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Robot Investing

Quote of the Week: to paraphrase politician Willie Brown - If the courts decide that corporations are persons when making campaign contributions..why can't they go to JAIL?

As ennui sets in at the stock markets - less Volume, weaker breadth, summer vacations, even decades low viewership of CNBC (109,000 per day!!), maybe traders are looking for a way to compete with the Flash Boys of expensive co-located AI computer-to-computer trading - maybe the answer is to use robots to trade!

Readers can find out at this week's TSAA meeting this Tuesday (see below):

Dr. Tucker Balch will present on Machine Learning -- the process of programming robots to "think for themselves" -- and how this same technology can be used in Technical Analysis to pick stocks and manage risk. Lately Tucker has been touring the U.S. introducing his company, Lucena Research, and drawing large crowds of 100 or more.

Please note that the space at Golden Gate University for this event is LIMITED and its filling up fast, so be sure to register now! Cost is $20 for TSAA-SF members and FREE for students.


Tuesday, July 29, 2014

3:00pm - 4:30pm


Golden Gate University

5th Floor Auditorium

536 Mission Street,

San Francisco, CA


Also coming this summer - the Money Show at a new venue - the Union Square Hilton (not the usual Marriott on 4th and Mission Sts.

The MoneyShow is coming to San Francisco on August 21st through 23rd! The SF show is its largest meeting of the year, with 74 guest speakers imparting their wisdom to attendees, including...

Jeffrey Hirsch

Steven Hochberg

Craig Johnson

Martin Pring

Hank Pruden

In the local print version of the Examiner, the Wall St. Journal featured an article on Investing Basics highlighting the best books one can read to succeed: at the top of the list were Reminiscences of a Stock Operator by Edwin Lefevre and the Charles Mackay book on the Extraordinary Popular Delusions and the Madness of Crowds. Both are local technicians' favorite bibles! Reporter Brett Arends also mentioned Business Adventures by John Brooks as favorites of Bill Gates and Warren Buffett.

Reiterating Harry Domash's saying that: The Trend is your Friend until it Bends at the End, it is a fool's errand to try to call the Top of this Fed ex Machina market. It would be best to not be a Bull or Bear, but Cautious. Several technicals are indicating weakness:

Doug Ramsey notes that the Dumb money (CBOE options) are showing more calls than the OEX calls- the widest spread in ten years; although margin interest being at record highs is not unusual, when it tops, as it has recently, a chart by John Mauldin shows the stock market correlates very tightly with it - TBD.

Recent anecdotal surveys have shown that 80% mutual funds have underperformed overall markets with ALL stocks in them, including Barron's own 400 stock portfolio (no fees); for the sixth year the HFR (Hedge Fund Research) reports that the median average has underperformed the S&P 500.

So where does one put their savings to work? MMF (money market funds) just got re-regulated to "break the buck", and float, with the caveat that they can block exit trades or at least charge back-end fees to leave. One story in Barron's opines that this new SEC reg. only applies to Institutions; another story says Insts. and Retail can be comingled! At least CDs are insured by the FDIC to some limit. This to get negative ROI.


In my Sentiment blog, which I've been publishing for a decade, there are other signs of at least a temporary hiatus in the three worst months of the year - Aug-Oct., with the last three Augusts down. Investors' Intelligence says that the drop in the Bulls % below the 60s is a sign of a correction of some magnitude.

Insider Selling has been and remains high from board members and officers, since before year end - especially CEOs Sheryl Sandberg and Jeff Bezos; (paid off last week on Amazon).

More sentiment readings, based on my CMT topic of 1995, can be found at: