Second Life Trading Technical Analysis

As we get further into the holiday season, trading in Second Life to continue to slow. Maelstrom Baphomet started off his most recent post noting that “There's not much to say about the market this part of the year as it tends to get slow and sluggish as not to many people bother with their investments or tracking the market around the holidays…”

A brief glance at the exchanges seems to bear this up, with the exception of Monkey Canning buying 100,000 shares of AVC yesterday. With less players in the market, there could be some good trading opportunities in the event that a stray seller comes by when there aren’t a lot of buyers. So, I thought it would be interesting to look at some of the technical data for various stocks.

BDVR, BNT, BMG, DFC, MED, QCL, and VHI all saw their support levels drop. WJUV, DCTY, LCA, SLCX, AVC, IBF, and SBP all saw widening as both their support levels dropped and their resistance levels increased. ESN, BHE and fifteen stocks on SlCapEx all saw their resistances levels climb.

While it is hard to tell how much of this is because of fundamental changes, and how much is because traders aren’t paying close attention right now, my guess is that a lot of the drop in the support level for several of the stocks, especially those that saw their resistance level increase at the same time, is because buyers and sellers are doing other things for the holiday season, and this may present some good trading opportunities.

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It’s All About Change

This week the TPM Bookclub is talking about The Legacy of the Dean Campaign, and two books, The First Campaign: Globalization, the Web, and the Race for the White House, by Garrett Graff and Mousepads, Shoe Leather, and Hope: Lessons from the Howard Dean Campaign for the Future of Internet Politics, edited by Zephyr Teachout and Thomas Streeter. I wrote one of the chapters for Mousepads and am participating in the discussion at TPM. Below is my first contribution to the discussion there.

Zephyr has written about the nature of power and language. Garrett has written about message and medium. I’d like to focus on another aspect of what happened. It’s all about change.

When you get right down to it, that is a fundamental aspect of any campaign. Do we stay with the status quo, or do we embrace change? Incumbents argue for the status quo, challengers argue for change. In a primary of different challengers, the question becomes who will be the most effective agent of change, and what will that change look like.

In some cases, we look at the rhetoric that the candidates offer. This one with change this, that one will change that. Yet, we should look deeper. What sort of change is the candidate bringing about in his or her campaign?

My experience of the Dean campaign was that everyone believed what Gov. Dean said when he told us volunteers, “The biggest lie people like me tell people like you, is that if you vote for me, I’ll solve all your problems. The truth is You Have The Power.”

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Spock, part 2

Beth Kanter is expressing second thoughts about Spock. She points to a post by Nancy White where Nancy simply says Ick! And Please, don’t invite me to Spock. Nancy points to posts my Jim Benson about his initial response to Spock and his suggestion that It may be the evil Spock.

I’ve read the concerns. I’ve thought about them in the context of the discussions on Reputation Economies in Cyberspace (RepEcon) and I have to say that I still like Spock. I think the concerns are overstated.

The first concern is that Spock has gone out and scraped websites, including LinkedIn, MySpace and others. This does not bother me. I am very conscious that the information that I’ve put on sites like LinkedIn and MySpace is very public information. In my case, I’ve been deliberate about what I put up there. I like to take an active role in attempting to manage my reputation online. To me, Spock’s aggregation of this information and the ability for me to tag and rate the information is a good thing.

I find it curious that some of the critics are the same people that argue for using open protocols to do similar sort of things, cross linking social networks, and this gets to a key initial criticism. Spock is not as open as open source purists might like. To tie this back to RepEcon, we have the question of who owns reputation data online? Who has the right to modify it? It seems like Spock is doing a good job in handling who gets to modify information, but the aspects of who owns the underlying information has not been dealt with well. Perhaps if I could import and export data as hCards and FOAF, and other formats, I would feel a little better about it.

Another concern is about how Spock will read your address books and send invites based on them, if you allow them to. I’ve invited people using my address books and found that Spock has been very respectful of who I want to invite and who I don’t want to invite. I don’t recall if I sent an invite to Nancy. If I did, it was before I read her post and I apologize. Related to that is the concern about how you have to sign up to be able to make changes. Personally, I think that is a good thing. It makes the system more trustworthy. Hey, if you find things you don’t like about yourself on Spock and you’re a friend of mine, drop me a note. I’ll make changes for you if you don’t want to join.

