Independent courts

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I saw a good report show on CNN the other night, called Broken Government.  The episode was about the recent backlash against the judicial branch.

One of the current US supreme court justices had an intersting response to the question: “Why should we support unelected individuals appointed to this position for life?”:

(Paraphrasing) “It’s still always possible for the majority to gang up on a minority.  That’s the purpose of the judicial ‘check’ on the other branches.”

I find that a compelling answer.  There are definitely examples in US history where this happened, one being the court-ordered desegregation of schools.  Elected officials had fought to keep segregation.  I don’t think you’ll find many people today who would (publically) claim this was a bad move by the courts.

Finding trades with technical analysis

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I get asked a lot what it means to “use technical analysis to find a trade” in the stock market. There are actually many ways to answer that question because there are many ways of using TA as a tool. Here I’ll focus on how I like to use it.

At a minimum I think TA is very useful as the first step in the process of finding a trade by narrowing the field. There are too many stocks out there to manually consider them all, perhaps unless you’re a full-time trader. TA can act as the initial filter, bringing the list of stocks down from say 20,000 to 100 or 10. That’s a much more manageable number.

How does that filtering process work? It’ll be based on applying one or more technical indicators to the stock market. An indicator can be any numerical measurement related to a stock. Example indicators:

  • Price dropped >= 5% today
  • Price below the 50-day moving average
  • Volume is much higher than normal
  • Any of the well-known indicators like MACD, RSI, Bollinger Bands, etc. These are all numerical measurements, often comparing the current price with recent price history

Running any of these on the whole market should return a smaller set of stocks that meet the requirements of the indicator. From this list a trader can evaluate each stock and see why it showed up there. For example, did the price drop by 10% because it’s recent earnings report dropped by 10%? In that case the price adjustment seems fair. Or, maybe the price dropped by 10% because a few other stocks in the same industry showed bad earnings. If this one recently met it’s price target perhaps it was unfairly penalized and will quickly jump back up once people get over their emotional panic about this industry.

The holy grail of most technical analysts would be a a buy and sell “strategy” (combination of indicators and trade timing logic) that’s so reliably successful it can trade on it’s own without human interaction. I’m not sure how many times this has been achieved, or even whether it’s feasible over the long-term, but it’s definitely fun trying to get there.

Trading Blogs

Dayvejohnson on the Markets – Interesting trading log and TA/market commentary.
Wall St. Warrior – Analysis of potential trade ideas.
Trader Mike – Analysis of potential trade ideas and market commentary.

Trading Tools
Market Filters – Runs customized scans on the market based on selections of indicators.
Stock Charts – Very in-depth charts of individual stocks including many indicators.

What if North Korea developed a Space Shuttle?

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In recent months, the President of Iran visited the UN to repeat his claim that Iran wants nuclear power plants more than it wants nuclear weapons. Dependable nuclear power could greatly improve the standard of living for Iranians. But due to its status in the “Axis of Evil”, Iran is denied both. Bush, of course, didn’t attend the UN meeting, but said that Iran can’t be trusted with nuclear technology.

Ostensibly, the US fears that nuclear technology will spread to other countries, a fear that is well founded. As technology advances, it becomes easier for many nations to experiment with or purchase nuclear technologies. It is assumed that not every country will exercise the nuclear self-control that has thusfar prevented WWIII. Eventually, the technology will fall into the “wrong hands”.

This leads me to the natural question, what if the US tried to prevent the proliferation of other technologies? Well, right on cue, Bush attempted to do just that. Various news sources have given their partisan take on this recent memo from the Bush administration regarding the US policy toward space. The important point is the aggressive stance towards other nations.

“United States will … take those actions necessary to protect its space
capabilities; respond to interference; and deny, if necessary, adversaries the use of space capabilities hostile to U.S. national interests

So, what if North Korea or Iran started to develop a space program? Would the Bush administration assume that it was intended for hostile use? Would he threaten them with sanctions? And if so, what message does this send to the rest of the world? That nations are no longer allowed to independently develop nuclear power or space travel without the express written consent of the Bush government? What other technologies does the US claim a monopoly on? Does he really have the authority to oppress technological advancement? And how can Bush claim the US is leading the pack while cutting NASA funding to all but missile defense initiatives?

Is it just election year fear-mongering? Or the tip of a policy iceberg that attempts to maintain US dominance by suppressing the advancement of technology across the globe? I’m afraid the answer to both is yes.

The West vs. Muslims?

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Some people are predicting that the clash of societies visible in much of Europe between “the West” and Muslims will be making it’s way to North America before long. There’s a post on the subject here: As Goes Britain?

