May 2004 Archives

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today digging through their "Trader's Edge" and "Technical Analysis" articles.

I've been playing around with Kinja and thought I'd take a crack at building a digest of stock market posts. I've added a bunch of sites that are scattered across my blogroll and my newsreader. Unfortunately a couple of the sites I read don't have RSS/Atom feeds or are just indecipherable by Kinja.

I still haven't found the perfect way to track all the blogs I read. Some don't have the aforementioned feeds, so my newsreader can't pick them up. Still others don't ping weblogs.com (or some other notification site), so they don't show as updated on my blogroll. Hopefully Kinja will work well though. I also like that I can easily get to the Kinja digest via my Treo 600.

Note: I just added another new blog, SPY and QQQ Trading, to my list of stock market blogs.

Most of you have heard the saying "Sell in May and Go Away". That certainly would have been good advice so far this year. The S&P and Dow are down 1% and 2.6% respectively for the month. The NASDAQ is actually up 0.15% for the month, so maybe just the 'go away' part of that saying should apply to the NASDAQ (so far). The NASDAQ chart shows why this market has been so tough the last few weeks.

Over the last 17 trading days the NASDAQ has basically gone nowhere. 13 of those days had opening gaps and then no follow through. 11 of those 17 days have had candles with small real bodies, which are signs of confusion and/or a stalemate between bulls & bears. Note all of the doji, stars, hammers, and spinning tops that printed during May.

The NASDAQ also has some formidable resistance just above. The 200 day moving average sits 1,950 and the 50 DMA is currently at 1970. This certainly seems like a good time to go away if you don't have to be in the market.

Re: My 'this market sucks' comment from yesterday morning... Briefing.com just posted the following about the current market conditions:

12:28 Floor Talk

After the mkt sold off below its early trading range, we asked around some trading desks to see if there were any specific catalysts. Some of the traders cited the weaker than expected Philly Fed number, others cited bearish technical factors, but the best answer came from one trader who simply stated: "the market stinks." Institutional desks also note that trading should exhibit some big swings intraday due to options expiration tomorrow, which will likely be exacerbated by the quick money that is always looking to jump on the bandwagon in either direction. One trader goes so far as to suggest that you need dramamine to ride this tape.

Back to my DVD watching...

There's been a lot of good economics & business related blogging of late. This week's Carnival of the Capitalists highlights many good recent articles. Below are some of the ones that caught my eye, plus a few other posts I read over the weekend:

• Michael at the Calico Cat discusses the 'free market of blogs'. He shows how blogs compete for traffic and makes the astute point of how a mediocre blog with great marketing can trump a great blog with poor marketing. The part that I liked the best was his observation about the supply & demand for topics. Michael saw a demand for information about the Jessica Cutler story and decided to provide some supply. The result was a huge bump in traffic to his site. He also points out something that I quickly learned when I started blogging over a year ago -- "people would rather read about sex scandals than read about economics. That’s why a great blog like Truck and Barter hardly gets any visits, while Wonkette, who Richard Leiby of the Washington Post just today called a 'foul mouthed vixen', gets about five hundred times as much traffic." My other blog, which covers everything from entertainment to technology, averages four times the traffic of this blog. And even within that blog the posts about some nonsense get way more response than anything that covers a serious topic. Oh well, such is life...


• Russell at the Mobile Technology Weblog makes an example of the mobile phone companies by showing how they're trying to push a technology, MMS, that is probably way ahead of its time at best. There are certainly lessons to be learned from this by many technology companies.


• TJ extracts some valuable business lessons from the disasters in the satellite phone business a few years back. My favorite is this one: "disruptive technologies (a satellite phone) can be disrupted by an even stronger disruptive technology (the mobile phone), don't believe too much in your own pitch".


• David at VoluntaryXchange has several posts examining the economics in HBO's new series 'Deadwood'. I've been fascinated by the series since it premiered. The underhanded schemes that went on in that camp reminds me so much of what went on during the internet bubble, and every other bubble for that matter. And Swearengen should be a business school professor with his "mind on my money & my money's on my mind" attitude. The Ferengi would be proud!


