Friday, January 30, 2009

Stock Contest Signup

IMPORTANT: If you already have a Wall Street Survivor account, you need to sign up for a new one! After your name please put _cpcontest so that I know you have a new account.

Trading begins on Monday. Prizes are explained here. As mentioned before, the more people, the better the prizes.

Sign up by clicking here. (put _cpcontest after your name!--for those of you who didn't read the first part of this post...)

If you have any questions, leave them in the comment section.

Good luck!
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Reader Email: Backtesting Software

I figure that posting the email conversations I have with readers may help other traders out there. I know that websites and blogs don't always answer all the questions you may have. While I don't have a fraction of all the answers to each question out there, I'll do my best to give whatever of my experience I think may help. Feel free to send emails or post comments. Grab my contact info here.

(Note: If I post something you send that you'd rather not have posted, let me know, and I'll remove it. Also, if you'd rather not have a question posted, give me the heads up in the email itself.)


Flip

Hi,

My name is Flip, I'm going to compete with you in the trading competition
you're setting up.

I'm interested in backtesting some strategies in both (single) equities and
in index futures. Do you recommend any good (and cheap) software for this.
I got some of my data from Bloomberg and used Matlab to program, but the
major problem I have is:

- programming is matlab is not the quickest way to get things done!
- if I want to make a backtest on the S&P 500 stocks I have to take into
account all the changes made to the index over time (thus avoiding
survivorship bias). I have tried doing this using Bloomberg but it is
extremely time consuming to fetch the companies that went bankrupt or
merged...

Looking forward for the competition!

Regards

Flip

Reply:

Hey Flip,

I've used Ninja Trader (http://ninjatrader.com) to do backtesting.
It's free to use for backtesting historical information (it costs
money if you want to use a strategy in the open market). From what I
remember it will actually download whatever historical information you
ask it to from Yahoo Financial (daily historical information only).

I know Dogwood uses Stock Fetcher
(http://www.stockfetcher.com/ui2/index.php) for some of his
backtesting. For free they let you test out some of the features. For
a reasonable price they give you access to many more features. I know
he's also started testing out Wealth-Lab
(http://www.wealth-lab.com/Home/Default.aspx) and I think there's a
way to get a free demo. Otherwise I think the software costs quite a
bit.

Good luck to you in the contest! =D

-CP

PS:

I have also used MetaTrader 4 and your standard programming languages (C++ and Python mostly) to do backtesting. I wouldn't recommend those to the beginner because of the extra effort and programming required, but they are also an option.
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Thursday, January 29, 2009

Reader Email: Setting Up a Forex Account

I figure that posting the email conversations I have with readers may help other traders out there. I know that websites and blogs don't always answer all the questions you may have. While I don't have a fraction of all the answers to each question out there, I'll do my best to give whatever of my experience I think may help. Feel free to send emails or post comments. Grab my contact info here.

(Note: If I post something you send that you'd rather not have posted, let me know, and I'll remove it. Also, if you'd rather not have a question posted, give me the heads up in the email itself.)

Martin:
First, thanks for blogging. I came across your site from Jules. Great stuff, both of you.

Anyways, I read that you're also into Forex, and I'm also just getting started in Forex. I was just wondering, what service do you use, like FXCM or OANDA, or if you have any good recommendations. Thanks.

My Reply:

I've only been trading forex for about 3 months or so, but I've enjoyed using FXCM's platform. I have a micro account. You can open one for $25 and trade using their software, which isn't bad software at all. I prefer it over any of the web browser based platforms. For the micro world, I'd definitely suggest FXCM (although they do charge $10 if you want them to send you a check) because it's a good place to start; they also offer paper trading accounts, which are good if you'd like to get your feet wet. I know there are many, many options though. I'm thinking about trying FxClub because they offer spreadless trading. Instead of profiting from the spread, they make money by commission only if you profit from your trade. They charge $0.40 for each profitable trade.

Jules has been doing this much longer than me, so she may have some good suggestions. Thank you for reading the blog and I'm glad you like it. If I can help you with anything else, just send me an email.

Take care,

Ryan

Martin:

Hey Ryan,

Thanks for your answer. I have a few more questions if you don't mind. Can you explain the difference between a micro account and a standard account. Is the platform in FXCM the same for both account. And finally, do you know of any hidden fees from FXCM besides the one you've mentioned ($10 charge for check). I really appreciate your answer because sometimes, as you know, these companies don't tell the facts. Thanks.

Martin

My Reply

Martin,

You're welcome. I haven't opened a standard account with FXCM yet, but if I understand correctly they both use the same platform. The main difference between the two is that with a micro account you're trading much smaller lots ($1000 lots) while with a standard account you're trading ($10k or 100k lots). Obviously you don't need that much in you're account because of leverage. I think that the standard accounts get slightly better deals on the spread because you're trading a larger amount and the company doesn't have to skim as much to make a nice commission. I guess that would be another hidden fee. I don't know how much you've learned about forex trading but while there's no commission you're going to be paying a small amount called the "spread." FXCM has low spreads compared to some I have seen, but their advertised spread of 1.8 or whatever it is for the EUR/USD pair averages something around 2.8pips or so. I've seen it as low as .5 but it can frequent the 2.5-3.8 range quite a bit. Other than that, I can't really think of any hidden fees.

If you've read this far (heh, hope I haven't written too much) then you should click the following link (http://www.forexmicrolot.com/cnbc.jsp). Sign up through that form and you should be able to get a free $25 micro account through FXCM. When I did it I didn't even have a CNBC whatever account, and it wasn't that long ago. Hope it works if you try it.

Take care and feel free to email me again,

Ryan

Martin:

Hi Ryan,

Thanks once again.

I'm actually pretty new to FOREX as well, and I only understand the basics. I'm currently deciding which account I should sign up for, the micro or the regular. I'm planning to trade the same lot size and even leverage. The micro would be nice, because it requires less deposit and I can deposit more if I want to. Since I'm new to Forex, I don't want to just put $2,500 (min requirement) for the regular account. You did brought up a good point saying that the standard accounts might slightly get better deals on spread. I will take a look into this. Anyways, thanks for your help. Btw, if you don't mind me asking, are you also new to investing, or just in Forex?