My bigger concerns, which I’ve touched on before is Spock’s inability to recognize context. Quirky might be a very accurate and relevant tag for me, within the family dining room context. By it might be completely inaccurate and irrelevant within the context of financial services consulting. Another aspect of context is time. Longhaired would have been an accurate tag for me years ago. Balding is more accurate now. Right now, I think I’m tagged as brown-haired. Yet that is rapidly changing to gray-haired, for those hairs that remain.

Likewise, context is ignored in trust relationships. As I noted before I trust Deborah for information about nonprofit information technology, but not for recommendations on the best sports car to buy. For that matter, I would love to see the ability to rank the trusts, perhaps on a scale of 1 to 10. Put simply, there are some people I trust more than other people.

So, is Spock all that it could be? Well “Be all that you can be” was the slogan of the U.S. Army for many years. I hope that it isn’t part of some U.S. Intelligence effort to spy citizens, but if it ends up having useful information, I expect they will want to use it. That digression aside, no, Spock is not all that it could be. On the other hand, they’ve only been around for a little while, and hopefully, they are getting the kinks worked out.

Fascinating

Yes, I couldn’t resist offering ‘Fascinating’ as my response to a question I received on Facebook about my thoughts on Spock. Beyond the trekkie humor, there is a lot that is fascinating about Spock.

Spock is one of the newer social network sites. It scrapes the web to build profiles of people. There are other sites that have done similar things, but perhaps less effectively. What makes Spock interesting is the way relevance of information is determined. People can go in and vote on how relevant pieces of information, such as tags, websites, photographs, and so, are. There is some secret ranking based on these votes; how useful the votes were and how much they agree with other people voting.

All of this ties nicely back to the symposium on reputation economies that I attended recently. Users have some control over their reputations. Star Wars Kid and Dog Poop Girl could vote on certain information about them not being relevant. It might not be enough to stem the tide, but for smaller reputational events, it could have significance.

One aspect that seems to be missing from Spock is context. A recent quote that my daughter put up about me illustrates this. We have great fun around our family dining room table. Discussions range from the profound to the quirky; often providing a wonderful mix of both. Mairead has attributed a quote, “Well, the barbie princess had a long, hard day at work...” to me. I do not remember having said that, but it does sound like something that might have come up around our dinner table.

That quote is not relevant to the persona that I present as a political activist or as financial services technologist. Yet it is very relevant to my persona as a father with a strange sense of humor. Since most people looking at my Spock page will be looking at me in terms of my political activism or my work with technology and financial services, it is tempting to remove the quote. Yet it is relevant in one context, and I would hate to damage my daughter’s ‘Spock Power’ by removing something that is relevant to her context but not the context of a majority of visitors.

A friend of mine who wrote me asking for my thoughts about Spock said,

I’ve got some rather mixed thoughts these days of putting too much info online, but wondering if it's necessary for business. I've had some other soc. network invites too that I'm hesitant to get involved with--just don't know if it's necessary or important to join them.

One of my first thoughts is from Tom Friedman’s comment about everything being possible on the Internet and the question is, will you do it, or will someone else do it to you. In my friend’s case, there are already three different entries about her. One points to her LinkedIn page. Another points to a biography at a conference site. I do believe that my friend should get on Spock, as well as some other social network sites, and take a more active role in attempting to manage her reputation. Reputation management is important for business, and my sense is that Spock may become an important aggregator.

So, I continue to explore Spock. I attempt to connect with contacts via Spock. I even try to boost my Spock Power a little bit, and am envious of friends, and even my daughter, who have much better Spock Power. Live long, and prosper.

Technical Trading in Second Life Stocks

The recent discussions about exchanges and trading strategies in Second Life has prompted me to explore a little bit more some of these ideas. At the first public class of the Investment Education Team, there was a discussion about price earnings ratios. It was noted that stocks in Second Life seem to trade with little correspondence to these ratios. With banks and exchanges paying as much as 44% interest per annum, it means that any stock with a Price Earnings ratio higher than three needs to be less riskier than the banks or exchanges, to justify such a ratio, and that just isn’t all that likely.

So, it may be useful to move from fundamental analysis to technical analysis of the stocks in Second Life. Three exchanges, SLCapex, ACE and VSTEX provide in a format that makes it easy to do some of this analysis. A fourth exchange, ISE provides some similar data, but in a different enough format so that I haven’t gone out and added it to my mix of data.

Specifically, using the data feeds they provide, you can build your own data store and ticker plant. I wrote a little bit about that here. Now that I have a good store of data, I can start analyzing some underlying trends.

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