• Barry at the Big Picture highlights a very interesting economic study that was done on EverQuest On-Line. In another parallel to the stock market, EverQuest players are actually paying real money to buy intrinsically valueless items (characters or virtual possessions) via eBay auctions.


• And last but certainly not least, Dr. Duru gives us another of his market missives, and if I'm not mistaken he's dusted off his perma-bear costume.

Here's an example of Guppy's Multiple Moving Averages (MMAs) in action. Below is the NASDAQ daily chart for the last 12 months. The long term group of MMAs is in orange and the short term group is green. Note how the short term group tends to bounce off of the long term group when the long term group is well spread. It's not until the long term group starts to converge that the short term group can slip under the long term group, like what happened in February and March. You can also see how proximity to the lower Bollinger Band (blue) was also a buy signal while the long term group was spread out.

I thought I'd walk through the NASDAQ chart for the last month or so to show you how I came up with my game plan. This chart will look a bit different than the charts I usually post because I'm showing Guppy's Multiple Moving Averages instead of just showing the 10, 50 and 200-day moving averages. (That link gives a good, quick overview of MMAs.) This is actually the set of indicators I use by default when looking through charts every night in TC2000. The chart consists of MMAs (short term group is green, long term group is orange), Bollinger Bands (blue) with a 20-day moving average as the middle band (also blue), and stochastic in the lower panel, and of course Japanese Candlestick charts. The visual nature of these indicators, as opposed to looking for some specific indicator value, allows me to make very quick appraisals of a chart. (My actual charts also have volume and On Balance Volume on them.) So here's the chart, followed by what I was thinking along the way (click for larger image):

This feels like one of those classic 'scratch your head' rallies. Everybody has been so Chicken Little-ish of late, so I'm sure the bears were pressing their luck. Combine that with the fact that the Dow and S&P 500 are now back above their 50 day moving averages, the (expected) light volume ahead of the long weekend, and month-end mark up games and you've got one hell of a recipe for a short squeeze.

I thought the market held up very well yesterday given all the terrorism talk. It started rolling over once Ashcroft's press conference got underway, but quickly recovered. I was impressed and surprised that the NASDAQ was able to close over its 50-day moving average (DMA). Its chart is now looking like just a normal pullback to me based on the fact that the 50 DMA never cut underneath the 200 DMA. The S&P 500 touched its 50 DMA, but closed just beneath it. The real bull/bear battle may be on getting that index to close above its 50 DMA.

So the NASDAQ is continuing the rally it started seven trading days ago, but I think it's about to run out of steam. Its stochastic is now in overbought territory, and although its cleared the resistance of its 50 and 200 DMAs I have a feeling those averages will be retested. I trimmed some of my longs yesterday, and I'm certainly not going to initiate any swing trades ahead of the long weekend. I will hold the longs that I have if I don't get stopped out.

Things are finally looking a little better for the bulls. Yesterday's long overdue rally brought the Dow and NASDAQ back above their 200 day moving averages. So now all of the major indices are in the no-man's-land of being between their 50 and 200 day moving averages. The QQQ looks like it wants to lead the way higher -- it leapt above both its 200 and 50 day moving averages yesterday. I've also noticed that a lot of stocks have risen back above their middle Bollinger Band (also the 20 DMA on my charts) the last few days. Now the $1,000,000 question is will we have any follow through. I'm gonna try to be more of an optimist than I usually am and give my stops a little wiggle room.

I don't see very much that I want to initiate at this juncture. I have a handful of potential longs on my list this morning. But it looks like there will be some good day trades in the security plays today based on the heightened terrorism fears today. The usual suspects will be on my screens today:

(from Briefing.com) 08:19 Homeland security stocks find bid on new terror concerns: IPIX +10.5%, TBUS +10.6%, MACE +11%, MAGS +5.3%, ISNS +3.3%

Commodity Trader highlighted an article entitled 'Losing to Win' over at Investopedia.com. That article does a good job of expanding upon my expectancy article. After reading that article I discovered that Investopedia has a huge archive of articles on trading/investing. (Google has led me to that site many times, but I'd only looked at their dictionary which I've used for definition links from my posts.) I'll be spending some time today d