Martin

Martin:

I just chatted with a representative at FXCM. I just learned more about the difference between a micro and a regular account. Just in case you are also wondering,

M: Hi, for micro accounts, can I also trade in 10k lot size?
Deric: yes, you can
Deric: you can type in the lot size in the amount K window
M: so, if my lot size can be adjusted as well as leverage, what is the main difference between a micro and a standard account?
Deric: no customization for Micro accounts since it's a discount account set up
Deric: biggest difference is no restrictions on setting stops and limits, 24/7 live client services, phone in trading
M: what is customization?
Deric: all of the above is for Standard (10k) clients
Deric: standard (10k) accounts can customise the leverage for the account
M: you mean, in a micro account, i cannot adjust the leverage?
Deric: no
M: and what kind of restrictions are you referring to?
Deric: such as stop and limit
Deric: Standard accounts you can place those close to your entry price and you can place trades within the spread
M: but can you still set stops and limits in micro even if they are not close to the spreads?
Deric: no, there are restrictions on the Micro account

So I guess, you can't make stops and limits in micro accounts? Can you confirm this? Thanks.

My Reply:

I'm fairly new to both. Been following the US stock market on and off
since March 2008 and more extensively since I started my site. I've
been doing forex for about three months.

As for your question on stops and limits, you are definitely allowed
to use them on micro accounts. The thing is the program won't let you
put them too close to your entry price. So, say you want to limit your
losses and you put in a stop, you won't be able to put it closer than
~7.5pips (or $0.75) away. Though, you can always trade in and out at
any time manually.

Personally, if you're a little unsure, I'd recommend giving their
demo/papertrading account a try. You won't have to risk any money and
you can see how things work by paper trading. It's the safest way to
learn the ins and outs of the forex market and after that you can
decide how much you want to begin with.

Take care.
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Wednesday, January 28, 2009

Goldbugs



I'm working on a short article about this peculiar fetish (i.e. the gold fetish). The more I read, the more I find statements like "Gold is money, and money retains its value" to be foolish.

Think about it this way: if I were to offer you an ounce of gold (no strings attached), would you take it? Most rational people would say yes. The interesting thing is, most won't take it because they will be able to use it for electronics, jewelry, or dentistry, they will take it and turn it in for fiat money. And the person they give the gold to will likely keep it in a safe somewhere.

The point I'm trying to get at is that gold has whatever value people give to it. Yes, historically gold has been used as a currency. But, and I may be missing something here, it seems like it is all in our heads. Compared to other commodities, gold's current utility (excluding the ability to exchange it for other commodities) is limited.

Its value is based largely on tradition. And, even then, that tradition is mired in all sorts of business failings and market crashes that goldbugs fail to mention. Gold has not prevented inflation, as new gold deposits are found value of current gold holdings drop (although how much gold is left to be found is up to debate). And there have been plenty of depressions and recessions with gold as a standard. Another problem is gold hoarding which reduces the amount of gold (i.e. money) in circulation. Actually, because of gold's inelasticity, a gold standard tends to restrain and even stiffle economic growth. From what I have gathered so far, most people are much better off without a gold standard, despite what Dr. Ron Paul says.

I'm still trying to parse it all; I'll post more later. For now, enjoy:


A highly technical look at the gold fetish: "Leprechaun, gimme da gold" rap video. You have to admit, Mr. T is highly convincing.
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Tuesday, January 27, 2009

Charts -- Double Tops, RSI, Multiple Time Frames

Many, many people will advise against the use of the one-minute chart. And there are plenty of good reasons for such advice, the main being that the one-minute chart has tremendous amounts of noise, is choppy, and encourages overtrading. I agree with all of those points. I would never recommend trading solely from the one-minute chart unless you can mentally compress it into a five or fifteen minute chart (yes, you'll receive an edge from this madness). If you think of every five or fifteen candles on the one minute as a single candlestick, then you can obtain the same level of perspective (which provides stability and less noise) while still being able to see how those candles on the five and fifteen minutes were formed. On this chart it is much easier to see the descending support on the one minute than the five or fifteen (I took the screenshot two weeks or so ago and do not have the five or fifteen). I nearly always give the benefit of the doubt to the larger trend, but sometimes it is nice to see what the underlying trend is in order to supplement your knowledge of the five, fifteen, or longer trends.

This next chart is full of all sorts of patterns, as well as a sample of a hedging strategy (I wrote a little about this several posts ago). The main patterns are the double tops that form at least twice. One thing to look for when determining tops or double tops is the RSI. While the RSI can theoretically stay above the 70 point for an extended period of time, on the longer timeframes it typically reverts to the mean (50) fairly fast. Shorting near the peaks, or after the RSI fails to make a new high can be profitable or at least a nice compliment to an already solid system.

The more I have been playing with RSI the more I appreciate it. For more information of the empirical nature, check out The Dogwood Report and Woodshedder and more specifically Dogwood's post Wealth-Lab Developer 5.1 Experiment" and Woodshedder's post "Depressed Relative Strength: Bulls Have the Edge".
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Monday, January 26, 2009

Why the DOW is a Poor Measure of the Stock Market

There are some amazing free trading and investing resources on the internet. If you haven't read John Mauldin you're missing out on fairly frequent insights into the economy. I Mauldin's writings emailed to me whenever he posts something new.

Upside Trader has a weekly newsletter that is not posted on his blog. I've read it the last few weeks and have enjoyed it. He tends to analyze the overall market, putting forth his opinions on what signals and info to look for in the coming week.

This last weekend Upside Trader mentioned one of Mauldin's recent posts. He highlights something that I found curious last week--something that I was going to point out today after reading Mauldin's "Here Comes Tarp 3 and 4". Last week I was surprised when I oversaw CNBC. The ticker for the DOW and the S&P500 was showing something peculiar. The DOW was up ~.5% and the S&P500 was down ~.5%, or something similar. At the time I didn't understand what would cause the divergence; I thought both of the indices monitored similar influences in the stock market. I was wrong.

While the S&P500 is market cap weighted, the DOW is weighted based on the amount a single share costs. When I first heard that, it sort of flew over my head. But what it implies is definitely worth the effort it takes to understand. Here's an example: despite MSFT's larger market cap ($156 billion), IBM (market cap of $123 billion) has a greater influence on the DOW's price. This is because market cap has no influence on the price of the DOW. It is based on share price. MSFT's shares go for 17.63, significantly less than IBM's 91.60.

This really starts to make things look weird when you consider the price of some of the financials on the DOW. They are all very low (e.g. C is 3.33 and JPM is 24.50). Mauldin says all the financials and all of the automakers on the DOW could go to 0, yes zero, and it would have less affect on the price of the DOW than if IBM, all alone, were to go to zero. He adds GE as a financial.

Mauldin goes on to say that there is a tacit rule that anything that falls below $10 is replaced by something else. However, the uproar that replacing C with something else, would be tremendous. Can you imagine the effect it would have on the DOWs price to replace a failing bank with something with a little more perk?

If you want to read his full article, check it out here.

