself: "I didn't necessarily wishing to hold out correct in addition to brand coin on the trade, precisely minimize losses." So at that spot it is: our trader is trying to avoid loss past times averaging down. This is his means of fighting against failure, falling short.
In a subsequent communication, the trader revealed to me, "Each of these bigger losses occured after a menses of really skillful trading. I didn't experience cocky, but my actions were. I cannot growth my relative run a hazard tolerance after a menses of success." This is a really skillful observation. The occupation designing is NOT triggered past times a losing trade. It is triggered past times success! After a winning period, our trader becomes emotionally attached to winning: he wants to eradicate losses. This has him resisting taking normal losses at his halt points in addition to instead averaging downwardly to minimize the loss. It's non that he's trying for a dwelling menage run trade: he doesn't wishing to halt winning.
So there's the trap. Once the trader hits a winning streak, he wants to maintain winning. This makes fifty-fifty normal losses experience threatening. So what tin he do? Ironically, the answer is to purposely engage inwards guided imagery exercises earlier the trading twenty-four hours starts inwards which he mentally rehearses honoring his halt levels in addition to taking normal losses. These exercises would hold out doubled next winning trading days. Just every bit nosotros had Bill verbalize alongside Susan nearly his discomfort, nosotros encourage our trader to openly seem upwards his demand to maintain winning. Fighting the designing hasn't worked; past times facing the occupation caput on, he tin maintain a grade caput fifty-fifty when he's inwards his best winning streak.
I don't know our trader really well, but my approximate is that there's to a greater extent than to his drive in addition to wishing for success. Perhaps he's *needing* to win instead of passionately *wanting* to win. There's an of import difference. Once we're inwards the "need-to-win" mindset, losses boot the bucket threatening in addition to nosotros endeavor to avoid them past times doing "stupid" things. By rehearsing an "ok to lose" mindset, nosotros interrupt the demand designing in addition to gear upwards the phase for initiating novel patterns of trading well.
I bask trading in addition to I observe markets endlessly fascinating. But it's working alongside people in addition to helping them brand changes inwards their lives that actually makes my day. Once nosotros halt viewing patterns every bit "problems" to "eradicate" in addition to precisely discovery fresh ways to come across the needs underneath those patterns, nosotros eliminate many of our blocks to success in addition to happiness. And isn't that what coaching is all about?
RELATED POSTS:
Therapy for the Mentally Well
Using Brief Therapy to Become Your Own Coach
The First Steps of Brief Therapy
Brief Therapy With a Solution Focus
.
"I am having a skillful yr trading but today marks the THIRD TIME this yr that I've made a critical error which goes against my whole philosophy of trading.
I am a tendency trader. That is how I brand really consistent gains regardless of what the marketplace is doing...I was buying a stock at levels where I believed it would bounce...of course of teaching the stock didn't bounce thence I added to a greater extent than at lower levels in addition to to a greater extent than fifty-fifty lower...
I got out of the merchandise on a rally, but it terms me the side past times side ii weeks of average profits...
I knew it was stupid when I was doing it, soundless I continued to chemical compound the problem. I didn't necessarily wishing to hold out correct in addition to brand coin on the trade, precisely minimize the losses (by buying to a greater extent than at lower levels)...
What I am non comfortable alongside is WHY I engaged inwards such risky behavior...what is the root, how do I observe it, eradicate it?...The other ii times were similar trades alongside similar results."
This is a really typical scenario that I assist traders with. In this post, I'll walk yous through how I thought such problems in addition to what I typically recommend.
The framework that I operate from, broadly speaking, is i that is known every bit brief therapy. These short-term approaches accelerate cognitive, emotional, in addition to behavioral modify past times emphasizing hands-on skills edifice in addition to the creation of powerful, novel experiences that modify how nosotros thought things.
Brief therapy is non appropriate for all people in addition to situations, especially those alongside chronic (longstanding) emotional problems that significantly interfere alongside areas of life functioning. Fortunately I know my author in addition to tin vouch for the fact that he does non endure from whatever meaning emotional disorders.
So what is the fundamental to his problem? What i characteristic stands out inwards his presentation? Take a instant in addition to expect over his words. What most strikes yous nearly the difficulty?
One such fundamental is that this has happened earlier inwards really similar ways. That tells us that it is probable a cyclical problem. Something initiates the designing (sets it off); something keeps it going (even though he knows it is "stupid"); in addition to something afterwards kicks inwards to acquire him out of the pattern.
Most cyclical patterns are at that spot for a reason: they serve a function. The trader's intense wishing to observe the occupation in addition to "eradicate" it is likely constituent of the occupation designing itself--much every bit the wishing to eradicate insomnia tin maintain a somebody awake all black or the wishing to eradicate fatty tin Pb a bulimic somebody to binge eat.
In short, fighting the designing is a mistake. The challenge is to sympathise the role of the designing in addition to and thence rehearse a unlike means of satisfying this function. Instead of viewing the occupation designing every bit maladaptive, the brief therapist views it every bit a form of occupation solving that no longer plant for the individual.
Let's accept a unproblematic example: Bill grew upwards alongside a woman nurture that was anxious in addition to overbearing. Conflicts at dwelling menage were really unpleasant, thence Bill learned to avoid conflict past times minimizing communication alongside his woman nurture whenever she sounded upset. This worked good throughout his childhood. Now Bill is married to Susan, who at times feels overwhelmed at piece of work in addition to reaches out to Bill. Much to Susan's dismay, Bill withdraws at those times in addition to fails to offering support. She feels every bit though he doesn't aid nearly what she's going through. Bill feels guilty nearly non existence at that spot for Susan in addition to tries to travel inwards upwards to her, exclusively to autumn curt the side past times side fourth dimension she is worried or frustrated.
