Fodder for the Blame Game

Do not believe the current narrative. This impassioned piece by Clive Crook from Bloomberg tells you why.

Excerpt:

[...] Far from expressing any desire to compromise, dominant voices among the creditors -- notably German Finance Minister Wolfgang Schaeuble, who often seemed to be calling the shots -- have maintained throughout that there is nothing to discuss. The program already in place had to be completed, and that was that.
Yes, the program had failed. No, it wouldn't achieve debt sustainability. Absolutely, it was pointlessly grinding down Greek living standards even further. What did that have to do with it? [...]

The Tao of Intellectual Honesty

Forget for a moment the author of this excellent piece of advice for those seeking to be as intellectually honest as they can and just add it to your curating toolbox for everyday reading.

Excerpt:

[...]The first line of defense, I’d argue, is to always be suspicious of people telling you what you want to hear. 

Thus, if you’re a conservative opposed to a stronger safety net, you should be extra skeptical about claims that health reform is about to crash and burn, especially coming from people who made the same prediction last year and the year before (Obamacare derp runs almost as deep as inflation derp). 

But if you’re a liberal who believes that we should reduce inequality, you should similarly be cautious about studies purporting to show that inequality is responsible for many of our economic ills, from slow growth to financial instability. Those studies might be correct — the fact is that there’s less derp on America’s left than there is on the right — but you nonetheless need to fight the temptation to let political convenience dictate your beliefs.[...]

A Shrill (But Oh So True) Take On Supplements

Timothy Egan is one of my favorite New York Times Op-Ed writers and I have rarely seen him this exercised, this eloquent and this right. Here's a little taste:

If you want to know how we came to be a nation where everyone is a doctor, sound science is vilified and seemingly smart people distrust vaccinations, come to Utah — whose state flower should be St. John’s wort. Here, the nexus of quack pharma and industry-owned politicians has produced quite a windfall: nearly one in four dollars in the supplement market passes though this state.

A Fusion-Based Bullish View of the USDJPY Cross

I, as my previous work can attest to, am primarily a technical analyst. I would also have no problem being called a fusion analyst, i.e. someone who tries to inform his technical analysis with fundamental analysis as well as sentiment analysis (which some purists see falling under the purview of technical analysis too).

All this to say that I am not above using some fundamental viewpoints as contrarian indices to reinforce some of my technical opinions. Case in point: this Saxo Group TradingFloor.com analysis of the JPY.

Using a somewhat questionable analogy to the Swiss National Bank, Max McKegg buttresses his bullish view of the JPY (therefore a bearish view of, among other crosses, the USDJPY). I venture to use this view as a misguided fundamental analysis of the situation and venture further that, being quite widespread in the trading community and going against the technical picture as I see it, it constitutes a potent contrarian indicator IN FAVOR of a continued STRENGTH of the USDJPY Cross.

A Stoic's Stand Against Abusive Comments

New York Times' opinion writer David Brooks and I aren't exactly politically close, to put it mildly.

Which makes the opinion pieces that come out of his perceptive pen with which I wholeheartedly agree all the more precious. His latest is a stoic piece on how to intelligently deal with the comment section to his pieces - a good portion of which is probably filled with hatred, blind harassment or just plainly wrong statements - and it is one of his most brilliant. A few excepts:

It’s not only newspaper columnists who face this kind of problem. Everybody who is on the Internet is subject to insult, trolling, hating and cruelty. Most of these online assaults are dominance plays. They are attempts by the insulter to assert his or her own superior status through displays of gratuitous cruelty toward a target.

The natural but worst way to respond is to enter into the logic of this status contest. If he puffs himself up, you puff yourself up. But if you do this you put yourself and your own status at center stage. You enter a cycle of keyboard vengeance. You end up with a painfully distended ego, forever in danger, needing to assert itself, and sensitive to slights.

Clearly, the best way to respond is to step out of the game. It’s to get out of the status competition. Enmity is a nasty frame of mind. Pride is painful. The person who can quiet the self can see the world clearly, can learn the subject and master the situation.

Corporate Logic vs. Macroeconomics

Paul Krugman, a boogeyman for most conservatives, is nonetheless an Economics Nobel Laureate and knows a thing or two about his specialty, macroeconomics and how what is logical in microeconomics is not so in macroeconomics.

This is probably his (I'm making this number up but you get my drift) 1,187th post about the simple (and yet so hard to understand for so many people) fact that what works for a corporation (or a small business) does not work for a country as a whole (especially for one as big and interconnected as the U.S.):

About that bad advice: Think of the hugely wealthy money managers
who warned Ben Bernanke that the Fed’s efforts to boost the economy
risked “currency debasement”; think of the many corporate chieftains who
solemnly declared that budget deficits were the biggest threat facing
America, and that fixing the debt would cause growth to soar. In Japan,
business leaders played an important role in the fiscal mistakes that have
undermined recent policy success, calling for a tax hike that caused growth
to stall earlier this year, and a second tax hike next year that would be an
even worse error. 

And on the other side, the past few years have seen repeated vindication
for policy makers who have never met a payroll, but do know a lot about
economic theory and history. The Federal Reserve and the Bank of England
have navigated their way through a once-in-three-generations economic
crisis under the leadership of former college professors — Ben Bernanke,
Janet Yellen and Mervyn King — who, among other things, had the courage
to defy all those tycoons demanding that they stop printing money. The
European Central Bank brought the euro back from the brink of collapse
under the leadership of Mario Draghi, who spent the bulk of his career in
academia and public service.

I know I haven't been very loquacious these past few months (years) as far as my blog goes - my excuses ranging from "too busy trading" to "what's the point?" - but...just saying: come on people, this is not rocket science. Not only that, but aren't these past 6 years proof enough? Isn't it time for some people to admit they were, if not totally wrong (that would be too much to ask), then at least, let's say, slightly mistaken?

A Technical Analyst's Dream of a Times Article

Courtesy of the New York Times, a concentrated fount of TA trivia about the last 20 years in the stock market. A little taste:

While taking 16.6 years to double seems awfully slow, it took 17.4 years to go from the first close over 100, in 1968, to the first one over 200, in 1985. A significant bear market in the 1970s intervened. And it took more than 29 years to go from the first close over 25, in 1929, to the first one over 50, in 1958. That period included the Great Depression.

What Say You, Mr. Market? (the Early 2014 Edition)

It is way past time we took a little technical look at the market.

While laziness has certainly played a role in my not having updated my last post on the subject in over 6 months, another reason (or excuse if you will) is that, despite the ups and downs (mainly ups) of the market, the many scary dramas (Russian roulette with the debt ceiling culminating with the government shutdown, the Syrian crisis, etc...), the key personnel changes (Janet Yellen's taking over of the Fed being the most notable) and other news-related or corporate developments, things have not changed from a Technical Analysis viewpoint.

Which is to say, we are still in the midst of a Bull market that started in March 2009, and nothing that has transpired to this date would suggest otherwise. While I am not a Technical Analysis absolutist in that I do not believe TA is the ultimate predictive model, I feel it is an excellent descriptive one. I am also obligated to add the disclaimer that what was true at the end of last month may be wrong at the end of the current one. In other words, markets evolve (sometimes much faster than others) and therefore, so do outlooks.

To make my point and for the sake of continuity, I will use, once again, the 20-year monthly chart of the Dow Jones Industrial Average with only one technical indicator (Bollinger Bands with the default 20-period/2-standard-deviation setting). The chart (which is basically a moving 20-year window) will this time be covering the 02/28/1994 to 02/28/2014 period (click chart to enlarge):

To Be Continued...