The concept of entropy is one of the most useful terms for understanding just about everything. While it has its origins in natural law — thermodynamics, specifically — the concept holds true pretty much across all closed systems.

In the simplest of terms, every closed system will ultimately degrade toward a state of maximum entropy.

The stock market is higher again this morning, defying those who continue to call for a pullback. I have been talking about how even though the market had become overbought, instead of pulling back it mostly went sideways while the overbought condition got worked off. This was a positive sign, and as you can see in the chart below, the oscillator has confirmed the recent highs in the market by making a higher high.

Don’t look for financial firms to return the favour

Congress is working on plans to rein in the questionable activities of Wall Street, and re-direct the self-serving focus of major banks. I wish them good luck with that.

Financial firms are fighting back with propaganda blitzes aimed at raising public fear.

For instance, independent economists are debating the pros and cons of moves announced in the U.S. and the U.K. to remove some of the stimulus efforts that rescued the financial firms this time, such as the U.S.

The crew over at Wall Street Cheat Sheet posted a quick interview they conducted with Jim Rogers. There was one line in there that really resonated with me and was something new (to me anyway) in terms of his usual message. More like an addition to his usual message.

Happy birthday, bull market!  (Crossing Wall Street)

How overbought are the markets here?  (Trade to Learn)