I've heard a lot about why the DOW doesn't matter. Hopefully you now understand that the S&P500 is a better barometer of the stock market (assuming you didn't already grasp that 500 companies would be a better sample than 30).

I'm beginning to wonder how the media may manipulate this divergence to boost the general public's stock market sentiment towards something more positive. Something to look out for, especially considering many, many people use the DOW and not the S&P500 as a measurement of the stock market's health.
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Sunday, January 25, 2009

Two Experiments

Last week I played around with two experiements. Both were performed in the forex markets on the EUR/USD pair. The first one I tried had to do with rollover. It failed miserably. Rollover is a part of currency trading that occurs when the two currencies you're trading have different interest rates. You are either charged or credited depending on whether the difference between the rates is positive or negative.

If you've ever heard of the carry trade, that's basically what I did. I found a currency pair with the highest rollover rate and put on a trade at 4:59pm EST. At 5:00, the rollover rates associated with any pairs you have in your account are either added or subtracted (depending on if they're positive or negative) from your account.

Unfortunately, right when I put on a trade I started losing pips as the market went against me. I held out for the rollover, but it was terrible--a fraction of the spread.

Verdict: Unless you can get a rollover rate of 5pips or more, the trade isn't worth it. Of course, if you were going to put on the trade anyway, you might as well take the extra fractions of a pip. While your broker's rollover rates may be different (they vary), most of the rollovers at my broker are less than 1pip. If the market moves against you, you will get screwed.

The second experiment I did involved hedging a single currency pair. I would buy and sell the EUR/USD pair at the same time. Then I would place limit orders for each at points of resistance. When the pair reached that point the position was covered and, hopefully, the currency would came back towards the purchase point of the other pair. As it did, I would hedge again, locking in any gains I received.

This worked really well for me because the market is entering an area where a lot of retracements are occuring. If the market were trending, I'd do better off riding the trend. But since I don't know if it is going to go up before it goes down, or vice versa, but do have a general idea of where it will find resistance, I can hedge the pair and benefit no matter which way the pair moves at first.

Here are the results (I did this in that $25 free account I got from FXCM a while back):



Disclaimer: Do your homework and take responsibility for your risks. Play with a small amount or with a demo account before putting serious money into the market. I don't want to hear of anyone who was hurt financially by the above experiments. Remember, the first one failed miserably. And just because the second one happened to make me 100% in a week (albeit, that's only $25) does not mean it will work next week.

Take care!
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Saturday, January 24, 2009

List Update and a Short Clip on Odds


A clip from Dumb and Dumber. Also, I picked up a copy of Against the Gods: The Remarkable Story of Risk. I tried to pick up a Michael Covel book (recommended by zentrader and Charlie G.) but they didn't have any in stock.

An updated stock contestant list:
  • Rob
  • fiandola
  • Charlie G (sorry if I misinterpreted your comment)
  • Flip
  • Chuck
  • Afonso
  • Patty


Including me, that's eight. Two more and we'll have our ten necessary for the first round of cash prizes. If you don't want to trade much and still want to participate you can do some quick trades (you need 10 in and 10 out to be counted) and then you can hold onto a static portfolio. If you do that you will be counted toward the above and have a chance at winning some prizes without having to day trade. I won't be able to be at the computer all day to trade (I have class during most of the open market), and I don't think it will hurt you too much to do a more swing trading strategy. Of course, you can trade every ten minutes if you want. Whatever floats your boat (I love terrible cliches).

Add a comment below if you'd like to join. I'll edit the above as soon as I receive the comment.
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Friday, January 23, 2009

Bruce Kovner: Risk and Personalization

What advice would you give the novice trader?

First, I would say that risk management is the most important thing to be well understood. Undertrade, undertrade, undertrade is my second piece of advice. Whatever you think your position ought to be, cut it at least in half. My experience with novice traders is that they trade three to five times too big. They are taking 5 to 10 percent risks on a trade when they should be taking 1 to 2 percent risks.

Besides overtrading, what other mistakes do novice traders typically make?

They personalize the market. A common mistake is to think of the market as a personal nemesis. The market, of course, is totally impersonal; it doesn't care whether you make money or not. Whenever a trader says, "I wish," or "I hope," he is engaging in a destructive way of thinking because it takes attention away from the diagnostic process.

- Interview of Bruce Kovner in The Market Wizards.
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Thursday, January 22, 2009

Stock Contest Update

I wrote a lot below, hope that didn't deter you from joining the contest. Here is the jist of it:

- The contest is free.
- The more people, the better the prizes (see below for the list of prizes).
- We'll be using Wall Street Survivor's group contest thingy.
- I'm thinking Feburary 2nd will be a good day to start. I'll post registration info on that day.

Here's who has signed up so far:
  • Rob
  • fiandola
  • Charlie G (sorry if I misinterpreted your comment)
  • Flip
  • Chuck

Including me, that's 6 people, meaning we'll definitely have a contest for the book and if we get four more people we'll have some money prizes.

If you'd like to compete (and I think there's a good distribution of the prize money) then please leave a message below. Any ideas are welcomed.

PS: Many thanks to Trader-X. Not only does he publish a kick ass blog, but he's sent quite a bit of traffic. If we do make the 10 people, remember to thank him for the traffic. I'd also like to thank Rob for, not only his promotion of the contest (which is much appreciated), but for being the first to sign up.

Thank you.
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Wednesday, January 21, 2009

Stock Trading Contest!

A few days ago I received an email from Wall Street Suvivor. They are offering group sign-ups that allow traders and investors to compete in contests. The cool thing is WSS will pay the group to sign up. The group gets $50 if it has 10 members, $100 if it has 25, and $200 if it has 50.

Now, I don't want the money. Instead, it is going to be part of this contest. The more people who sign up, the bigger the prizes. I haven't decided exactly what the prizes are going to be yet, and would appreciate some input. While I won't be competing for the prizes, I will be competing--more on that below. Also, if you would like to participate, please leave a message in the comments. We need at least 10 people in order to take advantage of the $50 offer. If there are fewer than 10 people, and it still makes sense to have a contest, I'll put up a copy of Liar's Poker for the winner.

Here are some prize ideas:

Less than 10 people:

1st place - Liar's Poker
Anyone who beats me - Linkage, plus a review of your site posted to my main page. (I'm trying to think of something equivalent for those who do not have blogs)

If we have 10-24 people:

1st place - $20
2nd place - $10
3rd and 4th place - $5
Anyone who beats me - Your choice of either an entry into a randomized 'lotto' for Liar's Poker or a review of your site posted on my main page.

If we have 25 - 49 people:

1st place - $35
2nd place - $20
3rd place - $15
4th and 5th place - $10
6th and 7th place - $5
Anyone who beats me - Your choice of either an entry into a randomized 'lotto' for Liar's Poker or a review of your site posted to my main page.

