Economy – Page 5 – The Lawrence Chan Blog

June 18, 2021

TLC Weekly Update June 18, 2021

Quarterly option expiration Friday today and as expected with the stock market indices pinned lower. Nothing special yet the media continues to make up reasons for something that happens regularly. Is it that hard to figure out the third Friday of a quarter end? I am not trying to be mean here … could it be the case that many financial news reporters are having dyscalculia.

Those crypto fans with many followers have been very bullish about bitcoin for like a week now. They even come up with all kinds of charts with squiggly lines to show that Bitcoin has already “bottomed” and that it will go to $100,000 “very soon”. Well, I stand by my prediction made back in April through Twitter and here is the latest update of the chart that I added a few lines (once in mid-May and then Jun 1) to show how easy it is to read a chart like bitcoin due to its participants are mostly emotional beings.

How do I know Bitcoin will go sideway for a month? It is simply basic chart reading. I even wrote a book on chart reading years ago showing how to do it. And here is rule #1 : read the chart from left to right only. Why? So that you cannot add opinions of your own after the fact.

Of course I can be wrong since charts only tell at most 60% of the story. For the well being of the crypto HODL crowd, I wish them luck and that I am wrong because the projected down move is not the end of the drop. I just do not want to give them a heart attack.

Here is a nice video on a pretty bird nesting. Something feel good is called for as the re-opening of the world is happening.

Patrick Boyle has not disappointed and came up with yet another very good video about the current state of the stock markets. What he said is something I know for a long time from my investing in various companies these years. Majority of them chose not to go public because of funding availability in private sector. When you are a profitable business and have all the funding you need to grow, what’s the point of going for IPO. Watch it if you want to understand the subject better.

To round up my clips, here is Paul Tudor Jones talking about the inflation trade (well, we can’t rule out the fact that he maybe touting his positions). I like to add just one minor but deadly point about this view of Fed failing to contain the inflation or that hyperinflation is coming. All it takes the G7 governments to do is manufacturing another “crisis” like alien invasion or a really deadly pandemic to allow for forever printing of money, at least within their sphere of control. In other words, with a very violent transformation from so-called democracy, which is never really the case anyway, into authoritarian states and viola, you can forget about inflation for good …

This week has been a very productive week that I managed to get many things done in a short period of time. Hope that I can keep this up and ready for the deadline (end of June) I imposed on myself to be ready for the soft launch of my proprietary trading. Exciting time!

Happy Father’s Day!

May 21, 2021

TLC Weekly Update May 21, 2021

Option expiration Friday today. To the surprise of the new crop of retail traders, the stock market did not go straight up off the open. What they have mistaken as a sign of the stock market bottoming out this week is in reality the normal option expiration dynamics at work. Option market makers can’t just sit there watching their books get toasted by close today, can they?

Hence they do their best to defend the markets from dropping lower on Wednesday to protect the puts they wrote and now on Friday they do their best to put a cap on the rally to protect the calls they wrote. It is really business as usual but the media always put a spin on this.

I was working on upgrading our network infrastructure and somehow when I search for network routing this completely unrelated article came up. It talks about how easy it is to do something extremely malicious to others that police will have a hard time catching the perpetrator. Cyber crime is real and can happen to all of us.

Watched a long discussion between Jordan Peterson and Stephen Fry. Very interesting talk as one of them is a religious person and the other is a declared atheist. It is a great conversation demonstrating how people can conduct meaningful conversation even though the standpoints are not the same.

For those of you interested in financial market outlook, Jeff Gundlach uploaded a video of him presenting his view at a Tony Robbins event. It is a nice summary of his view and what he believes will happen soon. His recommendations for the young guy is priceless.

This weekend will be another brutal week for me to take care of the details before the launch of my proprietary trading venture. It is just over a month away. So much more to get done and I wish I have 40 hours a day.

Have a great weekend all!

For my fellow Canadians, Happy Victoria Day!

May 7, 2021

TLC Weekly Update May 7, 2021

Today is Non-Farm Payroll report Friday and I just can’t believe the so-called economists and Wall Street analysts could have estimated that there would be a blockbuster employment figure. Anyone I know who runs a business tells me that the young adults refused to work because of the support payment they are receiving. The shortage of young adult workers will continue until the support payment stops. It is simply human nature …

Interesting read about Tom Anderson, the co-founder of MySpace – the retro look at social media back then and now. Are we entering a new norm in politicking worldwide thanks to the power of the modern social media?