One mightiness imagine Bill maxim the same affair every bit our trader: "This is the THIRD TIME I've allow my married adult woman down...I know it's stupid when I'm pulling away from her, but I maintain to chemical compound the problem." It's a cyclical occupation that represents a past, overlearned response to a stressful situation.
So how do nosotros assist Bill? We don't endeavor to "eradicate" the problem--that hasn't worked. Rather, nosotros acquire him to *talk* alongside Susan when he's feeling uncomfortable alongside her emotions. Step past times step, nosotros motorcoach him through such a conversation, opening upwards nearly his thoughts in addition to fears instead of pulling away. For example, nosotros learn him to tell to himself, "I'm non actually uncomfortable alongside Susan; this is my former fearfulness of my woman nurture cropping upwards again. How tin I tell Susan nearly that?"
As it turns out, precisely nearly anything Bill says to Susan inwards the province of affairs nearly his experience volition hold out helpful, because it volition disrupt the former designing in addition to demo her that he genuinely is listening, that he actually cares. That sets the phase for the ii of them to educate novel patterns. Instead of trying to eradicate in addition to bury his feelings, nosotros utilisation them every bit an chance for Bill to connect alongside Susan.
So dorsum to our trader. He has a cyclical designing inwards which he adds to losing trades, eventually taking outsized losers. This is frustrating to him (note the all-caps when he describes the THIRD TIME he's experienced the occupation this year), in addition to it is something he wants to acquire rid of. But what is the role of the pattern? Our trader perceptively notes it himself: "I didn't necessarily wishing to hold out correct in addition to brand coin on the trade, precisely minimize losses." So at that spot it is: our trader is trying to avoid loss past times averaging down. This is his means of fighting against failure, falling short.
In a subsequent communication, the trader revealed to me, "Each of these bigger losses occured after a menses of really skillful trading. I didn't experience cocky, but my actions were. I cannot growth my relative run a hazard tolerance after a menses of success." This is a really skillful observation. The occupation designing is NOT triggered past times a losing trade. It is triggered past times success! After a winning period, our trader becomes emotionally attached to winning: he wants to eradicate losses. This has him resisting taking normal losses at his halt points in addition to instead averaging downwardly to minimize the loss. It's non that he's trying for a dwelling menage run trade: he doesn't wishing to halt winning.
So there's the trap. Once the trader hits a winning streak, he wants to maintain winning. This makes fifty-fifty normal losses experience threatening. So what tin he do? Ironically, the answer is to purposely engage inwards guided imagery exercises earlier the trading twenty-four hours starts inwards which he mentally rehearses honoring his halt levels in addition to taking normal losses. These exercises would hold out doubled next winning trading days. Just every bit nosotros had Bill verbalize alongside Susan nearly his discomfort, nosotros encourage our trader to openly seem upwards his demand to maintain winning. Fighting the designing hasn't worked; past times facing the occupation caput on, he tin maintain a grade caput fifty-fifty when he's inwards his best winning streak.
I don't know our trader really well, but my approximate is that there's to a greater extent than to his drive in addition to wishing for success. Perhaps he's *needing* to win instead of passionately *wanting* to win. There's an of import difference. Once we're inwards the "need-to-win" mindset, losses boot the bucket threatening in addition to nosotros endeavor to avoid them past times doing "stupid" things. By rehearsing an "ok to lose" mindset, nosotros interrupt the demand designing in addition to gear upwards the phase for initiating novel patterns of trading well.
I bask trading in addition to I observe markets endlessly fascinating. But it's working alongside people in addition to helping them brand changes inwards their lives that actually makes my day. Once nosotros halt viewing patterns every bit "problems" to "eradicate" in addition to precisely discovery fresh ways to come across the needs underneath those patterns, nosotros eliminate many of our blocks to success in addition to happiness. And isn't that what coaching is all about?
RELATED POSTS:
Therapy for the Mentally Well
Using Brief Therapy to Become Your Own Coach
The First Steps of Brief Therapy
Brief Therapy With a Solution Focus
.
Saturday, June 17, 2006
Friday, June 16, 2006
Info!! March's Intermarket Transitions
rising rates amongst approximately apprehension, given electrical flow economical weakness together with continued weakness inward the housing market.
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Info!! Res Ipsa Loquitur
Hat tip to the wonderful Decision Point site: superlative panel is low-cal crude; bottom panel is the U.S. dollar index. Both runway the menstruum from 1990 - present. From housing to the dollar, banking to commodities, national debt to soaring Medicare in addition to Social Security obligations: it's hard to encounter the menstruum since 2002 equally anything other than ane of profligacy in addition to verbalise financial mismanagement. I am non a behave past times nature, merely when yous reckon the average debt of the average household and the concentration of identify assets inwards housing, it's hard to encounter happy retirements for many babe boomers.
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Thursday, June 15, 2006
Info!! Cross-Talk: Thoughts On Fiscal Planning Inward A Challenging Economy
Reader Tim offers a perceptive reply to my recent post:
It's hard for me to residue what nosotros know close the major subject of regime financial irresponsibility alongside brusk to medium term trends. As you've mentioned, it's i affair to live a successful trader, producing income too roughly other to live financially successful too responsible over the long term. Influenza A virus subtype H5N1 trader should live able to compass income merely what of retirement too all those babe boomers that are going to force their stock investments at the same fourth dimension too foremost looking for income streams? With inflation including world monetization of bad banking concern loans (private debt) where tin you lot operate to larn a hedge too protect assets for the future?
That's actually the challenge of the investor, every bit opposed to the short-term trader: to, every bit best every bit possible, seat scenarios for the future, seat oneself to turn a profit from those (or at to the lowest degree to non lose money), too to live sufficiently hedged inwards the trial i is wrong. Many times this volition hateful acting on scenarios that differ from what you lot run across inwards the short-to-medium term, which--as Tim notes--can live hard to balance.
A pitiable somebody is i who worries close how to pay the bills. Influenza A virus subtype H5N1 optic income somebody is i who worries close funding retirement. Influenza A virus subtype H5N1 wealthy somebody is i who worries close leaving plenty for the side past times side generation. More assets compass non necessarily convey fewer worries, exclusively dissimilar ones. When you lot don't select money, you lot are worried close making it; when you lot select excess capital, you're concerned close keeping it.
"Hope for the best, innovation for the worst" is advice that has served me good every bit a short-term trader. By placing your stop-out level, you lot innovation for the worst number too ensure you lot tin live on it. Similarly, through diversification too hedges you lot tin innovation for the worst every bit an investor too residue your diverse opportunity exposures.
In the final twelvemonth I've traveled inwards the the United States of America from Miami, FL to Bellevue, WA too quite a few places inwards between. The mutual chemical factor has been cranes on the skyline. Building continues apace, fifty-fifty amidst indications of a housing oversupply. New luxury developments trouble the major Naperville street that passes our neighborhood; the houses are non moving, merely to a greater extent than are beingness built.
In i expanse I visited recently, an entire condominium complex is going under. The developer could non sell plenty units too so could non heighten sufficient association fees to properly maintain the development. This led to higher fees for existing tenants too cutbacks inwards services, including lighting inwards hallways. Caught inwards a boot the bucket spiral, electrical flow residents notice they cannot sell their properties for fifty-fifty bargain-basement prices: no i wants the liability of paying fees for a deteriorating facility.
Suppose the housing crises winds upward much deeper too broader than expected. How would this deport upon the economy? How would this deport upon the income of municipalities too their mightiness to pay off debts? How would this impact banks belongings mortgage debt--and how would that deport upon monetary policy at a Fed fearful of disintermediation?
It's non hard to imagine a perfect tempest for babe boomer retirees, inwards which involvement rates kept depression past times an accommodative Fed limit savings income, fifty-fifty every bit residential too stock marketplace holdings are falling inwards value too work opportunities (along alongside the economy) are contracting.
For those concerned close retirement too estate planning, the number is non then much the specific odds that this scenario volition unfold, merely rather how i would rest inwards the game *if* it unfolds. For those distant from their financial goals, the temptation is to larn aggressive too boundary inwards to purchase housing bargains, battered financial stocks, too juicy high-yield debt. I remember, too, when plenty of investors jumped inwards to purchase bruised applied scientific discipline shares subsequently their big drib early on inwards 2000. They seemed similar bargains when they were 25% off their highs...but injure upward to a greater extent than similar 75% off their highs over the side past times side 2 years.
I believe Tim is bespeak the correct enquiry close finding hedges. The tricky role hither is identifying whether the ultimate threat is inflation (and soaring involvement rates too commodity prices) or deflation (and collapsing rates too financial property values). For me personally, it's the prospect of a housing collapse, attendant banking concern crises, too an irresistible force toward quantitative easing at a Fed dominated past times appointees from the side past times side direction that leads me to attempt protection from a possible perfect storm. As a result, locking inwards high character yields too hedging against stock marketplace too dollar weakness has been a dominant role of my increasingly fluid financial planning.
.
It's hard for me to residue what nosotros know close the major subject of regime financial irresponsibility alongside brusk to medium term trends. As you've mentioned, it's i affair to live a successful trader, producing income too roughly other to live financially successful too responsible over the long term. Influenza A virus subtype H5N1 trader should live able to compass income merely what of retirement too all those babe boomers that are going to force their stock investments at the same fourth dimension too foremost looking for income streams? With inflation including world monetization of bad banking concern loans (private debt) where tin you lot operate to larn a hedge too protect assets for the future?
That's actually the challenge of the investor, every bit opposed to the short-term trader: to, every bit best every bit possible, seat scenarios for the future, seat oneself to turn a profit from those (or at to the lowest degree to non lose money), too to live sufficiently hedged inwards the trial i is wrong. Many times this volition hateful acting on scenarios that differ from what you lot run across inwards the short-to-medium term, which--as Tim notes--can live hard to balance.
A pitiable somebody is i who worries close how to pay the bills. Influenza A virus subtype H5N1 optic income somebody is i who worries close funding retirement. Influenza A virus subtype H5N1 wealthy somebody is i who worries close leaving plenty for the side past times side generation. More assets compass non necessarily convey fewer worries, exclusively dissimilar ones. When you lot don't select money, you lot are worried close making it; when you lot select excess capital, you're concerned close keeping it.
"Hope for the best, innovation for the worst" is advice that has served me good every bit a short-term trader. By placing your stop-out level, you lot innovation for the worst number too ensure you lot tin live on it. Similarly, through diversification too hedges you lot tin innovation for the worst every bit an investor too residue your diverse opportunity exposures.
In the final twelvemonth I've traveled inwards the the United States of America from Miami, FL to Bellevue, WA too quite a few places inwards between. The mutual chemical factor has been cranes on the skyline. Building continues apace, fifty-fifty amidst indications of a housing oversupply. New luxury developments trouble the major Naperville street that passes our neighborhood; the houses are non moving, merely to a greater extent than are beingness built.
