Wednesday, November 25, 2015
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Curious Thoughts

Russian Athletic Program Under Fire


This is not cool–the western world will not stop messing with Russia.  Our latest attempt to alienate and dehumanize The Federation is to sick the World Anti-Doping Association on their state athletics department.  Now this nark agency is trying to kick Russia out of next summer’s Olympics down in Rio.

The associations founding president and co-author of the report, Dick Pound, went so far as saying, “This is an old attitude from the Cold War days,” during a news conference according to The New York Times.

Apparently the economic sanctions are not enough.  We must to demoralize mother Russia by kicking them out of sports; one of the things these people are really fucking good at.

The markets are already behaving odd.  Like what was that bitcoin surge last week all about?

The media loves this doping claim.  It is one more hit piece for them to run against the savage Russians.

The western world is ostracizing Russian sports while you play lazy American fantasy football and gamble your family’s savings being a sofa coach on Draft King.  Turn off your damn sports channels for two minutes and focus on something else.

I hope this whole fiasco goes away.  Sometimes I watch too much Vice and think the world is about to end.  Just last Saturday I finally watch their season finale (Cold War 2.0) then some jackass Canadian named Dick Pounder goes after Russian sports.  FML



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I Killed A Badger Once


The markets are in slow motion.  Pull up a chair because I have a troubling story to tell. Dachshunds are vicious little monsters. They were bred by Nazis for killing ground varmint. The quality of a dachshund is determined by their body-to-foot ratio, how smooth their coat, and the length of their ‘flag’.

The schnitzel-eating Germans call a dachshund tail a flag because these dogs are designed to go into a hole and latch onto varmint.  At this point you grab the dog by the tail and pull her and marmot or whatever out.  The better the flag, the easier it’s seen and able to be grabbed.

Anyhow I love these dogs, and my modern dachshund Momo is no killer:


One cold morning, just after buying my house I came outside to a raucous.  Bruno (the uglier of the two dogs above) was going insane and Momo was eye-to-eye with a badger twice her size.  Some deep canine instinct convinced my dog she could take out this massive creature.  I had to intervene, otherwise I would be left with thousands of dollars in vet bills or worse, a dead dog.

Long story short I grabbed a steel rake and bashed the badgers skull in, rake tongs first.  It was horrible.  The poor thing’s tail spun in circles like a helicopter for 10 seconds (it felt like 10 years).  It was the worst act I have ever commited.  I’m not a killer.  I hate killing and lately I’m finding it difficult to eat meat.

This is why I know I cannot hunt.  Every year my friends ask to me join them on their murderous hunting campaigns.  I would rather eat grass then hunt my own food.

I gave the badger a proper Italian burial.  I wrapped the carcass in cheese cloth soaked with extra virgin olive oil (squeezed by the nuns of Tuscany) before lowering the body into a deep hole.  His little body rests beside my grape vines now.  The dogs were fine.  Actually, I think they liked the whole event.  They are nasty little fuckers.


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The market now appears fixated upon roasting longs ahead of Apple earnings this afternoon and an FOMC rate decision tomorrow.

Transports are on a nose dive. Oil stocks are back in the furnace. The NASDAQ is flat and entirely hinged on Apple. The Russell is probing the low end of its range.  Breadth is in the toilet.

My book is completely lit aflame and I am reminded why I should not pick stocks but instead GARP on dips by pressing one stupid button like a drunken chimp.

The largest holdings in my book are doing okay but one will report tonight and could effortlessly castrate me three ways to Sunday. The bird, a company ran by vultures. Meanwhile diversified plays like GEM and CNCR are holding up. I may just rotate into these hip new ETFs and focus entirely on picking off NASDAQ levels for less handles and more size.

It never feels like too many moving parts until they are turn against you. With unknown forces just beyond the horizon I am raising some cash to deploy elsewhere. Before doing anything, I think I will enjoy a hot beverage and some crisp autumn air.

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Brain Books


IMG_3250Over the weekend I discussed some of the biggest hurdles in trading with a few of the conference attendees, and I paid particularly close attention to emotional (irrational) decision making.

Having a trading plan is great but sticking to it will make the difference between making the turn to consistent profitability verses conceding your fate to the latest indicator or guru.

It is extremely unlikely you have the resources to influence the market you are trading. There is no way you can control the collective behavior of other participants. That is why it makes no sense to worry about the why behind market behavior. Your energy can be better expended cultivating your own mind.

They are learning so much about the brain these days and tons of research and books are written on the topic. Here are a few books I have found valuable so far. These are links to Amazon and if you buy a book directly from these blue hyperlinks I will make like fifty cents:

Mindfulness: An Eight Week Plan for Finding Peace in a Frantic World – Into to meditation.  It gets a little hippy dippy at times but overall solid.

As A Man Thinketh – This book is old.  You can read it in a single morning.  Can be slightly off putting at times with Jesus talk, but it is limited.