If we have 50+ people:

1st place - $50
2nd place - $35
3rd place - $25
4th - $20
5th and 6th place - $15
7th, 8th and 9th place - $10
10th and 11th place - $5
Anyone who beats me - Your choice of either an entry into a randomized 'lotto' for Liar's Poker and Beating the Market (by Charles Kirkpatrick) or a review of your site posted to my main page.

Again, I am not competing for the money and am competing merely to reduce the amount of front page reviews I will have to write (or whatever prize we happen to think of). That means that all of the money is for you (well, you in its plural form).

There are a few rules that Wall Street Survivor requires everyone to follow:

- Each of the participants must make at least 10 trades in order to count towards the money.
- You will not be able to spend more than 25% on any one stock.
- You get 100% margin.
- I think they have delayed prices, so please use Google Finance or some other real-time service to get your quotes.

My own rules:

- No resets! (Not sure if it will be turned on or not. But you will not be able to do it without making me, and the other contestants, very angry!)
- One account per trader! (I don't want the same person winning all of the prizes; any extreme similarities between account trading styles will be investigated, and I'm definitely not dumb enough to send two cash prizes to the same paypal account).
- PayPal charges and shipping costs will be covered by me. After I receive the check from WSS I will deposit it and send you the money through paypal (or some equivalent service). You'll receive all of your prize with nothing subtracted by the paypal monster.
- I may insert more rules before we start. Please help me out here. I want this game to be fair and fun.

Last, but not least: If you have any ideas or think that the prize ratios should be restructured, let me know. Comment, comment, comment. And, of course, let me know if you want to participate. I'm not going to start the competition by myself.
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Tuesday, January 20, 2009

The Trend is Your Friend (and most likely a demi-god, so be nice)


Odds of 58.2% with equal downside and upside is a bet you would want to take, especially if you could take it again and again. Although the edge may look insubstantial, no casino you go to or lotto you participate in is going to give you such an edge. If you're relatively patient, I'm certain you'll be somewhat pleased over time (unless you were looking for a rush).

The screenshot clip is from a new game at Wall St Survivor that allows you to bet 50 "loyalty points" on the next tick on a random stock. What I did for 122 times (I had to get to class, but I did this last week too, with similar positive results) was place my bet on whatever direction the stock was heading at the time. Basically, I was following an extremely short range trend. If the line chart was heading up, I bet up; and, vice versa. Not bad for little effort (albeit, you need 50,000 loyalty points to trade for $5...if only I could develop a cmoputer program to do it for me).

You may be thinking: hey this is cool, but I don't think it will work on a larger scale. Well, I beg to disagree, and so do many influential and successful economists, traders, and investors. Here is my theory--derived and distilled from such brilliant minds as Robert J. Shiller, Charles Kirkpatrick, and Michael Covel, among many, many others:

Trend following works on the large scale because when companies are successful (or percieved to be successful) people will continue to invest in them, pushing stock prices up. Most people are not going to put their entire savings into a stock and never invest in it again. Many people are going to put some money into a stock, wait for their next paycheck and put more money into it as long as the stock continues in a positive direction. They may also tell others about their success, increasing the demand for the shares, further strengthening price. This is what Shiller refers to as a postive feedback loop. As money experiences success, more dollars will follow.

The same works for the downtrend. If people are panicking around you, you (maybe not you but the statistically average person) are also going to panick. The process feeds on itself driving prices further downwards. People will probably tell their friends about their lack of success in the stock market and warn them to stay away. People may also feel sick to their stomach continuing the optimistic investment process they had performed up until then, further reducing demand.

So, why does this work in the short term? Well, in order for the line chart to be driven upwards, greater demand than supply must be present, meaning more buyers than sellers (i.e. a greater chance for an uptick). When there is a greater supply than demand, you will have the opposite.

Put your bet where you have the greatest odds.
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Monday, January 19, 2009

Seven Important Candlestick Reversal Pattern Pairs

Candlestick reversal patterns can be a boon to any trader's repertoire. Combining them with support/resistance lines and other indicators can increase a trader's edge substantially. Each set below contains both the bearish and bullish counterparts. These are ideal setups that require directional movement (i.e. nothing range bound). The more volume at the given point, the more strength each of these patterns portend.

Bearish and Bullish Harami -
Identified by a long bar followed by a very short one. Harami signal a loss of momentum and a possible reversal.

Dark Cloud Cover and Bullish Piercing Pattern - The dark cloud cover and bullish piercing patterns reveal weakness in the current trend and emerging strength in the opposition.

Shooting Star and Inverse Hammer - Both the shooting star and the inverse hammer have a small body with long upper wicks. THe shooting star shows the failed attempt of the bulls at maintaining control over higher price levels, while the inverted hammer is like a spring ready to pop.
Bearish and Bullish Engulfing Patterns -
In the bearish and bullish engulfing patterns, the opposing side's strength overwhelms previous advancement. These tend to be stronger than the dark cloud cover and the bullish piercing patterns. Make a note of the difference: in the engulfing pattern the second candle completely overtakes the first.

Hanging Man and Bullish Hammer - Both the hanging man and bullish hammer resemble the shooting star and inverted hammer, however they are flipped. The hanging man and bullish hammer display a struggle between the bears and the bulls. In the first, the bears are beginning to gain traction against prior bullish strength. In the second, any movement downward has been stalled, signalling a possible bullish reversion.

Southern and Northern Dojis - The southern and nothern dojis are some of the most watched patterns in the candlestick charting world. The both signal a parity between the bears and the bulls. At the moment a doji forms, and as with all these signals increased volume strengthens the pattern, momentum has been prevented from continuing. Sometimes this signals confusion, sometimes this signals a stronger opposition with increasing attrition of the side previously in control.
Morning and Evening Stars - The morning star and the evening star do not necessarily have a doji as pictured here. The top candlestick will be shorter and if it is a doji, signals increasing odds that a reversal will take place. These two patterns, though rare, give the highest odds of reversal. Strength goes in, it faces stiff resistance, after which control shifts hands.
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For Your Enjoyment


Two sexy pandas.
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Sunday, January 18, 2009

Quote

"To those human beings who are of any concern to me I wish suffering, desolation, sickness, ill-treatment, indignities - I wish that they should not remain unfamiliar with profound self-contempt, the torture of self-mistrust, the wretchedness of the vanquished: I have no pity for them, because I wish them the only thing that can prove today whether one is worth anything or not - that one endures."

