Compare with the "Pros"

While I was wringing out my keyboard, I came across a site that let's you get a glimpse of the "professionals" in action. (Yes, my quotations are full of sarcasm.) Check out TickerSpy if you are interested in the wheelins' and dealins' of the big $ funds.

Using the link above, you can go to the 'most watched' portfolios, sort by all-time change, and then look at the 'start date'. Those highest on the list by '% gain' with the longest time in are the one I tend to look at most closely since many of the biggest gaining funds just happened to have 'start dates' in 2009. Buying anything in 2009, and promoting those year-end results puts them in the dart-throwing monkey category.

Even though I do not partake in any mutual fund, some of the individual stock picks are thought-provoking to say the least.

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The market action today gave the CMI a little push towards a possible, near-term QID buy, but as of this moment the CMI is extending the QLD trade until further notice. A couple days of light volume retracement would be just what the donkey ordered to push the QLD upward into the end of this quarter.

Tempering Enthusiasm

"The safest way to double your money is to fold it over once and put it in your pocket."

~Kin Hubbard


Starting up this contraption after several days of downtime can be a chore. Most of the bugs have been cleaned out of the hard drive except I keep getting some intermittent groups of symbols on the screen like this one...

-------m------m------

(o o)
(~)

I'll have to work around them for now.

I had made a few cave drawings during shut-down mode that resemble crude statistical calculations based on CMI 2.0 history. It always important to keep perspective even though the current 30% year-to-date gain tends to cloud the gray matter a little.

Even so, the CMI giveth and also takeths away. Five years of history indicates that it takeths away only one quarter of what it giveths. That's the good news. Knowing this, there should be no surprises if a 7% retracement occurs. I wouldn't expect this to happen any time soon, but statistically speaking, nothing goes up in a straight line...not even last year's massive 120% QLD trade. (I'll be plugging that one for a while, so get used to it.)

Current market conditions are...umm...

/~\
C oo
_( ^)
/ ~\

Right. Current market conditions are exactly what they are.

I can tell you this. The bull is in the left sidebar which means the current QLD trade is still long and strong. The CMI 2.0 is still pumping out those squiggly lines that look like they are peaking again, but continue to flash the "buy" sign. Unless there is a giant one day sell off, this should continue into next week.

Fear Not

Don't be too concerned because you see the bull and bear rolling the dice in the left sidebar. And that blinking traffic signal above can only mean one thing. It's time to clear the bugs and critters out of the system and re-boot the pythons and tree frogs all in the name of giving you the best of the CMI for the next several months.

While the CMI has extended the gains to over 20% since the beginning of the year, set your stops because you are on your own. Maybe you will discover that you really never needed the CMI at all.

In fact, maybe you should go back CNBC and let those 'experts' fill your head with more molasses and pudding.

For all the rest who believe in thinking for themselves, see you on 12th. Same monkey time, same monkey channel.

MonkeyThrowDart will be off-line March 4th through March 11th.

Two Months with 2.0

After two months, the CMI 2.0 has performed better than expected. An annualized gain of greater than 62% is the benchmark. Since we have gained 19% after two months, this would put us far above that mark. Expectations need to be tempered somewhat since historical data shows the CMI 2.0 to have one gain for every loss, or put another way, a 50% win/loss record. Since December, the CMI has put together three winning trades in a row. The record of consecutive winning trades is six. This would be a good year, since it is the first year of the CMI 2.0, to
set the bar higher.

The Neural Networks guys state that, "The Stock Market prediction task divides researchers and academics into two groups... those who believe that we can devise mechanisms to predict the market and those who believe that the market is efficient and whenever new information comes up the market absorbs it by correcting itself, thus there is no space for prediction."

(That's one reason that specific details regarding the CMI or any other system that the monkey throws the dart at is kept under wraps.)

"Furthermore they believe that the Stock Market follows a Random Walk, which implies that the best prediction you can have about tomorrow's value is today's value."

Although I consider myself an APEademic, efficient market hypothesis, has some merit but methods such as the CMI have proven that systems can be devised to exploit a consistent advantage using following indicators. Predicting the market requires a whole new set of tools.

