Be Unmoved by Moving Averages

First thing this morning before we get into the data of the day, and we walk through the zoo and see how the )political( animals are doing, yada, yada, a reader asked a fine question that deserves some thought.

Do I attach any significance to the market when the 50 week moving average (50 dma) moves below the 10 week moving average (10 dma)?

In a word, no.

But let me tell you why: Humans are drawn like flies to whole numbers, round numbers, even numbers, and lots of other numbers.

So it’s not that moving averages do or don’t help. The most certainly do. However, at the core of our approach over on the side of things, we tend to look at numbers that are derived from data rather than the even number fixated 200, 100, 50, 25, 10, and even 5 day moving averages.

It is a time-consuming task that I don’t want to go through again, but if you’d like to replicate a tiny corner of our work, one simple exercise is get thee over to Yahoo and pick historical data for any stock, index, or whatever, of your choice. Might as well pull 20-50 years of daily data in order to have a decent basis.

Next what you do is set up three columns in the spreadsheet.

Column 1 is the closing price for that day (or week if you’re lazy).

Column 2 is the XX moving average. This is the one where you build the formulae so that you can plug in a single number (lik 13 weeks, and that is only an example because there are four such periods in a year, and because in real-life (IRL) companies report quarterly, yeah?

Then you set up another set of data (Column 3) and you set it so you can have a different moving average period.

Let’s say in this column, we have a 9 month average which means 3 of the quarterlies or 39 weeks.

Then, when the one is above the other, you look on the charts and see which one of your test cases gives you the optimum timing signal.

This isn’t that difficult and it’s pretty easy – when you don’t drink the Kool-Aid with the rest of the crowd to actually find some meaningful insights.

Because you know what?

Americans these days are so effing used to “off the shelf, one-size fits all” solutions, that we gobble up pre-packaged solutions and scarf them down like we were hungry beggars.

We are not – at least around here.

Instead, we praise human inventiveness and hold in extremely high regard a) people who don’t take off the shelf ideas and above them are b) the people who have the sense to ask “Why did they use THAT number…”

Logic isn’t something that is particularly in vogue right now. But when you learn to think through very questioning filters (Why are they doing such and such THAT way…) then you are on the road to being an autonomous human.

Off the shelf works for the thought-limited humans.

Not folks like us.

We derive to thrive.

If you can’t derive for yourself (from raw data like intraday and closing prices and volume) don’t use the indicator because it’s like driving a car without knowing how the engine works.

Oh, sure, you may be able to drive 100,000 miles in it without lifting the hood. But maybe not…and it helps to understand how the car works. Similarly, it helps to look at things like moving averages and such and derivce your own numbers. Once you have some good candidates, paper trade it for a while. As its track record begins to exceed that turned in by the off-the-shelf, you can trade with more confidence.

In the end, like any good journeyman, you will at some point come up with customizations that will make the most possible sense to how you look at news, markets, and the whole conglomeration of Life. And what works for you probably won’t work for me, but it will for you. That’s because everyone’s wiring between the visual cortex and other parts of brain are wired differently by genetics and socialization. You will see that which I don’t and visa versa.

So how do you tell Who’s right? Your bank, trading account balance, and how much you have to send IRS quarterly should be hints.

Meantime, Back at the Zoo

Some home sales data will be out in a couple of hours. Richmond Fed data, too.

On my To-Do list today is another eye doctor visit, surgery Thursday, but when I get back from the eye doc, depending on how things go, I’ll be doing a monthly data overview for Peoplenomics tomorrow. Charts only this Saurday and hopefully in a week or two, I will be able to get off the magnifier tools and be able to drill better again into the fine print.

Playing the market is – in some ways – like reading a financial statement. Lots of people take those and dutifully read the whole thing. Me? I skip right to the Notes to the Financial Statement and read all that fine print because you’ll normally find out more from the Notes than from any other part of it.

Sane thing applies in the week after options. The investing crowd by this time of the month is usually reduced to looking at fine print, too.

Not wanting to upset balance in the Universe, we will do so, as well.

At the Zoo: Wild Idiots

Now, over here, in this part of the zoo, we will look at elephants and jack-asses.

Speaking of the latter: Clinton allies blame Bernie for bad polls.”

Yep, no sneaking anything past these rocket surgeons.

Ostrich Cage

Barrack Obama may be able to read the Constitution, but in terms of remembering much else out of history, we see the workings of the State Department’s Nasty Nest of Neocons at work, building another Ukraine mess with the promises of arms to Vietnam.

