Composite Number Chart

Chart Presentation: Moving Together

On any given day the markets don’t have to ‘do’ anything. Prices are prone to wandering with apparent trends changing directions two or three times per session. Over a longer stretch of time, however, trends need to make sense. Markets that move together should move in the same direction because if they don’t... the risk of having the bus back up right over top of you increases considerably. Below is a chart of the ratio between Japanese bank Mitsubishi UFJ and the gold etf . The argument has been that the laggard trends should turn up when the offsetting trends turn down. In other words if money is flowing away from the laggards and into gold then once the trend changes we should see strength in the laggards and weakness in gold. In other words... a rather abrupt upward pivot for the ratio line. We are fairly comfortable with this particular piece of logic. As long as the MTU/GLD ratio is trending lower the markets remain mired in some kind of crisis-related pressure. Sub-prime, Middle East, PIIGS, etc.

Next is a chart comparison between the ratio of gold to the CRB Index and the combination of the Japanese 10-year bond futures times the Japanese yen futures. Our argument is that all of the charts on this page represent the same basic story. The MTU/GLD ratio declining denotes economic weakness. The gold/CRB Index ratio rising represents money moving into gold due to concerns about the currencies of most developed non-commodity producing countries. The rising trend for the combination of the Japanese bond market and yen suggests that even 20 years after the peak for Japanese asset prices the recovery has yet to find any kind of traction. The point? We are looking for lower gold prices. We are looking for a weaker  gold/CRB Index ratio. The offset to this should be strength in the banking shares. Confirmation should come from a weaker Japanese yen and bond market and our suspicion is that the most difficult trend to break is going to be the JGBs times yen. This is the ‘quiet’ trend that corrects from time to time but, when the dust has settled, is consistently resolving back to the upside.

Equity/Bond Markets The yield spread declined to a low in 2000. A falling yield spread is the markets’ way of slowing the pace of cyclical growth. A spread below ‘0’ means that the yield curve is inverted and an inverted yield curve has preceded all U.S. recessions since the late 1960’s. We should note that an inverted yield curve does not always lead to recessions but, then again, it has been a long time since the U.S. has had a recession without yield curve inversion. After years of fixating over Cisco, NorTel, Intel, Microsoft, etc. investors spent much of the first half of the last decade attempting to find the bottom for the tech and telecom sectors. Meanwhile... the trend had changed as the yield spread declined on energy price strength. All this means is that we shifted from a tech trend to an energy/commodity trend. If tech led to the down side in 2000 and energy prices led to the upside in 2004 and... home prices led to the down side in 2007... what is going to lead to the upside in 2011? A number of individual stocks have already to moved to new all-time highs along with copper futures but our sense is that the sector that has a similar chart to crude oil between 2000 and 2004 is the Nasdaq Composite Index. Senior Analyst, TraderPlanet.

Life and What Not: Prime and Composite Numbers

Using a type of block method we can find if a number is prime or composite by doing the same as examples above illustrate. Prime numbers are only able to make one square or rectangle where as composite numbers can make multiple squares or rectangles. Below you are presented with multiple numbers, use the blocks given to you by your instructor to find out whether or not those numbers are prime or composite. Write a “C” for composite and a “P” for prime next to the number given. In this method we use a design similar to division problems, a slightly different method than the factor tree but with the same results. In the illustration above the factors are once again highlighted in blue and by multiplying these numbers together we can see they equal 75, therefore these are the factors of 75. Now that you have an idea of how the ladder method works try to find the prime factorization of the numbers below using the ladder method.