- Nietzsche
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not much

I don't feel like posting much tonight, although I did began writing a candlestick reversal pattern article today. In the trading world, my stubbornness has gotten me in trouble; I'm down quite a bit on a trade that I have yet to close. Stubbornness is something that I definitely need to work on.

I did make my own resolutions chart, as the Happiness Project suggests. All six of the goals are nothing too complicated--I just want to be able to do each one every day for at least 30 days. Two focus on physical well-being. Two focus on relationships. And the last two focus on trading.
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Saturday, January 17, 2009

Saturday Night Live Speaks the Truth About Brokers


Saw a link to this clip on Twitter.

PS: Reading and playing Inspectd. Trying to get my equity up to $500 million. Might be a little too ambitious. I got up to $10million, but then got destroyed. Some people on there have $100 Septillion. I really need to work on my technical analysis skills. =)
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Friday, January 16, 2009

The "W" Formation


This is the first pattern that I ever learned. It signals bullish action. What you're looking for is one candlestick that looks almost like a cross (these are called "doji"). If the stochastic is low, the RSI isn't too low (not less than 30) and volume (in the chart here there's no volume because volume doesn't function the same way in the forex market) is high, then you're on your way to forming a "W". What you want to look for next is a burst of strength to the upside; this will form your center point. Eventually you will use this as a confirmation. And you will need Surety Bonds. Watch for another pullback creating a higher low point. This candlestick will likely be shorter than the previous base, although this too could be a doji. Look for the stochastic to be oversold again, but not quite as low as before. As the chart shifts off the low look for an increase in the RSI that surpasses the previous reading. It's good if this continues going up--the stronger the better, until somewhat over 70 (then the chart may be getting top heavy). In any case, the "W" formation is confirmed as long as the RSI continues upward and the candlesticks pass the mid-point in the "W". In my experience, it tends to be a reliable indicator. Again, the more volume on the two bases and the stronger the RSI the better.

PS: My links are nearly all cleaned up and the post labeling is done on all back posts! Something to be proud of =) I am developing my own resolutions chart (a la Happiness-Project) and have come up with several ideas to improve the blog. More later.
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Thursday, January 15, 2009

Doji with Volume


Volume significantly picked up today on all of the indices, plus dojis formed on, at least, the DOW and the S&P500. Dojis accompanied by heavy volume tend to signal reversals, which, at 820 on the S&P or ~8000 on the DOW (both areas of previous resistance) makes sense. While a rise isn't guaranteed, this setup certainly increases the odds, as does anticipation of Obama's inauguration next Tuesday.
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Site Crap, Ideas

I really need to research and understand rollovers in the forex market. I got raped by one today because I was short EUR/USD around 4:00PST. The position wasn't awful when I left, but when I got back my P/L was up quite a bit. But the price hadn't moved much at all. I got hurt by the rollover. I'll put it all into an article and explain how you can use it to your advantage, basically setting up your own carry trade. But, doing the opposite of the carry trade will get you hurt.

On a different note, I have been clearing out my offsite link section. I decided to make it a little more like a community, linking people who link me, comment here and who I talk with on twitter. I'm sure you can find links to The Big Picture and Abnormal Returns elsewhere, and I'd be surprised if you found my site without stumbling across those earlier. There's no real reason to have them on the sidebar. Another thing that bothered me was that I only get so many hits. I figure I might as well give those who contribute and support me better odds at getting more traffic for themselves.

Another thing that I have put off too long is labels. So I have been working on adding labels to my old content.

Basically, I am trying to spruce things up a little, change things around to make the site more helpful and useful. I have quite a few ideas for articles that I'd like to put together--seems like the articles generate the most interest and attention. I also want to develop some other novel content ideas. Maybe a historic chart of the week, a random trading fact, a weekly economic quote/excerpt with commentary, or an interview of some of you traders out there; something of that sort. I enjoy the writing and, now that I have near-daily postings down, I would like to cultivate and nurture the content somewhat. Any ideas are welcomed.
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Forex, Poker, Chicks, Beer, Drugs, Sans the Last Three



After closing out my big trade yesterday morning, I took a break from trading. Even though it would take quite a bit of effort to blow my entire gain, whenever my emotions swing towards euphoria or desperation my rationality tends to withdraw. This morning I did a little work on my risk management. No big trades or anything, but if I can keep the losses down pips start to grow like I fucking planted them.

For the EUR/USD pair, I have a short entry order in at ~1.314. Another good entry point is ~1.309, for the short. Seems like the general consensus is this is going to retest its lows.

The deal is, I tend to play some longs and shorts throughout the day using a variety of support/resistance, trendlines, and indicators (MACD, RSI, and Stochastic). But I put in some entry orders at ideal locations. Sometimes I can't wait and I put in an order early, which tends to get mauled until the ideal levels get hit. Of course, that doesn't always happen, which is why I'll probably continue to do it. As my dad would always say, "If I were I doctor, I'd go out of business." (Refering to his lack of "patients.")

Yeah, everyone knows that's a terrible joke. But the man is fucking scary. So it was always in our best interest to at least force a smile.

In other news, I played some poker last night and had a 50% return while my brother took off with 400% on a single hand. Shit. And the thing is, he rarely bets past the flop. Fucking dead giveaway. Oh well. We were playing with a dollar buy in, so maybe I can get him to buy me some tacos.

PS: Sans means without or lacking, hence, sadly we had no chicks, drugs, or beer while playing poker. Such is the life of a beginning trader. Maybe next year...maybe next year.
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Wednesday, January 14, 2009

Trading Advice from Michael Marcus

Q:Having been through the whole trading experience from failure to extreme success, what basic advice could you give a beginning trader or a losing trader?

A:The first thing I would say is always bet less than 5 percent of your money on any one idea. That way you can be wrong more than twenty times; it will take you a long time to lose your money. I would emphasize that the 5 percent applies to one idea. If you take a long position in two different related grain markets, that is still one idea.

The next thing I would advise is to always use stops. I mean actually put them in, because that commits you to get out at a certain point.

Q:What other advice would you give the novice trader?

A:Perhaps the most important rule is to hold on to your winners and cut your losers. Both are equally important. If you don't stay with your winners, you are not going to be able to pay for the losers.

You also have to follow your own light. Because I have so many friends who are talented traders, I often have to remind myself that if I try to trade their way, or on their ideas, I am going to lose. Every trader has strengths and weaknesses. Some are good holders of winners, but may hold their losers a little too long. Others may cut their winners a little short, but are quick to take their losses. As long as you stick to your own style, you get the good and bad in your own approach. When you try to incorporate someone else's style, you often wind up with the worst of both styles. I've done that a lot.

