Wednesday, February 17, 2010

Cost of Olympic Gold Medal

Fun article on the actual Olympic Gold Medal.

Gold Medal Trivia Question: Which of the following is/are made out of solid gold?

a) Olympic Gold Medal

b) Nobel Prize Gold Medal

c) Congressional Gold Medal

(The answer is at the end of this post.)

What is the value of Olympic gold?

(Click on the link)

Tuesday, February 16, 2010

Intermediate Stock Signals Turning

Our intermediate stock signals are turning neutral and will be slightly bearish by tomorrow. The long-term trend remains bullish.

Thus, long-term investors should remain bullish, but "traders" may want to take some gains off of the table (net-net neutral positions for traders, perhaps following short-term trends).

Snow Days and Human Nature

My daughter was very sad today because she had to go to school -- even though it was supposed to be the fourth day of a four-day weekend. We couldn't cheer her up even though she had two snow days OFF FROM school last week.

Last week, when we were getting pummeled by almost four feet of snow within four days (!!), we enjoyed some fun and happy family time on those extra two days off from school. BUT -- if you could measure the fun, it would go something like a "normal happiness level of a 7" up to, say, a "9." (So a decent jump in happiness; we all remember snow days, right?).

However, if we consider that today was supposed to be a day OFF from school, we can see why kids will be sort of bummed. Our daughter's happiness went from the "normal 7" all the way down to about a 2. A BIG disappointment. So -- even with two snow days last week, and today's make-up day, the net is a slight disappointment. People HATE losing something they thought they had!

There is a whole field of behavioral finance, but this morning's "off-to-school routine" made me think of some of the factors that help drive markets. In particular, we can try to use patterns of human nature to obtain an edge:
  • Most people are risk-averse
  • People often "compartmentalize" gains and losses
  • Contrarian methods
  • Fear versus greed
  • Climb wall of fear
We use systematic methods to invest and trade the markets to keep us disciplined -- the human element. We perform tons of research, but then use computerized and automated trading approaches.

Saturday, February 6, 2010

Stock Market Update

Earlier in the week, we thought that our intermediate term indicators might go neutral on the stock market by the end of the week. Because of the decline at the end of the week, more "air was let out of the balloon" -- so our indicators are staying long.

Recent market action has been scary, but that gives more fuel for the argument that we can continue to "climb the wall of worry."

Tuesday, February 2, 2010

Trading Signals and Current Outlook

Our stock market models remain long right now. Depending on market action, our intermediate models may go neutral at the end of the week. The long-term models will remain bullish so that the net position will remain at least slightly bullish. In addition, there still appears to be enough bearishness out there so that contrarian investors can see a continued rise in the equities.

Futures Markets

Many of the futures sectors saw a vicious reversal from the middle of January until the end of the month. This caused losses for trend-followers. Our models had to manage risk and reduce positions a bit, but we generally remained long commodities and rode the recovery over the past two days. The long-term trends have not broken down, so our technical models look for some sustained moves. A look at some markets:
  • Metals (precious metals and copper) - long
  • Energy - long
  • Grains - long
  • Meats - short
  • Softs - generally long (especially sugar, coffee, cotton)
  • Currencies - transitional, so generally flat