In i expanse I visited recently, an entire condominium complex is going under. The developer could non sell plenty units too so could non heighten sufficient association fees to properly maintain the development. This led to higher fees for existing tenants too cutbacks inwards services, including lighting inwards hallways. Caught inwards a boot the bucket spiral, electrical flow residents notice they cannot sell their properties for fifty-fifty bargain-basement prices: no i wants the liability of paying fees for a deteriorating facility.
Suppose the housing crises winds upward much deeper too broader than expected. How would this deport upon the economy? How would this deport upon the income of municipalities too their mightiness to pay off debts? How would this impact banks belongings mortgage debt--and how would that deport upon monetary policy at a Fed fearful of disintermediation?
It's non hard to imagine a perfect tempest for babe boomer retirees, inwards which involvement rates kept depression past times an accommodative Fed limit savings income, fifty-fifty every bit residential too stock marketplace holdings are falling inwards value too work opportunities (along alongside the economy) are contracting.
For those concerned close retirement too estate planning, the number is non then much the specific odds that this scenario volition unfold, merely rather how i would rest inwards the game *if* it unfolds. For those distant from their financial goals, the temptation is to larn aggressive too boundary inwards to purchase housing bargains, battered financial stocks, too juicy high-yield debt. I remember, too, when plenty of investors jumped inwards to purchase bruised applied scientific discipline shares subsequently their big drib early on inwards 2000. They seemed similar bargains when they were 25% off their highs...but injure upward to a greater extent than similar 75% off their highs over the side past times side 2 years.
I believe Tim is bespeak the correct enquiry close finding hedges. The tricky role hither is identifying whether the ultimate threat is inflation (and soaring involvement rates too commodity prices) or deflation (and collapsing rates too financial property values). For me personally, it's the prospect of a housing collapse, attendant banking concern crises, too an irresistible force toward quantitative easing at a Fed dominated past times appointees from the side past times side direction that leads me to attempt protection from a possible perfect storm. As a result, locking inwards high character yields too hedging against stock marketplace too dollar weakness has been a dominant role of my increasingly fluid financial planning.
.
Wednesday, June 14, 2006
Info!! Coin Flows Too A Catamenia Of Marketplace Ideas
This post service summarizes a few of the unique features of the coaching mass I'm currently writing. What makes this interesting is that the structure, besides every bit content, of the text volition move quite dissimilar from my other material.
* Gaps - Some worthwhile cloth on trading gaps from Quantifiable Edges.
* Nod of the Cap - Kudos to Charles Kirk on the functioning of his recent stock picks. If that's non a weblog that offers value, I don't know what is.
* Excellent Weekend Reading - Asian inflation, foreclosures, together with trading perspectives from Linda Raschke are with a await at the dynamics of the credit crisis. Paul Kedrosky looks at the views of T. Boone Pickens together with the prospects for an oil toll collapse. David Merkel offers his accept on the oil markets together with why he likes VLO.
* Still Showing Strength - Among the twoscore stocks inward my handbasket that are evenly drawn from viii S&P 500 sectors, several are showing positive technical forcefulness despite the recent marketplace downturn. These include: DIS, MCD, WMT, WAG, COP, AMGN, together with CSCO.
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* Gaps - Some worthwhile cloth on trading gaps from Quantifiable Edges.
* Nod of the Cap - Kudos to Charles Kirk on the functioning of his recent stock picks. If that's non a weblog that offers value, I don't know what is.
* Excellent Weekend Reading - Asian inflation, foreclosures, together with trading perspectives from Linda Raschke are with a await at the dynamics of the credit crisis. Paul Kedrosky looks at the views of T. Boone Pickens together with the prospects for an oil toll collapse. David Merkel offers his accept on the oil markets together with why he likes VLO.
* Still Showing Strength - Among the twoscore stocks inward my handbasket that are evenly drawn from viii S&P 500 sectors, several are showing positive technical forcefulness despite the recent marketplace downturn. These include: DIS, MCD, WMT, WAG, COP, AMGN, together with CSCO.
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Tuesday, June 13, 2006
Info!! Indicator Review For June 16Th
Last week's indicator review flora picayune to hold upwards excited almost for the bulls, amongst a weakening motion painting across the board. This has led to a period of time of funds out of stocks over the past times calendar week together with farther indicator weakness.
Across the NYSE, NASDAQ, together with ASE, novel 65-day lows continued to expand this past times calendar week (top chart), far outnumbering novel highs. For 3 consecutive days, nosotros registered over 2000 20-day lows, a province of affairs that, since 2004, has tended to Pb to a marketplace bounce over the next week. Among merely the mutual stocks listed on the NYSE, nosotros striking 150 novel 52-week lows at terminal week's nadir, which is pregnant weakening over the prior week, but non nearly every bit weak every bit the readings inwards Jan together with March. This designing of expanding novel 52-week lows was evident amidst the S&P 600 pocket-size caps too and, to a lesser degree, amidst the S&P 400 midcaps (which convey been the strongest grouping of the 3 during the post-March rally).
With the selling, every bit noted inwards a recent Twitter comment, we've neared oversold levels (bottom chart) inwards the cumulative Demand/Supply index which convey lately marked intermediate-term marketplace lows, together with we've striking levels from which the marketplace has typically shown positive returns over the adjacent month. Still, we'll involve to run across to a greater extent than sustained forcefulness inwards the novel high/low numbers together with the coin flows to become excited almost the upside.
The marketplace weakness has extended to most stock sectors. After dipping a flake below 30% during the week, the percent of S&P 500 issues trading to a higher house their 50-day moving averages shut at 47% on Friday. That's downwards from 80% at the marketplace high. The Fri percentages for pocket-size caps together with midcaps respectively are 51% together with 55%. Once again, nosotros run across considerable variation amidst the sectors: every bit of Friday, solely 28% of S&P 500 fiscal issues are trading to a higher house their 50-day averages together with 37% of consumer discretionary stocks, but 83% of loose energy stocks together with 59% of technology scientific discipline shares are to a higher house their benchmarks.