- Both excerpts from the first chapter of Jack Schwager's Market Wizards. Remember to check out DT's site on Tuesday to discuss. The book is elucidating, entertaining and enlightening. (And there's your weekly alliteration fix).
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Determination Pays Off: 211.7 pips


Hope someone else used the daily chart I posted yesterday. Awesome setup, very nice overnight trade =)

Take care and good luck.
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Tuesday, January 13, 2009

Kurt Vonnegut on the Stock Market

"The name of the book was The Big Board. . . . It was about an Earth-ling man and woman who were kidnapped by extraterrestrials. They were put on display in a zoo on a planet called Zircon-212.

These fictitious people in the zoo had a big board supposedly showing stock market quotations and commodity prices along one wall of their habitat, and a news ticker, and a telephone that was supposedly connected to a brokerage on Earth. The creatures on Zircon-212 told their captives that they had invested a million dollars for them back on Earth, and that it was up to the captives to manage it so that they would be fabulously wealthy when they were returned to Earth.

The telephone and the big board and the ticker were all fakes, of course. They were simply stimulants to make the Earthlings perform vividly for the crowds at the zoo—to make them jump up and down and cheer, or gloat, or sulk, or tear their hair, to be scared shitless or to feel as contented as babies in their mothers' arms.

The Earthlings did very well on paper. That was part of the rigging, of course. And religion got mixed up in it, too. The news ticker reminded them that the President of the United States had declared National Prayer Week, and that everybody should pray. The Earthlings had had a bad week on the market before that. They had lost a small fortune in olive oil futures. So they gave praying a whirl. It worked. Olive oil went up."

—Kurt Vonnegut Jr. Slaughterhouse Five

This was quoted in The Market Wizards by Jack D. Schwager and the reason I am posting this--besides the fact I love Kurt Vonnegut--is because DT is hosting a book club next Tuesday, and he chose The Market Wizards for the first book. I just started reading it (d/led it) and am enjoying it immensely. I'm sure DT wouldn't mind if I invited you to join, so please feel free to click here or on any other links to his site, check it out, and begin reading.

On a side note, somewhat related, I suggest you also check out The American Ruling Class, a movie/documentary with an appearance by Kurt Vonnegut. It follows two ivy league graduates who seek advice on how to live their lives. Anyway, read more about it here or watch it here. I strongly recommend it.
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Some Charts for Tuesday

I commented directly on each of the charts. I'm trying to take more screenshots as I trade the market so that I can see what I was looking at after the trade is completed. Attitude Trader talked about using X-trader's journal suggestion for the New Year, and I want to give it a try as well. Feels like it is helping me out so far. (Didn't realize I hadn't labeled the currency charts. They're all EUR/USD and mostly from the 15 minute perspective. The first is the daily outlook for the EURUSD pair.)








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Monday, January 12, 2009

70+ Pips


This is my first decent return in my Forex account. I have gained enough confidence that I no longer worry about letting my trade mature, despite all of the fluctuations in the market.
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The Death of Capitalism? On the Contrary, the Death of Socialism.

While I have some charts from last week and a few from my forex trading today that I’d like to post, at the moment I’d like to discuss something else: The Death of Capitalism; or, on the contrary, the possible renaissance of Capitalism that will be born from the ashes of Socialism.

Over at ContraHour, the most recent post on Martin Armstrong’s work piqued my interest. It focuses on the question often asked in the media: Does the current crisis suggest that Capitalism is dead?

He argues that this is not the case—far from it.

To understand the reasoning behind his conclusion, we should turn to Armstrong’s main contentions:

1) “Vote for me and you will get something for nothing” is a central tenet of our current government doctrines (socialist).

This is the steal from Peter to pay Paul idea, except at the moment, the politicians are stealing from a Peter who has yet to be born to pay for a Paul who may never die (I exaggerate, albeit people are living much longer than expected). People aren’t being encouraged to work at developing new skills in order to obtain better health care or a higher standard of living; instead, they are obtaining a higher standard of living and longer life spans funded by debt.

2) We cannot spend our way out of a crisis that stems from excessive leverage and debt, but government is definitely going to try.

Armstrong discusses the collapse of the Spanish, the Romans, the French, and how all of these collapses were caused, fundamentally, by excessive debt. Each of these entities failed to understand the importance of maintaining their credit. If we do the same, and we are on are way, we too could face collapse as we struggle with untenable debt to foreign entities.

Armstrong argues that, of course, the government will try to spend its way out of the mess it has created for itself (e.g. Obama’s stimulus plan, bank bailouts, auto bailouts, etc). This is done so that those in positions of government power can retain their power. However, such spending can only go so far before it begins to oppress the members of the union, leading to revolt or extreme discouragement.

3) Communism and socialism centralize power in the government, not in the forces that increase wealth, forge progress, and enhance life in the long-term.

Because of the tendency for government to misallocate resources (refer back to point number one for the reason this happens), the centralization of power can stifle progress and harm citizens. While communism and socialism redistribute wealth in order to more equally equip members of society, capitalism distributes wealth to those who develop skills and towards that which allows progress.

4) “Where in a normal economic model, to earn more one improves his skills, the Communistic model promotes advances income without improvement in skills” = Unions stall growth and causes skill to remain stagnant.

Currently, one of major strongholds of a union (the Detroit automakers), is displaying its own ineptitude. Compared to the non-union production models of automakers in the South, Detroit is failing miserably.

Teachers’ unions are perhaps an even better example of the failure of the union. Instead of making the educational environment more potent, it enables many teachers to continue work that they may not be suited for simply because of the difficulty in firing them. Through the collective, those without the necessary skills can impede the functioning of the education system. This happens in any business that is forced to use a "one size fits all" approach.

5) Unfunded state promises will collapse. It is helpful to understand them as an attempt to impose a Marxist-like (i.e. Utopian) environment on society.

Social Security, Medicare and Medicaid, are unfounded liabilities. The government cannot maintain these promises for very long, especially with the mounting economic crisis, the baby boomers coming retirement, exploding debt, increasingly expensive health-care, and more.

Yes, without these promises our union will not be as utopian-like as it would be with them. However, remember what the word utopia actually stems from: the Greek for “not” “place,” or a nonexistent place. While the homophone eutopia in Greek means “good” “place,” it is much more likely that when Sir Thomas Moore wrote his book he intended for the former to take precedent over the latter, as his vague explanation of the perfect society is oftentimes humorously na├»ve and at others satirically unbelievable.