The recent news on this front is the controversy caused by the British minister Jack Straw. He’s proposing that Muslim women not wear a veil because it makes dialogue between communities more difficult, or something to that effect. Take off your veils, says Straw.
This is a very tough issue, but to be honest most of what I read by the people of this opinion seem to be discriminating specifically against Muslims. I’d be able to take them more seriously if they were advocating removal of all traditional religious symbols. Examples: crosses, Jewish skullcaps, traditional Catholic school uniforms.

Straw apparently requests that all veils be removed when constituents visit his office. But really, why is this? Is it the fact that he can’t see their face? Does he not talk to people on the telephone or via email? His attitude really seems like “be like us or get out.” Unfortunately that attitude doesn’t work within a liberal democratic society (which most of the “west” is, not confusing that with the liberal/conservative political divide).

I fear this will get worse over time as the worst human instincts come out in response to the conflicts between portions of these civilizations. It isn’t helping that some racists are finding ways to package their ideas in slightly more palatable forms.

What else could go wrong?

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I’d almost feel sorry for the Republicans right now, if they hadn’t done what they had over the past 6 years. It seems everything that could go wrong for them, and even more, is coming true.

But, what I find so interesting is that the GOP will not be absolutely hammered into oblivion in November. The US seems to have such a strange political system at times.

To level-set, let’s try to list off the things that have (fairly) objectively gone wrong for the GOP within the last 6 years. I’m not implying there weren’t wins, but you’ll see my point after the list.

  • The war in Iraq is being lost. Even Bush doesn’t seem to disagree on this any more
  • There are more terrorists fighting against the US now than pre-9/11
  • All the original reasons for going to war in Iraq have proven false and/or falsified. The only one that could still be considered arguable, as an original intention, is to “free the Iraqi people”
  • Afghanistan is deteriorating fairly quickly
  • Failed attempt to reform social security
  • Failed attempt at major legislation on border security
  • Budget surplus has been completely reversed; tax cuts while still increasing even non-defense spending (I haven’t checked the last budget)
  • North Korea now has atomic weapons, after the US pledges it “will not live with a nuclear North Korea”
  • Iran is following the same road as NK
  • The federal government completely screwed up the pre and post-Katrina emergency
  • Huge lobbyist scandal implicating many in Congress
  • Coverup of a pedophile in Congress
  • Executive branch engaging in highly unpopular and likely illegal domestic spying program

Phew. That’s a pretty powerful list. Now, for those of us not from the US, could you imagine any of your national political parties getting re-elected after achieving the goals in the above list? As a Canadian, that seems completely and utterly unthinkable. We completely erased one of the 2 major political parties mostly because we were sick of them after 8 years in power. This party, the Progressive Conservatives, had 2 consecutive majority parliaments, then they didn’t even get enough seats to technically be considered a federal party.

But, in the US, I’d say there’s a good chance the GOP will retain control of Congress in November. Amazing. I don’t know how much is due to incompetence of the Democrats, or side-effects of having a 2-party system. It still blows my mind a bit that the Democrats haven’t put forward a “message.” I remember Howard Dean (who I generally like) on the Daily Show many months ago. Stewart asked him when they’d have their message and Dean said “don’t worry, it’ll be ready for the voters in November.” Did he literally mean November? That’s probably a bit too late…

Technology shaping your world

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There has long been a philosophical debate over the role of technology in our world. Certainly, technology has its benefits. Chemistry puts food on our tables by increasing crop yields. Medicine extends our lives by inspecting, protecting and even repairing our bodies. Modern transportation frees us from geographical limitations.

On the other hand, every technology seems to come at a cost. Cars fill the air with greenhouse gasses. Cell phones threaten us with cancer. Every prescription pill has a variety of side effects. Even when we try to be environmentally friendly, we can’t avoid some costs. Wind-power generation kills birds who migrate along their familiar path only to be chopped up by the spinning blades. We struggle with these tradeoffs.

Take a look at this new technology: Wave power! By using the natural undulation of ocean waves to push fluids back and forth through pipes, a Scottish company will generate enough power to supply 1,500 homes. The only power generating technology that could possibly be any greener would have to be electrodynamic tethers, long cables that pick up static charge as they are dragged through Earth’s magnetic field.

There was a time, in the early days of the Internet, when digital democracy was all the rage. How cool would it be, we asked ourselves, if we could vote anytime, anywhere, on the smallest of issues? We would no longer need to elect representatives! Well, in retrospect, that seems naive. As you can see from this demonstration of how easy it is to hack a Diebold electronic voting machine, paper ballots aren’t necessarily obsolete.

Every day seems to bring some new technology into our midst, so it’s more important than ever to remember that they are just tools. Our world is shaped by how we use them.