Archive for July, 2009

• Life (and trading) is unfair
  abnormalreturns, July 31st, 2009 at 1:49 pm, Comments: 0

  The debate over high frequency trading (HFT) has reached the boiling point this week.  With the Congress and the SEC now looking into the practice the endgame is in place.  In a certain sense the debate is now out of the hands of the blogosphere and is in the hands of politicians, regulators and industry [...]

• Friday links: hot coffee
  abnormalreturns, July 31st, 2009 at 11:46 am, Comments: 0

  Until further notice, this is a cyclical (not secular) bull market.  (Big Picture also The Pragmatic Capitalist)
  What the Dow’s 10% move above its 200 day moving average means for the next year.  (Trader’s Narrative)
  The Nasdaq has been on a tear relative to the Dow.  (Crossing Wall Street)
  The best performing stocks in the S&P 500 [...]

• Thursday links: competition and liquidity
  abnormalreturns, July 30th, 2009 at 11:55 am, Comments: 0

  Competition will bring down the profitability of high frequency trading.  (Falkenblog also Dealscape, The Stash)
  “Is it possible that HFT is entirely benign and just provides liquidity to the market? Yes. But that seems improbable to me.”  (Felix Salmon, ibid)
  The NYSE is moving to New Jersey, kind of.  (WSJ)
  To what degree was statistical arbitrage to play [...]

• Public private profits
  abnormalreturns, July 30th, 2009 at 9:00 am, Comments: 0

  There has been a great deal of discussion about the BlackRock Legacy Securities Public-Private Trust which is slated to trade as a closed-end fund on the NYSE.  The fund is designed to purchase mortgage-related assets as a part of the government’s PPIP plan.  Let’s take a look at the offering in a couple of different [...]

• Wednesday links: low quality liquidity
  abnormalreturns, July 29th, 2009 at 10:54 am, Comments: 0

  “In less than 9 months, the Nasdaq has gone from being 40% below its 200-day EMA to being 10% above its 200-day EMA. Talk about a huge swing.”  (StockCharts Blog)
  The reversal in high yield spreads are nearly as breathtaking as the crisis-led rise.  (Bespoke)
  Is China’s stock market gotten ahead of itself?  (Trader’s Narrative also Contrarian [...]

• Tuesday links: an uneven playing field
  abnormalreturns, July 28th, 2009 at 11:52 am, Comments: 0

  “There’s not an even playing field out there. Learn to live within it or don’t trade/invest, unfortunately it’s that simple.”  (Daily Options Report)
  “Markets have always been skewed against retail money, whether information sloshes around an open outcry pit or a high-tech algorithm.”  (FT)
  Ron Insana on the sideshow that is high frequency trading.  (Zero Hedge, ibid)
  Does [...]

• Monday links: bullish bandwagon
  abnormalreturns, July 27th, 2009 at 11:53 am, Comments: 0

  “Consistently profitable trading should be boring.”  (Tickerville)
  “(I)t’s not different this time, next time or any time. It never is and never can be.”  (The Psy-Fi Blog)
  The bullish bandwagon is getting crowded.  (Clusterstock, FT Alphaville)
  Check out the rally in corporate bonds.  (WSJ, MarketBeat)
  Real yields are at their highest level in 15 years.  (EconomPic Data)
  What the increase [...]

• Sunday links: errors happen
  abnormalreturns, July 26th, 2009 at 4:06 pm, Comments: 0

  Summarizing the blog debate over high frequency trading.  (NYTimes)
  European stocks are cheap relative to the US.  (Barron’s)
  Looking for new leadership to lead this stock market rally.  (Howard Lindzon)
  The role of emerging markets, says Prof. Dimson, “is to provide diversification, not to add to returns.”.  (WSJ)
  Checking in on investor sentiment at week end.  (Trader’s Narrative, The [...]

• Friday links: Peak Finance
  abnormalreturns, July 24th, 2009 at 11:34 am, Comments: 0

  A Dow Theory buy signal.  (Investment Postcards)
  Post-rally where do we stand compared to previous bear markets?  (dshort)
  A closer look at the S&P 500/gold ratio.  (Buttonwood)
  After a rapid rise, some stock market skepticism.  (The Pragmatic Capitalist, Market Talk, Bespoke)
  Warren Buffett is now cleaning up on his position in Goldman preferred stock.  (DealBook)
  “The reach for yield is [...]

• Closing the loop
  abnormalreturns, July 24th, 2009 at 9:50 am, Comments: 0

  Investment newsletters have just about been around as long as there has been a stock market.  Although it is hard to believe, pre-Internet they were actually printed out, stuffed into envelopes and mailed to subscribers.  Investors then needed to trade (or not) the recommendations of the adviser.  One can see that there is both a [...]