Later this week, I'll devote a course of written report postal service to the Cumulative NYSE TICK, which has been making consistent novel lows through the week, validating what we're seeing inwards coin flows. Until nosotros run across greater testify of need for stocks, it volition hold upwards hard to sustain a bull move. That having been said, I'm non all the same seeing the sort of selling that typified the markets inwards the starting fourth dimension quarter of this year. As long every bit that's the case, nosotros seem to hold upwards trading inwards a wide gain defined past times the March lows together with the recent marketplace highs.
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Across the NYSE, NASDAQ, together with ASE, novel 65-day lows continued to expand this past times calendar week (top chart), far outnumbering novel highs. For 3 consecutive days, nosotros registered over 2000 20-day lows, a province of affairs that, since 2004, has tended to Pb to a marketplace bounce over the next week. Among merely the mutual stocks listed on the NYSE, nosotros striking 150 novel 52-week lows at terminal week's nadir, which is pregnant weakening over the prior week, but non nearly every bit weak every bit the readings inwards Jan together with March. This designing of expanding novel 52-week lows was evident amidst the S&P 600 pocket-size caps too and, to a lesser degree, amidst the S&P 400 midcaps (which convey been the strongest grouping of the 3 during the post-March rally).
With the selling, every bit noted inwards a recent Twitter comment, we've neared oversold levels (bottom chart) inwards the cumulative Demand/Supply index which convey lately marked intermediate-term marketplace lows, together with we've striking levels from which the marketplace has typically shown positive returns over the adjacent month. Still, we'll involve to run across to a greater extent than sustained forcefulness inwards the novel high/low numbers together with the coin flows to become excited almost the upside.
The marketplace weakness has extended to most stock sectors. After dipping a flake below 30% during the week, the percent of S&P 500 issues trading to a higher house their 50-day moving averages shut at 47% on Friday. That's downwards from 80% at the marketplace high. The Fri percentages for pocket-size caps together with midcaps respectively are 51% together with 55%. Once again, nosotros run across considerable variation amidst the sectors: every bit of Friday, solely 28% of S&P 500 fiscal issues are trading to a higher house their 50-day averages together with 37% of consumer discretionary stocks, but 83% of loose energy stocks together with 59% of technology scientific discipline shares are to a higher house their benchmarks.
Later this week, I'll devote a course of written report postal service to the Cumulative NYSE TICK, which has been making consistent novel lows through the week, validating what we're seeing inwards coin flows. Until nosotros run across greater testify of need for stocks, it volition hold upwards hard to sustain a bull move. That having been said, I'm non all the same seeing the sort of selling that typified the markets inwards the starting fourth dimension quarter of this year. As long every bit that's the case, nosotros seem to hold upwards trading inwards a wide gain defined past times the March lows together with the recent marketplace highs.
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Monday, June 12, 2006
Info!! Potpourri Of Interesting Things
* Some Trends Aren't Friends - Going dorsum to January, 1996 (N = 643 trading weeks), I compared returns when stocks (S&P 500 Index; SPY) were upward on a 1 as well as 4 calendar week reason as well as when they were downwards over the terminal calendar week as well as 4 weeks. When stocks had been potent over those ii periods, the side yesteryear side 4 weeks inwards SPY averaged a gain of solely .05% (140 up, 119 down). When they were downwards over both those periods, the side yesteryear side 4 weeks inwards SPY averaged a gain of 1.01% (109 up, 68 down).
* Frontier ETF - ETF Trends notes a real interesting product from Claymore that tracks frontier markets: the markets that volition locomote tomorrow's emerging markets.
* Solid Performer - Quite a piece agone I mentioned PHO, the H2O resources ETF. Since March, it's been a stellar performer, equally Nice way of defining opportunity: when historical expectations top historical average adverse excursions.
* Does Fri Affect Monday? - Quantifiable Edges examines whether Fri returns influence those on Mondays.
* Beyond the Defaults - VIX as well as More examines what happens when you lot tweak the default settings inwards your charting software.
* PRC as well as Oil - Trader's Narrative makes the case for falling stone oil inwards the confront of plunging China.
* Stock Screens - Chris Perruna has been posting roughly interesting ones.
* Cat Music - Republic of Mali only ran into my den when she heard Tarja as well as Sabine. That's 1 cool cat.
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* Frontier ETF - ETF Trends notes a real interesting product from Claymore that tracks frontier markets: the markets that volition locomote tomorrow's emerging markets.
* Solid Performer - Quite a piece agone I mentioned PHO, the H2O resources ETF. Since March, it's been a stellar performer, equally Nice way of defining opportunity: when historical expectations top historical average adverse excursions.
* Does Fri Affect Monday? - Quantifiable Edges examines whether Fri returns influence those on Mondays.
* Beyond the Defaults - VIX as well as More examines what happens when you lot tweak the default settings inwards your charting software.
* PRC as well as Oil - Trader's Narrative makes the case for falling stone oil inwards the confront of plunging China.
* Stock Screens - Chris Perruna has been posting roughly interesting ones.
* Cat Music - Republic of Mali only ran into my den when she heard Tarja as well as Sabine. That's 1 cool cat.