It is time to stand back and look at what the current situation is telling us.
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Sunday, January 11, 2009

The Correlation of Happiness and Success

Someone posted a link to my site on the Google Finance message boards over the weekend. I guess quite a few people found the image below fairly humorous, which makes me happy (while many may not appreciate the XKCD humor, if you have ever had an interest in math, science, or computers, it may be just for you). Actually, every time I find Google has directed someone to my site because of something I wrote or posted I feel fairly good about myself. While this tends to lead to an anxiety about whether I can continue to provide content in an interesting manner and a consistent basis, I will push myself to get over it and test and play with ideas. Failure isn't failure unless you let it be.

And I suppose that is partly where I intend to go with this post. Last night, a friend who is living in Spain for the next six months or so sent me a link to check out. She said it was kind of corny, but when I got to the site, it was anything but. With sites dedicated to the attitude aspect of trading (there are many, because it contributes a large portion to being a successful trader, but I am mainly thinking of Attitude Trader), I thought it might be beneficial to post the link she sent: Happiness-Project.

While the entire site is full of useful information for maintaining a good attitude and alleviating stress and escaping feelings of failure, a link to one article struck me as particularly important in the realm of trading (and the economy, for that matter): Does Money Buy Happiness? The conclusion is that many wealthy countries self-define as less happy than certain poorer countries. The reason for this is because happiness is not defined by money, despite what popular culture may have us believe, but instead by success and perceptions of success. The article delves into many reasons why this is, but for the most part it has to do with feeling valuable. Yes, being in a job that makes you money can make you feel valuable, but if you do not participate in other social or intellectual pursuits that may not directly make you money, you lose out on certain value components that will weigh on any feelings of success you may derive from work.

Even instances of failure can be used as stepping stones to success. Embrace the failure and the possible loss of money (whether real or imagined) and proceed. It takes more than two steps to get from wherever you are to the top of the world. Learn to treat each step as a success, whether you find yourself retracing or tripping, climbing or falling.
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Saturday, January 10, 2009

The Good About Steve Jobs' Weight Loss

Lightest and thinest CEO ever.
(Comic from XKCD)
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Thursday, January 8, 2009

Notable Posts

Trying to gather some of my more desirable and encompassing information here:

A Simple Use of Moving Averages: Trend Determination - In this post, I strive to set forth one of the simpler methods of trend determination I know.

Practice Makes Better - You've heard it a million times before--it's a cliche that is worth its weight in gold (not that it makes any sense to weigh a cliche...).

Why a Plan is Pertinent - Short and sweet advice for the impulsive types.

How to Play Liar's Poker - Another relatively popular article that explains the subtleties of this bluffing game (Michael Lewis named his famous book after this game).

34 Steps to 25,000 - My optimism overtook me here. But, at least this gives some idea as to how much effort it would take to get from $1,000 to $25,000.

Making Money with Simple Point and Figure Support and Resistance Trendlines - Probably my most popular and helpful article. Gives a primer on some techniques any trader can use to determine relatively clear support and resistance lines.

Zen Poetry - Somewhat enigmatic, I'd probably stick with the "Stock Club" rules below; however, these ideas have helped me.

WSJ for Free - My attempt to flee the poverty that oppresses me (i.e. How to get the Wall Street Journal for free; legally!)

Mr. NYSE BPI and Mrs. VIX - A post discussing some basic ways to interpret and understand the NYSE Bullish Percent Index and the VIX.

Triangles - Good example of triangles on point and figure charts.

Strangle LEH/WM? and In times of turbulence, Options are a good Option - An experiment with straddles and strangles on LEH/WM before each of their collapses.

I can't do that, Dave - My first attempt at making a program to help me with technical indicators.

First rule of Stock Club... - A list of rules that (in my opinion) a successful trader will take into consideration.

Fruit ripe for the picking - My (as it turns out, prescient) first post and a good example of resistance and oversold stochastics.
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"So Sick of Complacence Now"


"Know thy Enemy" by Rage Against the Machine.
I've got no patience now. So sick of complacence now.
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2.50 Feb SOL Calls @ 2.55


I like that burst of volume just a few days ago. As long as SOL can hold above its 20 day EMA, I'm happy. I may have gotten in a little early. Looks like it may pull all the way back to 4.21, its 20day EMA. Still love the price/volume action.

PS: Got out of my COST Puts @ .60 for a loss.
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Wednesday, January 7, 2009

NYSE Bullish Percent Index


At least since '00, there hasn't been such an extreme and direct rise in the $BPNYA. Moving from below 30% to above 30% is considered a bullish signal. Going from above 70% to below 70% is seen as a bearish signal. I don't know exactly how to read the signal at the moment. But from the way I understand it to work, I think there are two good interpretations, that might be useful when combined with other indicators:

1) The market was so oversold that everything is registering bullish signals. Because of this, it is the time to buy, buy, buy.

2) The market is being irrational. This many bullish signals cannot be supported given the current economic environment. The BPNYA index is due for a pullback.

The second is more along my line of thinking. Check out the Chart Addict's newest post. He points out a rising wedge, a bearish signal. Actually, most of the site's I read and follow are currently bearish and, at most, considering a bear market rally before bearishness resumes.

I agree. But I am wondering if the government/media/someone will find a way to present the unemployment numbers on Friday as better than expected and representing a "bottom." In other words, I'm watching my back.

PS: Been doing a lot of digging and twittering. Working up my accounts and actually making some money on twitter (a pittance, but that's to be exptected). I am slowly edging myself away from those time sinks...
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200th Post

I updated the site a bit for its 200th post birthday. The layout is definitely improving ever since I embraced the ideation of sexing things up.

What I really wanted to say was that I appreciate everyone's support, all the comments I have received, the suggestions, the tips, all of your sites, the visits to my sponsors, the camaraderie and so much more. I can't believe I have come this far. For all of you thinking about making your own blog: it isn't easy--but, it is worth it.

Here's to a good 2009 and another 200 posts.
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You Think Housing is Bad Now? Just wait...



- "The problem now is that the insanity didn't end with the sub-primes...there were other exotic loans: alt-A's and option ARMs."
- "The teaser rates will go up. A mortgage payment of $800 a month could easily jump to $1500."
- "70% of these option ARMs will default."
- "We're looking at about 3 to 4 to 5 years."


(h/t Chicken Smith)
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Tuesday, January 6, 2009

Some PnF Ideas

I thought it might be beneficial to show those interested one of my methods for finding playable stocks. This method involves going to Stock Charts' Stock Scan (link also in the sidebar under 'Important Technicals') and scrolling to the bottom, in the Point and Figure section. It doesn't really matter which filter you choose. Make sure you're shorting bearish stocks and buying bullish stocks, though. In this instance, I chose 'Descending Tripple Bottom Breakdowns.' It'll give you some stocks that show this pattern, and I chose a few that had a price over $10. You can go with the penny stocks, if you like, just be aware of their risk, and the fact that you may not be able to short something under $5 if you do not have sufficient capital.

