Markets and psychology

This post covers a topic of interest to me, the stock market. I mentioned in a previous post, driving with the rearview mirror, about some basic concepts of the stock market. Several months have passed since my last market posting. Accordingly, I have been studying and stock trading resulting in both failure and success. The more I watch the market, the easier it is to understand that investor psychology drives the market.

One technique that I am studying is Elliot wave principle (EWP) developed in the 1930's by Ralph Nelson Elliot. Elliot observed that markets move in 5 distinct sets of waves according to prevalent market psychology. When in a bull market, impulse waves move the market up. In a bear market, impulse waves move it down. Waves 1, 3 and 5 are the impulse waves, while 2 and 4 are the corrective waves. Impulse waves are further subdivided into smaller sets of 5 fractal waves. Corrective waves have an a-b-c wedge like pattern and are also subdivided into smaller waves. The time span of the waves are from decades to hours on ticker charts. To be honest, the larger waves on the order of days (Minute) up to years (Primary) follow this pattern making distinctive patterns on ticker charts. Time spans greater than several years and less than several days tend not to fit into exact scenarios. It is just wishful thinking putting noisy or irrelevant data into such a pattern in my opinion. The take home message is Elliot wave principle follows what truly drives a market, investor sentiment.

Elliot wave principle is a loose theory, it has multiple outcomes during any given situation. Market timing and wave amplitudes are based upon Fibonacci numbers. Exact values fit into a range. Here is where EWP is useful, it tells us approximately when the market will turn and to the approximate degree a rally or sell-off will carry a market. It determines buying or selling windows ahead of time. I suggest using other technical indicators (MACD, stochastic and etc.) as complimentary tools when waves are not clear, which often waves are unclear. Investigation of the stock's price movement (who owns it and why) will further help an investor.

In practical application, I believe as of February 9, 2010 we are in a bear market at the following point in a Cycle. This means the overall market movement is downward.
Primary = 1 of 3
Intermediate = 1 of 5
Minor = 2 of 3
Minute (not sure)
Using this, I made a successful and unsuccessful trade. The unsuccessful trade occurred because of undesired price movement premarket. My blunder even as the stock moved in the desired predicted direction. This is why the system is not going to make anyone rich without following good trading practices.

I will post further on this topic to see if my evaluation and Elliot wave principle holds true.

Dr. Coffee blog's updates

This post is a continuation from two past posts with new observations. Both topics are on human health and diet.

First update stems from the previous post Supplementing what? in which I warn about the dangers of long term strict veganism. This weekend, I had the luck of meeting an individual who became a Vegan within the last couple of weeks after being a practicing lacto-ovo vegetarian for about a year. It was a sight to see. She was about 10-15 pounds underweight. Her complexion was similar to a ghost, pale white. She is obviously intelligent, but the mental sharpness was not present. This on top of being sick with a cold or flu. Her friend (she was also present) who just started practicing veganism (same time) after being lacto-ovo vegetarian even longer was in the same physical state. I wish both of them would realize they are destroying their own healths'. It seems that these extreme vegetarian types have a cult like following. This trend is very disheartening in the least.

One argument that I read from a vegan propaganda publication this past week concerned the actress Alicia Silverstone. Her source of Vitamin B12 comes from Miso soup. I was not aware of this vitamin source, but I rather doubt the concentration is enough to fulfill an individual's daily requirement without eating several bowls of the soup. This is the very basic problem with veganism. Yes, you can find these necessary vitamins in certain vegan approved sources, but they will not provide enough of the vitamins to an individual for healthy living. I repeat once again, healthy, long term, strict vegan adherents do NOT exist. It is a dangerous lifestyle. One other quirky thing about the article was her description of feeling holistic (??????). I am coming to the conclusion that this general "feeling" comes from a lack of energy and mild hallucinations. Yeah, you feel holy, but what is it really?