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Sunday, June 11, 2006
Info!! Trading, Intuition, Brain, As Well As Body
An first-class slide exhibit presentation from Jason Zweig, entitled Somatic Markers as well as Trading Decisions
Emotional Intelligence as well as Trading- Part One
Emotional Intelligence as well as Trading - Part Two
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Emotional Intelligence as well as Trading- Part One
Emotional Intelligence as well as Trading - Part Two
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Info!! Cutting Dorsum On E-Mail
Dear Readers,
As I mentioned inward a recent Twitter posting, I've been receiving an unusually large amount of electronic mail of late. With the demands of going on the route to operate alongside traders (you tin run across from the fourth dimension stamps of my recent posts when I've had gratis fourth dimension for the weblog as well as Twitter), it's been rattling hard to proceed upward alongside the mail.
To set this inward perspective, if nosotros exactly assume that 1% of readers electronic mail me each twenty-four hours as well as that each mailing requires exactly a few minutes for reading as well as response, I'd live on spending the improve constituent of 2 hours a twenty-four hours answering mail. That justice is non far from the mark, especially if I include postal service from other sources, including traders I operate alongside (who involve lengthier responses) as well as idiots alongside their breathless offers of advertising, gratis services, additional site traffic, link exchanges, as well as the like.
So, to larn the novel mass written as well as pick out a modicum of sanity to life (not to yell discovery fourth dimension to truly merchandise these markets!), I'll live on cutting agency dorsum on emailing. Please don't live on offended if I'm express inward my might to respond to requests for coaching advice, introductions to trading firms, indicators/trading systems, as well as similar topics that are to a greater extent than than requests for data or clarification. It's non out of lack of involvement or concern; it is only a constituent of my limitations, given the operate I do, my identify unit of measurement obligations, the blog, as well as the mass I'm writing.
As a rule, if the electronic mail runs for to a greater extent than than a paragraph, it's in all probability requiring a grade of response that won't live on possible for me. On the other hand, I'm solely also happy to respond questions virtually posts, part links/ideas, as well as indicate readers inward useful directions to larn help.
Thanks every bit ever for your understanding!
Brett
RELEVANT POST:
FAQ
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As I mentioned inward a recent Twitter posting, I've been receiving an unusually large amount of electronic mail of late. With the demands of going on the route to operate alongside traders (you tin run across from the fourth dimension stamps of my recent posts when I've had gratis fourth dimension for the weblog as well as Twitter), it's been rattling hard to proceed upward alongside the mail.
To set this inward perspective, if nosotros exactly assume that 1% of readers electronic mail me each twenty-four hours as well as that each mailing requires exactly a few minutes for reading as well as response, I'd live on spending the improve constituent of 2 hours a twenty-four hours answering mail. That justice is non far from the mark, especially if I include postal service from other sources, including traders I operate alongside (who involve lengthier responses) as well as idiots alongside their breathless offers of advertising, gratis services, additional site traffic, link exchanges, as well as the like.
So, to larn the novel mass written as well as pick out a modicum of sanity to life (not to yell discovery fourth dimension to truly merchandise these markets!), I'll live on cutting agency dorsum on emailing. Please don't live on offended if I'm express inward my might to respond to requests for coaching advice, introductions to trading firms, indicators/trading systems, as well as similar topics that are to a greater extent than than requests for data or clarification. It's non out of lack of involvement or concern; it is only a constituent of my limitations, given the operate I do, my identify unit of measurement obligations, the blog, as well as the mass I'm writing.
As a rule, if the electronic mail runs for to a greater extent than than a paragraph, it's in all probability requiring a grade of response that won't live on possible for me. On the other hand, I'm solely also happy to respond questions virtually posts, part links/ideas, as well as indicate readers inward useful directions to larn help.
Thanks every bit ever for your understanding!
Brett
RELEVANT POST:
FAQ
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Saturday, June 10, 2006
Friday, June 9, 2006
Info!! Insights Ahead Of A Quadruple Witching Friday
* Minor Milestone - lately recorded its 1,500,000th visit; cheers i time again for the involvement as well as support.
* Great Resource Collection - Check out for getting banned from message boards. Such is the welcome given to a fiscal blogger as well as journalist who digs beneath the surface as well as offers unique perspectives on stocks as well as companies. Great site.
* Measuring Trend - The Trade past times Trend weblog looks at how to mensurate a trend. Personally, I similar regression lines as well as goodness of gibe measures. That gives yous gradient as well as directional consistency. I similar how the Trade past times Trend site puts their merchandise ideas out at that spot for readers.
* Good Reads - excellent links inwards The Kirk Report, including a listing of overvalued stocks, lowest NASDAQ P/E stocks, as well as tiptop opportunities inwards large caps.
* Options Views - Daily Options Report finds a "pathetic" degree of fearfulness inwards the market, fifty-fifty equally nosotros exam March lows inwards a reveal of indexes. See equally good the options book as well as volatility inwards the regional banks, which convey been hammered lately.
* Viewing as well as Reviewing - StockTickr notes the benefits of finding notes the dilution faced past times shareholders of depository fiscal establishment asset companies.
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* Great Resource Collection - Check out for getting banned from message boards. Such is the welcome given to a fiscal blogger as well as journalist who digs beneath the surface as well as offers unique perspectives on stocks as well as companies. Great site.
* Measuring Trend - The Trade past times Trend weblog looks at how to mensurate a trend. Personally, I similar regression lines as well as goodness of gibe measures. That gives yous gradient as well as directional consistency. I similar how the Trade past times Trend site puts their merchandise ideas out at that spot for readers.
* Good Reads - excellent links inwards The Kirk Report, including a listing of overvalued stocks, lowest NASDAQ P/E stocks, as well as tiptop opportunities inwards large caps.
* Options Views - Daily Options Report finds a "pathetic" degree of fearfulness inwards the market, fifty-fifty equally nosotros exam March lows inwards a reveal of indexes. See equally good the options book as well as volatility inwards the regional banks, which convey been hammered lately.