Mans Search for Meaning – This is about surviving inside Auschwitz.  It will put all your first world problems into perspective.

Switch: How to change when change is hard – Lots of good case studies and research.  It was a hard read for my ADD.  I recommend the audio book for this one.

Ubiquity: Why Catastrophes Happen – More about the omnipotent presence of extreme outlying events.  Great for preventing being stubborn, especially when an indicator or signal keeps being wrong.

bird by bird – I bought this one to improve my writing but along the way my mind was expanded.  Check it out.

Meditations – Random applications of stoic and Aristotelian philosophy by Marcus Aurelius aka the last great emperor or Rome.  This translation is considered the cleanest and most actionable.  These ancient writings are older than the Bible.

The Art of Learning – This is written by the boy genius chess player who went on to become a world champion in fucking jujitsu.  Really solid stuff.

The Chimp Paradox – Get to know your inner cave man; the idiot who wants to smash computers with his fist, and how he may not be very useful in modern society.  In Switch (above) they call it the elephant.  Great pair of books to read together.

Bhagavad Gita – Another set of writings predating the holy Bible.  This one pairs well with a small dose of LSD (I do not advocate breaking laws).

The Legend of Bagger Vance – I linked to the movie.  Save time, just watch the movie it does a pretty good job as long as you can stomach a Matt Damon performance.

Gita on The Green - This is something.  After you realize Bhagavad Gita is super confusing and you have watched Bagger Vance, this book ties to the two together in an epic way.  Great for you golfing types.

The Psychedelic Explorers Guide – If you even remotely took my LSD recommendation serious, read this book first (and do not break any laws).

The Nature of Things – More ancient philosophy.

Sophies World – If philosophy is not your thing, read this lovely fiction instead.  This is one of the best selling books ever and translated into 100s of languages.

The Power of Habit – Another book with lots of great case studies and research.  Definitely top 3 in usefulness and application to trading.  I love the part about scripting critical moments.

The Obstacle Is The Way – Ryan Holiday is probably younger then you and has accomplished incredible things.  He is also a modern day stoic.  This one is tough loving and more effective then coffee for waking you ass up.

Those are all the books I have worked through so far.  Some  I read halfway then shelved for now.  Others (like Meditations) I read over-and-over.  Has a book improved your trading or outlook on life?  Please, share it below.  I need more!

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The Afternoon Ramps Will Continue Until Morale Improves


Even today, after a long week of nudging higher, the system managed an impressive afternoon rally.  These ‘events’ have been happening with increased frequency.  Seven out of the last eight sessions have seen an afternoon buying spree at the NASDAQ barter and exchange.

Amateurs trade the open, pros the close.  This is another useless trading axiom.  However, a strong close does wonders for improving the mood–especially heading into the weekend.

I’m headed into the weekend with a chest full of bravado, a pocket full of pesos, and a penchant for risk.  What could go wrong?


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Shorting A Slow Tape Is Trouble


September was a great month for selling the market short.  Even for my intraday gaming—the speed left lots of room for me to be in-and-out, capturing 6-10 NASDAQS at a time, in a matter of minutes.

The general uneasiness that speed creates also gave me conviction to press a position short in BIS.  I barely got the position on since it never pulled into my wheelhouse.  I do a few things well.  One is always treating news driven moves the same.  The biotech move lower was triggered by a Hillary tweet.

Pop Quiz: What is our expectation on news driven moves?

A. Expect price to return to the ‘scene of the crime’

B. Kiss the level goodbye

Once tape speed left and my morning report forecasted chop, I lost my conviction in the BIS trade.  Then I had Exodus flagging oversold, constructive conversations with the 12631 crew on the bull case, and lots of buy programs hitting the NASDAQ.  I objectively cut my starter BIS position.

Finally, I wanted to make a note about the extreme NYSE tick reading we had today at 1:12pm.  This tick classifies as a ‘party pooper’ signal meaning, per my observations, they happen at or near the end of a move.  The market is behaving much differently than I have seen over the last few quarters, so I am skeptical of calling a top here.

That, and after going on a wicked winning streak, Rose Colored sunglasses has take two hits.  Such is the nature of an 87% win rate.  Even a win rate that high has a statistical draw down period.  There’s no sense it trashing the model because of this.  But, it may be whispering about a change in character developing in the market.

Sometimes a signal not working tells us something too.

I know this post is a hodge-podge of thoughts.  I am weary, but this is all important, thanks for sticking around.  The answer to the pop quiz is A.


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Busy: Inundated By The Optimates and Populars


I was all over the NASDAQ this morning. Equipped with a primary hypothesis and a wavering short bias, I trounced the morning high ticks like a caveman chock-full of pre workout.  When I was done bashing the brains of early buyers in, my decisiveness was gone.