The other update is on my own health and is a follow up to the post, Give me a D, Vitamin D, where I discuss a potential Vitamin D deficiency in my own diet during winter. I would my overall feeling as constantly tired even though I am not sick and been sleeping quite well. After taking about 2000 IUs of Vitamin D from store bought vitamins, I felt better the following day. After one week of the supplements, I felt back to normal or similar to summertime. My guess was right, I was lacking Vitamin D in my diet and it was manifesting itself as symptoms similar to Chronic Fatigue Syndrome. From now on, I am going to start taking lower doses (~800 IUs) starting in November to prevent this problem from hitting me in the middle of winter again. I am sure this is a very common problem in our modern society that lives indoors during daylight winter hours because of employment.

Stealth operations

This post is about the long awaited Russian military aircraft technology response, Sukhoi T-50, to the US F-22 Raptor. For those who do not keep up with fighter aircraft, the F-22 is America's top of the line fighter aircraft being referred to as the only operational 5th generation fighter currently in existence. The other US 5th generation fighter is the F-35 Lightning II planned for delivery later this year. In a nutshell, these aircraft have all of the latest developments in avionics, materials, engines, and electronics integrated into an advanced system. Once distinction of the next generation aircraft is stealth technology or the ability to evade most radars. 5th generation aircraft have a significant advantage during combat over older 4th generation and earlier fighters.

The Sukhoi T-50 is a product of the once proud Russian military industrial complex under the Soviets that easily kept up with the Western bloc countries until communism fell in 1991. Now, the Russian arms producers are just a remnant of their former greatness. It partially explains why it took so long to produce the initial prototype. It appears as if the plane has a long way to go before actually combat readiness.

Russian Prime Minister Vladimir Putin hailed the flight as a "big step forward," but admitted that "a lot remains to be done in terms of engines and armament."

Reading further into the article, it appears the new technology is NOT a significant change from the prior generation of aircraft.

The NPO Saturn company said in a statement that the jet has new engines, but military analysts suggested that they were a slightly modernized version of the Soviet-era engine powering the Su-27 family of fighters.

"It's a humbug," said independent military analyst Pavel Felgenhauer. "It's just a prototype lacking new engines and a new radar. It takes new materials to build a fifth-generation fighter, and Russia lacks them."

It appears as if this new plane is an upgrade for the Russian military and not really a true 5th generation fighter. In the end, I think Russia may have it right in improving upon their tried and true technology into better weapons. In contrast, the US spent tens of billions of dollars to build a complete new weapon without a defined military need or combat role.

Give me a D, Vitamin D

This blog was originally intended to cover science and technology, but it has grown to cover other topics related to this area. I have been writing several posts on nutrition and health since it is of interest to everyone. This post will be about a very important vitamin, Vitamin D. What differentiates this vitamin from the rest is the main source is not from our diets, but from sunlight exposure. It turns out the wavelength range in sunlight that produces Vitamin D in our skin, UVB radiation at 295-300 nm, is the same radiation that causes skin cancer. This supports the statement, "moderation in all things." As for dietary sources, the only concentrated natural vitamin D sources are seafood based. It appears in much lower doses within egg yolks. Vitamin D is routinely added to the US milk supply to prevent the deficiency in Americans which was first observed in the 1920's as the disease rickets in the general population. Rickets mostly vanished in the US after the fortification program started.

What inspired me to discuss this topic is evidence exists that Vitamin D deficiency may lead to chronic fatigue or even potentially Chronic Fatigue Syndrome. What I have noticed in the last few days is feeling tired with no real purpose. My diet was good. I exercised regularly. My sleep was high quality with about 7 hours on the weekdays and 8+ on the weekends. Why do I feel sluggish all of the time? Thinking about it, this is how I always feel since living in Texas from mid-January to mid-March. Going further back, it is the same sensation that I felt in the gloomy Oregon winter with no sunshine. Fast forward to the present, we have had lots of cloudy days and little sunshine in the last few weeks. Due to my indoor work environment, when it was sunny I did not get any sunlight exposure outdoors. That is when it hit me, I might have Vitamin D deficiency. To battle this affliction, I am taking a multivitamin (400 IU dose), eating tuna fish sandwiches at lunch and taking 10 minute walks in the sun at around noon when possible. The regiment might also have some Vitamin D supplements added. I will update my rehabilitation progress after about a week.