Grab a few of those stock tickers, put them into the Candlestick Chart form. Add some useful indicators like RSI, MACD, Full Stochastics, 20/50/200 EMA, etc. Then do a comparison between the PnF and Candlestick charts. I've done most of the work directly on the charts below. My favorite out of the three is probably UTI. But I would be careful with any of them, as the market is in bear market rally mode. All three definitely look good for a short on overall weak market days.














Use caution. Take responsibility for yourself. Remember risk management is number one!

PS: Downloaded Think of Swim's software to do some paper trading practice. Looks solid. Thinking about posting some results as I progress.
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Monday, January 5, 2009

Tres Charts









Look at the MACD slowly edging towards a positive divergence on the SPY's weekly. Signals an increasingly bullish outlook.
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Sunday, January 4, 2009

Charles Kirkpatrick

Three charts that I found using a slightly modified version of the relative strength method described in Charles Kirkpatrick's new book Beating the Market:



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Some Updates

Been updating the page to make it somewhat more professional. Added an about, contact, FAQ, and disclaimer page which will be linked to from the righthand side. Also, I have added a "delicious" bookmark app to the right-most sidebar, underneath the google ads. I'll add what I am reading at the moment over there.

More updates shortly.
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Disclaimer

I'm an amateur day and swing trader. I get my information from many talented people on the web (some shown in the links section), and through my own blood, sweat, and tears. Because of that, and the fact that I have only been doing this since March 2008, I strongly encourage you to do your own research before placing any money into the stock market. Unless of course you want it to be like roulette (Russian, perhaps?); in which case, ignore my posts and welcome to Vegas!

Basically...
Take responsibility for your own investments and trades. I am an amateur and make no guarantees and give no advice. This is for my own education and entertainment. If you want to use any information found here, please ask an acredited financial adviser who can legally suggest strategies. Thank you.
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About

I go by the moniker Complacent Panda. I discuss topics, largely, in the economics field, with some tangents into politics, art, philosophy, or whatever I find myself interested in at the moment. I am a full time student, who does part time tutoring (math, science, english, whatever).

Goal
The goal of this site is to guide and develop the skills necessary for trading in the stock market, the forex market, or on the options exchange. When I started, I felt that trading was quite possibly my best bet for making money based on a reward system.

'Blogging' History
I have been on the internet since I was in 7th grade and have been making websites since shortly thereafter. I began with a video game site which slowly developed into a rom/emulation site. At 13 I received my first advertisement check. After that I made myriads of small blog-esque sites that never developed into much. Before developing Complacent Panda, my last success occurred during high school. I designed a simple backend that allowed a group of friends to post random, original articles to a central location.

Investing History
Even before '08, back in '99/'00 I started a project in class on investing in the stock market. I chose to invest my virtual $100,000 into Cisco. At the end of the project I had more than doubled my money, planted the psychological seeds for future interest in investments, and was in first place for total profits. While the .com bubble would pop shortly after, because of my age (8th grade or so) I was largely unaware of the consequences--what really stuck in my mind were all the people around me making fortunes in Qualcom and other technology companies.

Most Recent Impetus
It wouldn't be until March of '08, during the Bear Stearns collapse, that I would become intensely interested in investing (talk about alliteration). After watching the disconnect between televised analysts (i.e. Jim Cramer apparently misleading people about Bear Stearns' solvency, Ben Stein stating the problems should be ignored due to their relatively small and insignificant size) and those on the internet (i.e. several competant people pulling large profits by shorting Bear Stearns, and purchasing it or strangles on it when it was around $2, and reaping large profits); I decided to do some research.

The Conclusion I Made
There had to be a way for people to have some idea of where the market was going. Despite my grandfather's constant warnings and televisions dramatic idiocy, someone out there had to know where the market would likely head. And if I could find those people, perhaps I could reap some profits of my own.

Final Summation
That's why I developed this site: to develop ideas that will assess the probability of the market moving in a certain direction and use those ideas to reap monetary rewards.
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Contact Information

You can contact me via any of the following:

email: complacentpanda at gmail dot com (make the necessary substitutions)
twitter: http://twitter.com/complacentpanda

If a post focuses on what you'd like to discuss, please comment there. I receive an email whenever someone comments and will try to get back to you as soon as I can.

Thank you.
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FAQs

As I get asked more questions, I will update the below. Feel free to ask whatever is on your mind!

Q: Why the moniker Complacent Panda? Will you rename yourself when the market turns bullish?

A: I came up with the name one day and mentioned it to my brother. He liked it. I liked it as well, so I came up with several (yes, ad hoc) reasons as to why it is appropriate for a trading website.

1) On a long enough timeline, everyone's (including corporations, as they have been ruled to be entities) life expectancy drops to zero. While that could be interpreted as rather morbid or pessimistic, from my experiences with life and science, it does appear to be the truth. For instance, GE (General Electric) is the only company of the original thirty to still remain on the DOW. Or, in my general terms, think about all of the people you know over the age of 120. If you're like most people (or all), you do not know anyone. Well, corporations, while longer lasting, are similar to people. And similar to most all things. Everything submits to gravity, entropy affects everything.

Because of these "facts," I figure a bear would be a good moniker. Of course, it is nice when the market rallies, and things grow, develop, and evolve. So, I figure the bear must be pretty damn complacent most of the time. Hence, my choice of Complacent Panda. Because of this, no I will not change the name during bull markets. During bull markets, the panda is mostly sleeping and eating delicious bamboo.

2) I thought it would be a fairly ironic name. Mainstream media often associates Pandas with the Chinese. MSM also likes to say the Chinese will take over the world (and maybe they will; they do own a good portion of our debt--then again, that could work in our favor). Who would ever consider the Chinese to be complacent? Not I. On a side note, no, I am not asian.

3) I don't know. I like the first one the best. Maybe I will remember or think of some other reasons for the name at a later date.

Q: I have a question, how can I get a reply?

A: You can find my contact information on the contact page.
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Saturday, January 3, 2009

Stumbling Around

I'm still here. Been somewhat bummed by the rally (I should've listened to myself; I posted some comments in my COST puts post). It may not hold, but I definitely would not be surprised to see it do so. Quantifiable Edges has a post on how 1st weeks after a terrible year tend to do well.

I have some charts on my other computer that I will post and comment on later. For the moment, I thought I would post this lovely picture. Ever since Dinosaur Trader brought StumbleUpon to my attention, I have been completely addicted. It offers much better content than any social internet program or site I have seen. I used it back in 05 or so, and it has definitely improved--not that this picture represents its best content =).
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