Lately I discovered that Dr. Huberman has started his own podcast at YouTube. It is great news for anyone who is interested to learn more about themselves through the lens of biology and neuroscience. Dr. Huberman has put in much effort to make these podcast understandable by normal people without the scientific training. You don’t need to watch (or listen to) everything he puts out. Pick and choose the topics you want to know more and I am sure it will be time well spent.

Some of you have email me asking why I am super busy all the time. Well, if I am just trading and do nothing else, I will have a lot of free time on hand. However, I am in the process of building my own proprietary trading firm. I am busy raising fund, interviewing coders and research assistants to help me build the company.

My goal is to grow it big like Renaissance Tech one day. Given Dr. Simons started Renaissance when he was 44 years old, and that it took him and his partners 5 years to really figure out their approach, I am in a good position to start my firm since I already have my trading framework all developed over the years. The lockdown here makes it difficult to look for office space and hiring people. Training is especially hard as many things are much easier done face to face but it makes no sense to wait until after lockdown is over.

I will work on my emails over the weekend. If you are waiting for my reply, I think I will manage to catch up with the rest of my inbox finally.

Have a great weekend all!

April 9, 2021

TLC Weekly Update April 9, 2021

Another week of record new all time high for S&P500 but not quite with Dow and Nasdaq 100. This is definitely an environment that we rarely seen in the past. As far as I remember from my long trading career, this is the second time we see this all-time-high phenomenon. Last time it was the end of year 1999 to the beginning of year 2000.

I warned in my newsletter for my premium members that this year we are going to see problems with essentials. Here is a video from a youtuber contractor telling us how bad things have been with the renovation / construction materials. Things will go way worse before it gets better.

Unlike a growth driven inflation, what we are experiencing is a supply side limitation-driven price hiking. There is no limit to how far such price rising wave will go. It all depends on how desperate the buyers are. If this continues for a long time, it will damage the internals of a economy beyond repair.

I just watched another video from DoubleLine talking to Louis Gave of Gavekal Research. Mr. Gave has unique insights about the long term economic changes that will affect everyone who have an investment portfolio.

A very interesting video about Ireland’s Vitamin D report. For those of you who are told by MDs that you do not need Vitamin D supplement, it is important for you to watch it.

Since it is the beginning of a quarter, I have a lot of paperwork to catch up on. This is also the tax filing season for Canadians. Getting all these accounting work done and then I will be able to relax, say, for an afternoon, before getting back to work on other pressing tasks.

Have a great weekend all!

March 26, 2021

TLC Weekly Update March 26, 2021

Another week of roller coaster ride with Dow shot back up near all time high while Nasdaq 100 resumed its sell off. S&P got caught in between and could not decide which one to follow. This makes life difficult for many pro traders I know.

For those of you wondering where the market is heading, Michael Burry of “The Big Short” fame has made a series of tweets and then stopped talking about the markets all together. Business Insider made a summary of what he said, enjoy!

His point of view on Bitcoin and Tesla are very interesting. I do not know enough about crypto to say that they are “fads”. However, I am very sure every car company will catch up with Tesla eventually. And I agree with Mr. Burry on EVs being a fad because EVs are not good for driving under many conditions from extreme coldness and a post apocalyptical world with no electricity.

I have a friend being diagnosed with excessive iron in her blood. Well, most people do not know that cast iron pans can overload people with iron even if you are on a diet with insufficient iron. Read this article to understand why.

Last weekend I spent it all on hardware upgrade. This weekend I will be on turbo mode to complete some coding. Just don’t understand why something always pop up that require emergency attention. Must be some damn astrology setup on my chart … LOL

Jeff Gundlach, the “bond king”, has a new webcast made for his clients and released to youtube about a week later. It is packed with proprietary data models and analysis. If you are interested in understanding the current economy, this video is a must-watch.

Here in Toronto the weather finally goes back up to above zero and the huge piles of ice on the streets are melt away over the last few days. It is very nice to be able to walk outside without putting on layers of clothes. Being able to stroll around while tackling difficult programming problems helps a lot.

Have a great weekend all!

March 5, 2021

TLC Weekly Update March 5, 2021

This week the stock markets worldwide zoom in to just one thing – the spike in US T-notes yield rate. It dropped a bit below 1.5%, we got that Monday mega rally. The next day it edged higher to 1.5% again, Nasdaq 100 higher flyers all hammered. And then yesterday Powell said nothing to calm people down, next thing we know yield just spike through the roof and collapsed S&P back below year 2020 close. Watching the markets move feels like watching a drunk doing all sorts of crazy things.

Got to wonder by next Friday will the markets remember what happened this week.