* Viewing as well as Reviewing - StockTickr notes the benefits of finding notes the dilution faced past times shareholders of depository fiscal establishment asset companies.
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Thursday, June 8, 2006
Info!! A Worldwide Deport Market
While a dandy bargain of attending has focused on U.S.A. stock marketplace weakness (SPY), we're seeing only equally much weakness with European equities, including the United Kingdom of Great Britain too Northern Ireland (EWU) too FRG (EWG). China (FXI) is leading the downside with Hong Kong, equally inflation forces meaning monetary tightening too a soft landing doesn't look inward the cards. Commonwealth of Australia (EWA), a resources producer, has been relatively stronger, but the surprise inward the bunch is Nippon (EWJ), which has held upward surprisingly good through the spike inward liberate energy too agricultural commodities too the weakness across Asia.
Clearly the film is ane of a worldwide acquit market.
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Wednesday, June 7, 2006
Info!! Cross-Talk: A Dissimilar Film Of Global Equity Returns
my end post, I illustrated the global comport marketplace across the U.S., Asia, together with Europe via country-specific ETFs. Influenza A virus subtype H5N1 expose of readers pointed out that or together with thence countries are upward on the year, together with that is correct.
In the graph above, I plotted year-to-date returns for the USA (SPY); Commonwealth of Australia (EWA); Canada (EWC); Russian Federation (RSX); South Africa (EZA); together with Brazil (EWZ). I included these countries amongst the USA to illustrate the to a greater extent than favorable functioning amongst resource-rich economies. The exception is South Africa which has seen a weak currency, ability shortages, together with social unrest over the by year.
As stone oil producers, Canada, Russia, together with Brazil convey performed positively, fifty-fifty equally large stone oil consumers, such equally China, convey been relatively weak. Since mid-May, however, with or together with thence toppiness inwards stone oil prices together with intimations of greater render from the Saudis, fifty-fifty the stock markets of the stone oil producers convey undergone a correction.
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In the graph above, I plotted year-to-date returns for the USA (SPY); Commonwealth of Australia (EWA); Canada (EWC); Russian Federation (RSX); South Africa (EZA); together with Brazil (EWZ). I included these countries amongst the USA to illustrate the to a greater extent than favorable functioning amongst resource-rich economies. The exception is South Africa which has seen a weak currency, ability shortages, together with social unrest over the by year.
As stone oil producers, Canada, Russia, together with Brazil convey performed positively, fifty-fifty equally large stone oil consumers, such equally China, convey been relatively weak. Since mid-May, however, with or together with thence toppiness inwards stone oil prices together with intimations of greater render from the Saudis, fifty-fifty the stock markets of the stone oil producers convey undergone a correction.
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Tuesday, June 6, 2006
Info!! Yr To Engagement Returns Yesteryear Sector
How you've been faring this twelvemonth together with so far inward the stock marketplace set is really much a component of the sectors you've been invested in. While the S&P 500 Index (SPY) has been downwards close 10% thence far inward 2008, the commodities-related materials (XLB) together with liberate energy (XLE) sectors are upward on the year. Financial stocks (XLF), on the other hand, convey to a greater extent than than doubled the losses inward the overall index together with wellness tending (XLV), facing calls for reform from both parties inward a presidential election year, is besides trailing the pack. Meanwhile, consumer staples shares (XLP) convey shown a to a greater extent than pocket-sized reject than to a greater extent than growth-oriented sectors, reflecting investors' overall defensive opinion inward a slowing economy.
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Monday, June 5, 2006
Info!! Indicator Review For June 23Rd
the well-nigh recent indicator review, nosotros looked at a publish of signs of weakness, including an expanding publish of stocks making fresh 65-day lows as well as weak coin flows. This by calendar week saw to a greater extent than of the same, equally novel lows ane time once again expanded (top chart) as well as selling thought (NYSE cumulative TICK; bottom chart) continued its bearish trend. We're forthwith testing March lows inward the Dow Jones Industrial Average as well as nearing those lows inward the S&P 500 Index. Interestingly, the S&P 600 little caps as well as S&P 400 midcaps are good off their March lows, equally is the NASDAQ 100 index.
These divergences assistance to explicate why we're non seeing equally many stocks making fresh 52-week lows equally nosotros did inward Jan or March. On Friday, for example, nosotros had 27 NYSE mutual stocks register fresh 52-week highs, against 161 novel lows. By comparison, nosotros had over 300 novel lows inward March as well as over 700 inward January. Homebuilders, financials, auto manufacturers, airlines: in that location are a publish of really weak sectors making annual lows. When nosotros await at such sectors equally technology, consumer staples, consumer discretionaries, materials, as well as energy, however, nosotros come across no novel lows.
To endure sure, the marketplace position is weak. The advance-decline lines specific to NYSE mutual stocks as well as S&P 500 stocks are correct at their March lows. We're seeing fresh send lows inward the A-D draw of piece of employment specific to the Dow xxx Industrials. But the S&P 400 midcaps as well as S&P 600 little caps? The lines specific to those stay modestly to a higher house their 2008 lows. So spell the marketplace position is weak, it is non clear to me that it is weakening relative to the laid out quarter of the year. As long equally selling thought (cumulative NYSE TICK) remains negative, riding the tendency continues to endure the best kind out of action. I'm non aggressively chasing the downside here, however, as well as may indeed nibble at the long side should thought improve.
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These divergences assistance to explicate why we're non seeing equally many stocks making fresh 52-week lows equally nosotros did inward Jan or March. On Friday, for example, nosotros had 27 NYSE mutual stocks register fresh 52-week highs, against 161 novel lows. By comparison, nosotros had over 300 novel lows inward March as well as over 700 inward January. Homebuilders, financials, auto manufacturers, airlines: in that location are a publish of really weak sectors making annual lows. When nosotros await at such sectors equally technology, consumer staples, consumer discretionaries, materials, as well as energy, however, nosotros come across no novel lows.
To endure sure, the marketplace position is weak. The advance-decline lines specific to NYSE mutual stocks as well as S&P 500 stocks are correct at their March lows. We're seeing fresh send lows inward the A-D draw of piece of employment specific to the Dow xxx Industrials. But the S&P 400 midcaps as well as S&P 600 little caps? The lines specific to those stay modestly to a higher house their 2008 lows. So spell the marketplace position is weak, it is non clear to me that it is weakening relative to the laid out quarter of the year. As long equally selling thought (cumulative NYSE TICK) remains negative, riding the tendency continues to endure the best kind out of action. I'm non aggressively chasing the downside here, however, as well as may indeed nibble at the long side should thought improve.
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Sunday, June 4, 2006
Info!! Banks Together With Housing
While the large cap indexes are testing their March lows, the banking (middle chart) in addition to housing (bottom chart) sectors accept blown through those levels to brand acquit marketplace lows. It's hard to imagine the Fed aggressively raising rates amongst these sectors on their heels; that number mightiness but competitor the fate of the domestic dog who decided to chase something other than his tail (top).
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Saturday, June 3, 2006
Friday, June 2, 2006
Info!! Marketplace Views Ahead Of The Fed
* Weakness Across Sectors - Looking at the twoscore stocks inwards my basket, chosen evenly from viii S&P 500 sectors, my technical forcefulness mensurate (a quantitative mensurate of trending) finds iv inwards uptrends, iii neutral, together with 33 inwards downtrends. In a unlike present of weakness, nosotros had over 3000 stocks across the NYSE, NASDAQ, together with ASE making novel 20-day lows on Tuesday. This has solely occurred 12 times since September, 2002; 1 calendar week later, the S&P 500 Index was upward seven times, downwards 5, for an average arrive at of 1.02%, much higher than the .16% average five-day arrive at for the residue of the sample.
* Seeking Quiet - I was interested to encounter Charles Kirk's posting on noise-canceling headphones. I role a Bose diversity during about of my guided imagery sessions to melody out distractions together with help cancel about of the internal noise. Reducing physical activity together with tension spell eliminating exterior stimulation is business office of the meditative discipline, together with I detect it useful for getting dorsum to calm, focused states during the marketplace day.
* Useful Wisdom - The value of admitting errors, the perils of taking big chances, together with other nuggets of wisdom are business office of the ETFs that Jeff Miller is rating.
* Bounce? - Quantifiable Edges examines a breadth indicator together with what it suggests.
* Technically Speaking - Barry Ritholtz offers some perspective on technical analysis.
* VIX Views - Daily Options Report on the unlike implications of high together with depression VIX.
* Sentiment Indicator - VIX together with More tracks the put/call ratio for SPY options.
* Commodity Patterns - CXO reviews a report of how commodity markets answer to surprise intelligence events.
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* Seeking Quiet - I was interested to encounter Charles Kirk's posting on noise-canceling headphones. I role a Bose diversity during about of my guided imagery sessions to melody out distractions together with help cancel about of the internal noise. Reducing physical activity together with tension spell eliminating exterior stimulation is business office of the meditative discipline, together with I detect it useful for getting dorsum to calm, focused states during the marketplace day.
* Useful Wisdom - The value of admitting errors, the perils of taking big chances, together with other nuggets of wisdom are business office of the ETFs that Jeff Miller is rating.
* Bounce? - Quantifiable Edges examines a breadth indicator together with what it suggests.
* Technically Speaking - Barry Ritholtz offers some perspective on technical analysis.
* VIX Views - Daily Options Report on the unlike implications of high together with depression VIX.
* Sentiment Indicator - VIX together with More tracks the put/call ratio for SPY options.
* Commodity Patterns - CXO reviews a report of how commodity markets answer to surprise intelligence events.
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Thursday, June 1, 2006
Info!! The Daily Trading Coach
My novel mass has a tentative cover, in addition to the writing is straightaway by the halfway mark. I'll locomote updating readers close the novel fabric covered inwards the text through a dedicated website. That site volition convey quite a fleck of fabric to supplement the book. Thanks for your continued interest!
Brett
Brett
Info!! The Fright Of Missing Is The Fright Of Dissing
A reader lately asked me close a work he was having amongst "the fearfulness of missing". It appears that he front-runs his setups, getting into trades earlier he gets proper signals. This fearfulness of missing chance has wound his performance, equally it has placed his uppercase at endangerment during periods of depression opportunity.
At the really least, the fearfulness of missing signals tin lawsuit inward pitiable execution. Instead of buying on pullbacks or selling on bounces, yous chase the marketplace higher or lower. The several ticks of retracement typically incurred add together upwards to quite an chance toll over time.
I'll endure addressing the fearfulness of missing trading opportunities inward item Stilling Negative Thoughts
Breaking Patterns of Frustration inward Trading
Trading With Emotional Intelligence
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At the really least, the fearfulness of missing signals tin lawsuit inward pitiable execution. Instead of buying on pullbacks or selling on bounces, yous chase the marketplace higher or lower. The several ticks of retracement typically incurred add together upwards to quite an chance toll over time.
I'll endure addressing the fearfulness of missing trading opportunities inward item Stilling Negative Thoughts
Breaking Patterns of Frustration inward Trading
Trading With Emotional Intelligence
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