Monday, May 31, 2010

Weekly Sector Report: 05/28/10

click on all graphics to make larger/clearer)

Last week was quite a rebound in the market with the broad market index advancing .52%.  There was a notable rebound in many of the sectors. Here are the top/bottom 10 industries for last week.  This information is available to non-subscribers at the WSJ Industry Page, which you can find here.

 There is always a bull/bear market somewhere...just make sure that you are looking in the right places.

I've prepared for the the detail chart book which you can find here.  Because it is month end, I also included the monthly charts.  IN ADDITION, I created performance charts for all 24 Sectors! I think that you'll find them interesting because I started with March 1, 2009 through May 28.  I've also included bookmarks to make this report more navigable.

If you are not familiar with performance charts, they measure the price performance relative to a starting place. Here's an example of a performance chart for the Total Stock Market Index from 03/01/09 through 05/31/10:

Note the volume by price bars.  If we break down trough the yellow area, I believe that we could quickly cut through the blue area where there is little "price memory" in the market.   The market did manage to gird it's loins and hurdle above its moving averages.  I use the 13 + 34 exponential moving averages combined with the 89 day simple moving average.  I have Osso to thank for the suggestion of taking the 89 day moving average from an exponential to a simple basis.

Melange Post

I had a busy weekend.  On Saturday, I overnighted Jonesy, the handsome lead English Setter, who is being trailed by Daisey and Ella.  He also had a traveling companion, Shena, a female English Setter mix.

More about this picture in a minute.

These dogs are traveling to foster homes from South Carolina to northern destinations  Jonesy was going to Wyncote PA, and Shena to the right. They were well behaved house guests, and my three girls (two pictured above) were very accommodating

I drove to Alexandria yesterday morning.  It is a two hour drive from my home.  It was a pretty day, and I passed many motorcycle pods going toward DC for the annual  Rolling Thunder Motorcycle Rally.  I didn't know anything about this until my fellow transport colleague from that area told me.  I hope that you'll take a moment on this Memorial Day Holiday, to read about it.  I hope that you will take a minute (or longer) to honor the memory of those who have fallen and to thank those currently serving or who have served in the past.

There were two bridges on which several people were waving (hands and flags) or putting up flags.  They seemed genuinely happy to be greeting the faceless, nameless drivers proceeding beneath them.  I imagine that today the bridges and the road ways will be more crowded.  I'm happy to not be traveling them, but rather to be seated at my desk.

Regarding the first picture of Jonesy being followed by my two girls......Jonesy does not have a clue as to where he is going, yet he has two interested followers.  Some market pundits sprang to mind.  Draw your own conclusions!

Veterans!  Thank you for your service.

Sunday, May 23, 2010

Finding your Inner Blogger

Most people think of blogging as very public affair. They would no more write a public blog than they would run naked through a crowded square. I'm writing today to encourage you to create a your own private blog. If you first shuddered upon reading that, I want you to re-read it. "Private" is the operative word. You can easily set up a blog on Blogger (and I presume other venues, but my experience is with Blogger) in such a way that it is private only to you. However, if you have Unibomber or Ted Bundy tendencies, then I would suggest to you that a private blog on the internet would not be a wise choice. Rather, I'm writing this post today for those of you who have slapped your head or kicked yourself in the tush because you had a market/trade idea that you let get away from you. Accordingly, I'm putting on my evangelical blogging hat, and I'm knocking at your door--politely and with respect--to evangelize the importance of writing.

One of my favorite authors is Jose Ortega y Gasset. I found this quote which resonated deeply with me, and I wanted to share with you:
"The so-called spirit is an all too ethereal agent, permanently in danger of being lost in the labyrinth of its own infinite possibilities. Thinking is too easy. The mind in its flight rarely meets with resistance. Hence the vital importance for the intellectual of touching concrete objects and of learning discipline in his intercourse with them. . . Without the check of visible and palpable things, the spirit in its high-flown arrogance would be sheer madness. The body is the tutor and the policeman of the spirit."

Jose Ortega y Gasset, Man the Technician (essay)
". . .the vital importance for the intellectual of touching concrete objects and of learning discipline in his intercourse with them"   Is not writing the concretization of thought?  If you find writing agonizing, it is with good reason.  Writing is what ensnares your mind's flights of fancy and imposes order.  Writing forces you to wrestle your ideas to the ground so that they become accessible, practicable and, most importantly, executable.  Your writing is the score of your mind's symphony of ideas.  When it written, it is memorialized and accessible to you for further tweaking.  The process is not meant to be easy.  The process is meant to be discomfiting enough because it forces you to make your thinking productive and actionable.  No longer are your thoughts an ethereal agent.  I would re-write (with great reverence to satisfy my own selfish purposes here), JOyG's last phrase.