I watched a video about Turkey’s real estate trouble. The trouble there looks to me already happening everywhere else. Real estate investors should pay attention about this.

I came across this video recommended to me by a friend on tendon training. He is so surprised that what is said in the video confirms what I told him decades ago that the classic martial art training if done correctly it does not focus on training your muscles but your tendons. Sometimes it is important to not slap the words of “not scientific” on things you do not understand. I have seen first hand how one of these very old master martial artists with a thin and flimsy frame who can punch lightly and destroy a concrete wall …

No magic. No tricks. Pure hard work over several decades.

And obviously his disciples could not achieve the same level of power due to “demand of modern life”.

Jordan Peterson’s new book Beyond 12 Rules for Life is just released. Accompanying that, of course, are internet media exposure in place of the old world book tour. One of the conversations that stands out and worth watching the whole thing is the one Peterson did with Tom Bilyeu. The conversation leads to interesting explanation by Peterson on several psychology concepts that would take years to learn. Be warned – it is two hours long.

I am extremely busy working on multiple fronts and that stalled my effort on producing videos / short lectures for my trading courses. I can foresee that by end of March my marathon push to setup my prop trading firm will reach the milestone of completing the work on laying out the foundation. There will be few mundane tasks left and back to a more regular schedule to focus on research and development. I will then be able to pick up from where I left off on producing the videos.

Have a great weekend all!

February 19, 2021

TLC Weekly Update February 19, 2021

This year 2021 is definitely at least as bizarre as year 2020. Looking at the extreme weather we experienced this week, I wonder what else is in store in coming few months. I will not be surprised if it gets any colder here in Toronto, the polar bears will come visit us.

One good news I got this week is that Big-Game Hunter ES, the fully automated trading strategy I have created, made it to the Top 10 List at Striker Securities. BGH is the only day trading strategy made it in the list.

BGH had some tough time over the past 2 years from technical issues to dealing with Trump’s tweet storms. I am confident that with fewer disruptive events, BGH will do fine going forward.

When I was searching for performance evaluation methods online, I came across this interesting video about the origin of minesweeper and solitaire that extends to a talk about performance feedback and evaluation. Understanding this is useful for anyone, traders included, who are trying to improve their skills of any kind.

For those of you interested in building your own PC, here are some good news for you – the Intel iCore series CPU prices just crashed hard. And in fact, if the momentum tells anything, it may persist for a while. The pressure on price came from multiple front, including the leak of the pricing of the next generation iCore CPUs.

In my case, I don’t need the latest and fastest computers to do my work which is mainly research and development of trading algorithms. Due to limitations of the trading platforms available in the market, there is really no point to pay top dollar for the top of the line computer models. Instead, I use multiple cheap computers at the same time. If one computer is doing some heavy duty optimization work that can take hours to get the results, I simply continue to work on a different set of trading algos on another computer.

Every famous investor going on TV or other media these days are talking about how unreasonable the stock markets are at the current price level. However, majority of them are also experienced enough to not going short against the markets. Not that I believe in the bullshit of Elliot Wave Theory, but trading legend Paul Tudor Jones really sums it up nicely,

“There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it’s the end of a bull market or the end of a bear market.”

There is no shame to take profit or lock in gains on some of your long term holdings given the current high valuation of many stocks and the indices. Not protecting your capital is very irresponsible for your financial well being.

Have a great weekend all!

January 8, 2021January 8, 2021

TLC Weekly Update January 8, 2021

US electoral dispute is now over. But we are left with more questions than answers on the future of United States. Given how ugly this 2020 election has become, I can’t imagine what will happen by mid term 2022 …

Luckily I am just a Canadian. Canada being such an unimportant country, its political dramas do not lead to any meaningful impact on the world. This makes me feel much better during our elections.

Here is an older article about human brain’s approach to process sensory information. The article came out back in Oct 2019. This understanding of the human brain has helped computer scientists to breakthrough many of their problems in AI last year. So not everything happening last year was bad.

For some mysterious reason, youtube chose to put this on my front page. It turns out to be a charming video that I watched years ago.

I forgot to mention that I finally stopped my 20+ years habit of writing down notes on notepads some 2-3 weeks ago. I took the leap of faith to replace my written notepads with Samsung Galaxy Tab S6 Lite. It takes some adjustments to my routine but I can tell you after 2 weeks of notes taking on the tablet, I will never go back to pen and paper.

I chose this tablet over other options because of the included software for notes taking is better than ipad and ipad pro. I can now easily include clips by taking a picture using the tablet, or taking a screenshot from the browser. But most important of all, I no longer need to find space to store even more notepads.