For the rest of the day I was a leaf blowing in the wind.  Even the most rudimentary task, like ordering lunch, would flicker in-and-out of my brain like the ass of a lightning bug.  Everything is taking exponentially longer than normal.

So I fully turned my attention to civic duties.  I am responsible with dolling out free samples of Exodus to the plebian reader class.  Fine, it is a noble undertaking, to grant unfettered access to our market intelligence platform (email if you want a trial).  Yet even during this repetitive task my brain would wander away, like a stubborn donkey.

You cannot whip a stubborn donkey into compliance.  And you certainly can’t trade without a cooperative donkey.  Actually, you can trade, but in 3 minute intervals your account will be chipped away, failure, failure, failure—done.  I used to do that all the time.  Now, and budda willing it sticks, I can see when my mind goes AWOL and just pack up my robots and do something else.

This also meant putting words together to make a blog was harder than taking the SAT.  Do you see what is happening here? Did you make it this far.  I’m sorry if you did.  I have nothing to offer.  I’m just grateful I made money before the affliction hit.

Just take two free trials of Exodus and call me in the morning.

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I don’t fuss around with the futures too much on Friday.  I have reams of stats that show me plundering away my own gains on Friday afternoons.  It takes some color out of the weekend, and who likes that?

Anyhow, I worked the primary hypo from this morning’s report, see below:

Heading into today, my primary expectation is for a slow tape.  Look for sellers to work into the overnight inventory and close the gap down to 4345.  Look for buyers to defend north of 4330 then make a move to target overnight high 4357.75.  This sets up the gap fill up to 4366.25.  Stretch target is 4370.

I can’t really envision any better than that.

I will take my stipend and focus my energy elsewhere.  What’s on your radar heading into next week?  Should I buy some small bombs because the Russell is a beast? Or should I buy the new Goldman Sachs emerging market ETF and chill?

Either way, I’ll be listening to this album cover-to-cover:


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With Costolo Stepping Down, Investors Will Go Back To Debating This 1 Simple Question


I never understood the contempt for Dick Costolo. He always seems super friendly, which is surprising because he receives a quarterly tirade from my friend. It takes him like 6 tweets because of the asinine 140 character limit Twitter imposes. I find the character limit drives me to truncate my thoughts and separate the chaff. My friend on the other hand just tweet bombs like a madman.

Nevertheless Costolo is out and investors must now attempt to value the vessel and not the captain.

Never discount the value of an interaction. Each one carries an opportunity, which we as humans naturally attempt to evaluate.

What is the value of an interaction?

I’m afraid it’s a too big a question for me. Such a question demands a scientific process with the least amount of assumptions possible. Presented with the right data I am certain any one of you would choose the right answer.

Bear in mind, even the most formidable vessel will wander the seas aimlessly if driven without vision. It’s a shame Twitter can’t be more like iBankCoin, where investors unite the golden coin—stock market excellence.

The growing ranks of Exodus members have made profound strides in operating the new system and are empowering not only themselves but others with their insightful commentary. It’s quite the sight to behold.

If you haven’t taken a look inside the walls of Exodus, do it now. I’ll be your personal guide—just send me an email Better yet, HMU on Twitter @twosmuth, they need you to tweet more, dammit.

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How Mutual Fund Monday Looks When Money Flows into RISK

The Nasdaq 100 index houses the absolute finest in growth and risk stocks.  It includes the largest domestic and international non-financial securities listen on The Nasdaq Stock Market based on market capitalization.  Some of the big dogs are AAPL, FB, AMZN, BIDU, CSCO, MSFT, CMCSA, GILD, GMCR, QCOM, INTC, and YHOO.  For the full list of symbols involved, check out the link below:

This index has some shades of value stocks in it, but for the most part these are massive, promising, growth companies.  When money flows into the index it suggests our market participants has a taste for popular, big timer, growth.  We could expect the lazy mutual fund managers to put down their cheese platters and stop schmoozing for a few minutes to enter their fresh AUM (assets under management) into the market at the start of the month, and as traders we sit around eagerly searching for these gluttonous flows of money.  The last few months they have been sort of weak, perhaps because people are either pulling some money away from the markets or not contributing their average allotment.

However, Thursday morning a huge unknown was removed from the market.  Everyone worries about the Euro-Zone and usually we make a big story about their odd economy.  However, they are taking the path of the United States, the path of free money and it has become very normal, almost an expectation of participants.  These actions are what EVERYONE is watching, and MOST OF THE TIME they lead to higher equity prices.  The employment data on Friday was a cherry on top, by no means a necessary to persuading the money into the market.

Anyhow, that is my view of the current investment conditions.  This is speculation based upon what I hear people who I consider wise to the game focusing most intently upon.  I like to focus intently on the auction.  And without further adieu, I want to show you what a strong auction with fresh buyers coming into the marketplace looks like.  See below:


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