He has the audacity to talk about Vietnam’s sovereignty yet we bomb the shit out of Syria?  Doesn’t he get that people can read through bullshit?

As troubling are headlines like “As Obama Presses Vietnam on Rights, Activists Are Barred From Meeting,” This is the “quick, look surprised” part.

Obamas track to ruin America (and set up future wars) is clear in other data, as well…data that the libbies would just as soon scream I was wrong about 4-months ago when I said it was coming, but oh, where are they now?

Pandering to NE liberals, we see media headlines like “Record immigration expected to slow but where were said media hypes…I mean types when it was and is still going on?

Where are the editorial boards voicing outrage at the tolerance policy which fails to enforce existing laws on the books, and where, for heavens sake, is the apology from the libs from getting it so wrong?

The ONLY reason, as I explained months back – is you can’t take people who illegally sneak into America and stick them in a “classification as pending decision” and say they aren’t illegal based on the made-up BS of classification.

That, fellow patriot, is what mush-mindedness is about. If someone hasn’t come in through a border checkpoint, they are what?

Oh…right…silly me.

Unclassified…why of course!

Obama Marketing Muslims

By the way, if you want to skip over the border-runners and people being vetted, the quickest way to infiltrate America is to convert to Islam.

At least that’s one takeaway from the headline “”Of 529 Syrian Refugees Received By US This Month, None Are Christian.”

OK, pop quiz.

Is this good policy or bad president?

(Betcha can’t guess my answer. I’m the guy who LOVE LEGAL IMMIGRANTS who come on their own volition and want to be in History’s Greatest Melting Pot. But people who haven’t been vetted and are running from a war we started…no, thank you. That kind of crooked economic growth we can do without, thank you. During the Great Depression, it was a “chicken in every pot.” Going into our next one, it’s a mosque in every town. Can we skip ahead and roll with some Buddhist immigrants?)

Dems to Run on Wreckord

Latest little twist for the dems to paper-over: “Politics|House to Consider IRS Commissioner’s Impeachment.”

But this is a minor speed bump in articles like Why Hillary Clinton is sinking faster than the Titanic.

And now that the governor of Virginia and ex demo heavy amd Clinton pal is being investigated by the Feds…the wreckage should be all over the field by Election Day.

Gory details in the Washington’s Toast this morning.

Last, but not least, we stop the zoo tour this morning at the primate house.

Here, we see how Bernie is pre-feeding a replay of Chicago in 1968’s convention by forecasting things will be “messy.”

Word for the Day

Yes, just like the unkempt day at the zoo, our Nostracodeus scan of the news tells us the meme—word of the day is Mess.

It runs from Shasta Lake to Madonna to Bernie, with other stops along the way. Here’s the search you can run without our code.


It’s what the world is this morning…


If you disagree with our assessment, go ahead and use the comment section, although these are human moderated.

Just remember, if you don’t already know it, much of what you think has been pre-programmed by social media and some very ugly social engineers including some who work for your government.

And our tip of the iceberg story for the day is “Facebook admits rogue employees may have shown bias .”

And I would bet a nickel on the side our own government is social engineering and may have even had a hand in building ISIS from the ground up.  You never know where rogue goes.

Or, did you forget the story from 10-years back about how the government was looking for “identity management software” so govt tools could be govt trolls?

More Recent Flashback: I’m not so worried about the “Top 14 Government Social Media Initiatives Government Social Media Initiatives” even though it is thought control and lobbying…

It’s the off-books apps we don’t know about that scare me. Government seems to have gone down the path of thought control whether you like the idea, or not.

Would Orwell have had a social media account?  Kafka?


Be Unmoved by Moving Averages — 21 Comments

  1. “Me? I skip right to the Notes to the Financial Statement and read all that fine print because you’ll normally find out more from the Notes than from any other part of it.”

    Funny you should mention that. Here lately, I have been skipping right to the comments section on a few of the websites I read. Unfortunately, can’t do it on most sites though, with all the trolls roaming about.

    • I also, tend to get to the meat of the matter, and get right into the comments sections. Therein lies most of the essential dissection of Georges’ thought train and exposes who, for the most part, care for his or his followers’ opinions?

  2. Obama selling arms to Vietnam. What’s the surprise? Every thing is a Business Model. He is working assiduously for his employers.

  3. Geo. At Club Med vacation. Mostly Europeans. Of that, mostly French. Very nice about our breaking the Middle East, and causing their immigration and terrorism problems. And our dissing them when they tried to warn us. Didn’t even bring up the Freedom Fry nonsense either. Mike.

  4. You wrote: “Can we skip ahead and roll with some Buddhist immigrants?”

    Relax, George, Buddhists are not going to try to convert you or blow up your farm.

  5. I hate it when stories are linked to The Washington Post, and I can’t read them because I have already read my “quota” for the month of free stories.

  6. I am convinced that the influx of immigrants is partly a Corporate policy. Americans just aren’t buying enough consumer crap anymore (a combination of they already have it or aren’t being paid like they used to), so we need to import more poor immigrants with large families to take up the slack.

    Unfortunately the immigrants are largely Muslim who have an ideology that seeks to overcome all infidels and impose their 7th Century religious views on everyone.

    • Of course it is but the policy wonks think they will keep consuming forever: but once the initial cycle ends the vast majority will be on welfare. A man with 3 wives will have 24 children a citizen of this country will have about 1.8 – that spells game over………you’ll be hearing a lot in the future about a guaranteed “livable” wage – it is of course more nonsense. Anyway that’s the way I see it……

  7. Love to know just how much money the neocons at the Pentagon make for selling arms to other countries/factions. Maybe I should ask how much do US based private enterprises make for selling arms and the kickbacks that line the generals and higher officer ranks pockets?

  8. George – you are still stuck in the Bread n’ Circus of democrats v. republicans. The differences between the parties is just show n’ tell for the proletariat. Politicians come and go, but the PTB and their interests remain no matter who is in office.

  9. “Just remember, if you don’t already know it, much of what you think has been pre-programmed by social media and some very ugly social engineers including some who work for your government.”
    However, is not 99% of all motivated by individual’s self interest? (That applies from the President on down to the homeless folks that frequent the streets of NYC.) IMHO!

  10. Back to basics Stupid is as stupid does, AKA as US Government, at this time there is no known cure.

  11. For those who think the oil industry is unaware of Peak Oil…

    I put this out here as my small firm has 5 customers. Bankers are refusing to renew loans at this point, and this morning a bank in Oklahoma City foreclosed on one of my customers – I will never be paid for the work I did for them.

    Another is going to his investor requesting a 2nd extension on debt repayment. I expect him to be denied as well, meaning further unpaid invoices. These all roll downhill onto my balance sheets.

    And FWIW, I am NOT a millionaire – just a guy making a small living, enough to pay my debts. But this curtails anything for me and mine except to look at other options to generate cash to live on.

    • Thanks Oilman2,
      Ive always looked for a “ground zero”, so to speak. Maybe time to off-load the fancy truck.

  12. G –

    I have just one of my 4 kids that has retreated from social media. As he (24 yrs old) told me, “It’s weird Dad, but as soon as you get out of that sh*t, it’s like it never was. All the FB friends have my number, but zero texted or called me after my being gone for 3 weeks. I don’t go into Tractor Supply for a week and the cashier is asking me if everything is ok because she hasn’t seen me in her store.”

    I’m not sure what Facebook replaces or makes better, as I never joined it or Linked In or any other online social club. I do know that it is such a huge tool and focus for the entire surveillance apparatus that if people just bailed out of them, the intelligence services would be left holding their puds.

    I guess the other end of this problem is when TV or print media is covering things in social media, it is media covering media, and frankly that is amazingly circular and effed up. Too many eyeballs and not enough news??

    • LOVE the Tractor Supply in Monroe – super helpful staff, huge clean store, lot of ‘stuff’ on the shelves!

  13. “You have to wonder how any statistics are real when the arrest records of “Mexicans are listed as white nationality.This came out a year ago,both Highway patrol and local Police were doing it.There is a weekly magazine (or use to be) called “Busted”showing mug shots of people arrested-what they were arrested for,name age nationality all the Mexicans were listed as whites for several years.How does one make such a mistake? How do you describe a crime scene? Open Hide?

  14. So Obama chides Vietnam, then turns and wants to sell them advanced arms. Some great logic going on there! It’s ok…it’s all crazy. Our problem is that we expect things to make sense!

    • As soon as you recognize that our President and congress are not working for you; that they are nothing more than the CEO and board of the US Division of Global, Inc…

      Then things start to make more sense.

      WE are not their concern. They are selling our asses down the river to further the goals of the UN and seek to increase their personal wealth and power therein.

    • Note that corresponds with russia moving back into its naval base there. These neo cons/liberals really seem to hate russia