I picked up a Rubik’s cube over the holiday with the intention to practice my cube solving skill. Then I found this on youtube. I want that cube!

I was asked by many friends about my year 2021 outlook. I will summarize the main points here. Some are technical view based on market data. Some are astrology based projections. And some are just wild imaginations. Consider this a mocking of all the predictions people made for 2021.

shortage of food and essentials
worldwide cargo transportation cost going much higher
interest rate goes up
civil unrest everywhere
a real pandemic will arrive that reduce global population by 10%
major earth quake happening somewhere
aliens finally public broadcast their existence among us
gold to crash 50% in a year or two
bitcoin to crash 80% in a year or two
aliens giving us warp drive and unlimited energy technology

Have a great weekend all!

January 1, 2021

TLC Weekly Update January 1, 2020

Holiday season coming to an end this week with the US stock markets closing at all time high on the last trading day of 2020. Who would have thought this is the outcome of COVID-19?

A epiphany came to me yesterday that it should not be a surprise. Back in 1987, the first stock market crash the US Federal Reserve had to deal with, it was caught by surprise and reacted to the situation carefully. Back then, the US Fed held the belief that they should not interfere with the free markets.

Since then, every financial crisis had resulted in the Fed reacting to the situations more quickly. And the amount of money being thrown behind each crisis gets bigger and bigger. The belief of the Fed has clearly changed from non-interference to central planning. There is no more deliberation within the Fed whether they should react to a situation or not.

At this point Fed will answer to all major and minor economic issues with automatic money pumping.

But isn’t central planning a “feature” of communism that the United States claims to be the root of all evil?

The Fed sees no consequence from their actions. However, normal people around the world are feeling the consequence everyday. The wealth gap has grown so much many people are now debt slaves. Isn’t this the cause of almost all the revolutions in human history?

What I worry about most, however, is something else. All the past crisis were singular events spaced out by at least 2 to 3 years. They hit the financial system hard but we have time for people to adapt and recover. What if the frequency of these events increases significantly? Would money pumping still work?

Talking about unintended consequence, here is a piece of local news that I am sure this problem is happening everywhere in the world. Kids with no supervision … you really believe they would not cheat?

Here is an interesting read on the work of a mathematician turned biologist. What I liked most is that patterns can emerge everywhere without the participants knowing. Stock market is a prime example – everyone are guessing and many traders just cannot see beyond their own point of view. In aggregate, recurring patterns emerge from their actions.

And this piece makes me thinking … special organizations would definitely create their next generation operatives with no finger print now that someone have figured out the DNA signature.

Taking a break today and will back to normal schedule tomorrow.

Wish you all a Happy New Year!

December 11, 2020

TLC Weekly Update December 11, 2020

Another interesting trading week almost over with all eyes on next week’s US electoral vote event (Monday, Dec 14) that may result in some shocking twists and turns. All these states filed their cases with the US supreme court may not impact the outcome though. But what if they do? I can’t imagine the mess we are going to see …

This is the time of the year people start to read up the astrology predictions for the coming year. One recurring talk about Dec 14 and Dec 21 this year keeps coming up. The other funny one is the talk about Mayan end of the world year was not 2012 but 2021. I am not a believer in astrology based on Zodiac birth month. It is still fun to read and watch astrologers, both experts and pretend ones, making forecast about people’s future.

I just learned about Russia’s organic food industry and I am very fascinated that how long will it take US to condemn all organic food because it is mostly imported from Russia.

My research on history for some mysterious reason landed me on this story about the evolution of bats. It is a good read though.

A good video by Yahoo Finance asking Paul Tudor Jones his view of the market. It is a short video packed with good info and his thoughts about the stock market may surprise you.

I am writing my 2021 business plan at the moment. After a year of total chaos and surprises, I have so much to add to my usual contingency plan. Trying to anticipate what has never happened in our own life time is difficult. Hence the research into past history to see what can happen and how that impact the economy and our lives becomes very useful.

For example, what if we have another major power outage like year 2003. Or that something like Ebola, instead of COVID-19, is spreading worldwide. The goal is to figure out what has to be done so that I will not react to these crisis level situations unprepared.

And of course, end of the year is a good time to clean out the junk. I finally have to throw away my trusted Samsung all-in-one printer / scanner. It served me well for over 10 years. Over the years, its drum died first, so I could not use it as a printer but I still keep it as a scanner. Then the scanner cover broke last time I moved so all it can do was doing autofeed scanning. And now its autofeeder gave in.

So after all, I ended up buying something this holiday season. Like it or not, life is a series of surprises.

Have a great weekend all!