* Money Flows Continue Supportive for Stocks - Above I've taken 40 highly weighted stocks within the S&P 500 Index evenly divided among the Materials, Industrials, Consumer Discretionary, Consumer Staples, Energy, Healthcare, Financial, and Technology sectors. The pink line is the raw money flows for those 40 stocks, plotted alongside the daily SPY closes going back to 2004. Note that flows shifted upward following the June/July 2006 lows. Despite recent corrective action, nothing to this point has happened to change this distribution. For a closer look at money flows in the Dow 30 stocks and implications for the market going forward, check out the updated Trading Psychology Weblog.
* Readings to Start the Week - Barry Ritholtz has assembled excellent links regarding the debt worries that just won't go away, including articles that are circulating among his hedge fund colleagues. The scenario of rising long-term rates and escalating housing defaults is a contagion scenario that concerns Bill Gross of PIMCO. Meanwhile, the BIS sees 1980-style Japan bubble in China's current market. Excellent articles for the market's Big Picture.
* Where is Volatility Coming From? - An excellent post from The Kingsland Report traces Friday's volatility to the meltdown in the subprime mortgage credit markets. A big issue is whether credit will tighten across the board in response, raising interest rates in a contagion response. Jeff Miller of A Dash of Insight adds his own perspective to the issue, including how it's affecting his own portfolio management. Mish sees this as a sea change, affecting investor appetite for credit and slowing the buyout boom.
* Where the Yields Are - Abnormal Returns starts the week off with several good readings, including a view of attractive municipal bond yields. See also the article on value investing and what's working in the current market.
* Need Still More Inspiration? - Millionaire Now! does a nice job of pulling together perspectives from across the blogosphere, ranging from stock picks to rules for investment success and how to outperform the market averages.