As emphasized by Jack Schwager in The New Market Wizards, "If you don't want to watch the quote screen all day (or can't), don't try a day-trading method. If you can't stand the emotional strain of making trading decisions, then try to develop a mechanical trading system for trading the markets. The approach you use must be right for you; it must feel comfortable."

After two months, I am uncomfortably comfortable.

More Quotes From the Bible

Obviously the thing to do was to be bullish in a bull market and bearish in a bear market.

~Edwin Lefevre, Reminiscences of a Stock Operator


Logically, the market is due for a pullback...at least when looking at the technicals. But making money in the market has little to do with logic. All that we can hope for is that the reaction of the CMI 2.0 quickly follows a large retracement, but also that it does not over-react and jump into a series of whipsaw trades. Following the CMI takes the guess-work out of it so we have plenty of time to find a few more Jesse Livermore quotes like the one above. Sounds like he would have approved of the CMI 2.0.

A-B-C Watch

Reading the technical "tea leaves" on the QQQQ's and Nasdaq chart gives me the feeling that we are at the C point of an A-B-C down. Sorry, no chart posted. Just do the 'Helen Keller' and follow along...

The high for the Q's was on 1/19 at 46.64, the low was on 2/5 at 41.12. We are sitting at 44.57 which is a tad over a 50% retracement. Volume looks weak so if I was a betting chimp I'd swing the other way. Since I am a devout CMI follower, I'll wait for the next signal. Even so, this might be a good time to think about setting a stop if you're so inclined.

On the other hand, my second guessing cost me some 'chimp change' last year.

While I'm watching the CMI do it's work, I have been busy applying some of the same principles to the Forex market. This is truly the Wild West of the speculation world, and the lure of 100:1 leverage has bled most traders accounts dry. But I would like nothing more than to take a few $$ out of this unregulated OTC market. If the monkey throws the dart at a currency pair, you'll be the first to know.

Read My QLD

Looks like I'm just a bull in a monkey suit...at least until the CMI 2.0 tells me to put on my bear costume. A gap down on Friday gave us a nice "out" of the QID and set up a low buy for the QLD. Today was just icing on the cake. I like cake...and grubs.

If this trade proves successful, it would be the 3rd winning trade in a row for the CMI 2.0. if you count that original trade from December. This is pushing the edges of CMI probability since two trades that result in consecutive gains or losses is more typical. Several years ago there were five winning trades in a row but that is an anomaly. I like anomalies...and grubs.

Return of the QLD

The market action was too much for the QID trade and the CMI 2.0 is once again a bull. At tomorrow's open the CMI will sell the QID and buy the QLD. Let's see if we can ride this up for a while.

The Superbowl Mutual Fund

Even though last year was stellar in term of overall gains for individual stocks, those companies that advertised in last year’s Superbowl came away with some notable gains. And you would have too if you kept the faith in these companies who have a little disposable income…3 million per 30 seconds to be exact.

The list below shows each company who advertised last year and the approximate gains from February 09 to the end of the year.

Monster (MWW) +94%
Dreamworks (DWA) + 82%
Disney (DIS) +60%
Sony (SNE) +50%
GE +41%
E-Trade (ETFC) +40%
Pepsi (PEP) +17%
Denny’s (DENN) +13%

Who’s paying CBS for the opportunity to contend for a place in the Superbowl Ad Hall of Fame for 2010? Several companies are back for more. They include E-Trade, Monster, Denny’s, Pepsi, Coke, Disney, Honda (HMC), and Budweiser (BUD). Pepsi will only show off it’s Fritolay appendage, and GE is taking a vacation this year.

The chart below shows the previous year’s results for the 2010 Superbowl ad contenders.





It’s a much healthier looking chart when compared to last year.

While the overall market performance will dictate how these stocks perform, it might be worthwhile to keep a few on the radar screen.

Hangin' On

The QID trade gave a little more up today on even lighter volume. The QQQQ's inched up another half a percent but it wasn't quite enough to nudge the CMI 2.0 out of the trade. I guess the new pivotal day is Thursday. I still think that the market is just consolidating and heading for new lows.

Oh right, I don't get paid to think.

All the thinking was done already when designing the CMI 2.0. Only history will show whether it was best to take the 15% gain, or set a stop that would have triggered a couple of days ago. History has already shown that second guessing, unless you have some really good market sense, doesn't always pay.