      (image above courtesy of Marlen Pens)

I will concede that some of you are tapping your toe and saying "No way!".  You are a minimalist!  You care only about your charts!  Like all over- zealous door-knockers, I have an answer to that objection.  A blog will help you post your charts and document your thinking.  You can use labels that will allow you to post just your trade journal.  You can upload your annotated charts, state your trade criteria and---most importantly--detail your post mortem.   Perhaps your trade is so splendiferous that you want to memorialize it in its own special category.  Add a tag!  By simply clicking on your labels you can easily find all of your splendiferous trades.  For a trade that went woefully awry, memorialize that one too with its own tag. 

The blog serves as an image posting service too.  Rather than posting random images, why not have your images inserted into a blog page (with your notes).  You can share the image easily by clicking on it and posting the http address--you can share the image without sharing your post.  How useful is that?!!

There is one more tool that I want to share with you.  It is ScribeFire (an extension for Firefox and now Google Chrome).  What I like about Scribefire (click on graphic to left to be transported) for Firefox is that it can be used as a split screen.  This split screen allows you to seamlessly add stuff to it that you find on the internet that is interesting to you.  it is easier than bookmarking 'stuff."   Here's a picture

Still not convinced? I will head out your door after leaving you with this one last thought.  If you missed my post on Finding your Inner Genius (Slope of Hope post), I hope that you will take time to read it.  One of the characteristics of the great geniuses is their collective obsession with keeping a notebook with them at all times.  I promise you this:  Many of the great ideas that you have come to you will be lost to the ether IF YOU DON'T WRITE IT DOWN.  The insight part of your brain works when you are not forcing it to work.  Your having pen/paper or some other means of capturing the product of that insight will enable you to integrate into those moments when your brain is in forced labor mode.

Not only must you write stuff down, you will need to revisit your stuff...and revise, refine and revel in your own genius.  You will write stuff so sublime you will hardly recognize it as your own work.  You will also write stuff that will make you wonder how you could have been so stupid.  With your private blog, your private stupidity is yours and yours alone--so there is no risk!

PikeRiver Imagine your brain's thinking as a river. Your ideas a collection of silt and gems. Your writing is your tool for prospecting that great river.  Those jewels you can bring forth to the world to share--or just make them available to your conscious mind.

I will let myself out!  Thanks for letting me evangelize a bit.

Saturday, May 22, 2010

Weekly Sector Update | 05/21/10


An unusual week where all 24 sectors were negative. In the larger list of 147 sectors, there were no positive sectors. An unusual and brutal week if you were long. If you were short, then it was manna from heaven.

You may download the full report here.

I also wanted to point out the sectors that have had a subsequent violation of the February low.

Health Care
Oil & Gas

Monday, May 17, 2010

Lessons in Living

One of the things that I enjoy about flying is that I always meet interesting people. My trip to Las Vegas was no different. In fact, I had two seat mates that were anchoring both ends of the age spectrum and I was squarely in the middle.

From Chicago to Las Vegas, I was sitting beside David. He was an elderly man, 87. He remarkable in every respect. He was a WW2 verteran and retired just two years ago from his marketing firm which he sold to his daughter. His wife is still alive, but her range of activity is limited to a five mile area. He said that she often wishes that she would go to sleep and not wake up. I cautioned that she might be suffering from depression as she also has a chronic disease. He looked at me knowingly and said, "When you get to be a certain age, it is not an unusual desire."

I asked David why he was traveling to Las Vegas. "The Money Show," he answered. David was interested in learning about ETF's. In fact, David was interested in learning about a great many things. He was talking about the courses that he has taken from The Learning Company, and he had one in hand about how the brain worked.

Though physically frail, his mind was very alert and he clearly had much energy.This trip to Las Vegas was one of 90 that he had taken over the years. He had planned his trip carefully. He spent the night at a nearby hotel. He recounted how the couple next door made quite a bit of noise into the wee hours of the night, robbing him of some much needed sleep. He returned the favor by turning up his TV at 4 a.m.! He chuckled at his mischief.

He arranged for a wheel chair to take him to the arrival gate and had one waiting for him at the departure gate. I admired that this man still forged ahead, and I told him so. He then said something that I hope that I carry to my grave--it was something that he said to his wife:

You focus on all the things that you cannot do; I focus on all the things that I still can do.

If that isn't a mantra for living life fully, I don't know what is. I was flattered that he told me, "I thought this was going to be a boring flight--you are interesting." I hope that David enjoyed the Money Show.

Coming back, I sat beside a young woman just beginning her teaching career. She was young, effervescent and hopeful. I forgot her name already--though I'm quite sure that David would not have. But each of them book-ended a very pleasant trip where I had to the opportunity to meet on-line friends. It was also a reminder that our lives are not defined by what we accumulate in our lives, but who we accumulate into our lives and the strength of those relationships. It's a lesson that bears reinforcement, and my trip was a good means to solidify that life lesson.

Sunday, May 16, 2010

Weekly Sector Update: 05/14/10

The market had a bounce last week, with the DJUS Total Stock Market Index advancing 2.74%. There are 148 subsectors. You can easily see the top/bottom performers by going to the WSJ industry page.

Below is a 1 week performance view for the 10 best/worst performing subsectors (industries):

(data courtesy of WSJ).

You can find this information for a number of time periods, and it it updated daily. It's a great way to perform an end of the day review and wrap your head around the market action beneath the indices. I've created a full report of the 148 sectors sorted by weekly performance along with the weekly/daily charts of the 24 broad sectors here. You will need to rotate the chart pages counter clockwise for easy viewing.

My individual charts use a 13/34 period exponential moving average. I'm interested in the relationship of these two lines to each other (e.g. is the 13 moving toward or away from the 34?) and the relationship of price to these two lines. I included thumbnail sketches of all 24 sectors so that you can see all of them at a glance. Stockcharts uses a 20/50 moving average that is not editable in this thumbnail view. The same concept is at work though--short moving averages v. longer moving averages and the price relative to those. Currently all 24 sectors see price action below the 20 period and 8 of the 24 sectors have the 20 day below the 50 day.

Wednesday, May 12, 2010

Leaving Las Vegas

Las Vegas will soon be a terrific memory.

Here's a picture after lunch at Noodles in the Bellagio, yesterday

Never have I been in the company of such handsome, charming, smart and funny guys. It was terrific to meet my blog friends from Slope of Hope. It felt like old friends getting together. I can think of few things in my life where I've been as much anticipatory of "something" and to have that "something" exceed my expectations. This 'something' was a special one indeed as my expectations were exceeded in every way.

I've been informed by my daughter that Macy, our American Bulldog mix, has not moved from the couch and is fixated on the driveway awaiting our return. The departure monitor warns of possible weather delays to Chicago. I'm keeping my fingers crossed, as I'm looking forward to getting home.

Friday, May 07, 2010

Did you feel like this?

I remember the 500 point drop on the Dow a few years ago. That was a harrowing thing to watch. Yesterday at 2:46 p.m., I received a call from a client. I was watching the screen, I said, "The market is crashing as we speak." He graciously asked, "Do you need to go?" I didn't. I have no idea what I would have done, but I watched my SIJ which I hold in size in one account zoom up.

While on the call, I could see the market reverse. SIJ at one one point had both a bid/ask in a couple of pennies of $1.14--it had been trading. Here's a screen shot

Nasdaq has a list of stock trades that will get busted if it occurred within that 2:40 time frame through 3 p.m. You can find the list here.

I leave for Vegas on Sunday to meet Tim Knight, from the Slope of Hope, in addition to other of my on-line friends who are dear to me but who I've never met. Tim's blog was one of my first blog homes several years ago. I had the opportunity to help him out when he was in France. I appreciated that my blog still remains a personal space.

My husband will be accompanying me and he is scouting out some speed-induced thrills. My husband is an avid dirt-bike rider --still at age 54. Our last visit to Las Vegas, he did an 8 hour d-b ride in the dessert with a world class rider, David Dunn. Unfortunately, in looking to do that again, in search for David, I found his obituary. My husband's time with David that day "pegged his fun meter." So, there will be a bittersweet memory there.

I hope that your trading is going well, and that yesterday didn't wig you out too much!

Monday, May 03, 2010

Weekly Sector Report: 04/30/10

Last week was a highly unusual week where all sectors were negative.

However..... in the more granular industries, here is a summary of those that were positive:

I regret that I do not have a chart book for you you on the 24 sectors. I had some technical difficulties with a new program that I'm using, and I'm quite unhappy about it. If you are an intrepid chart viewer, you can find the chart book of the 147 sectors in weekly/daily/monthly format. This report is more research weight, and it is 48mb or so. View it here...if you dare!

You can find the summary 147 sectors here.