Sunday, June 15, 2008

Money Flows and a Flow of Market Ideas

* Money Flowing Out of Stocks - The above chart shows how negative money flows (pink line) have been within the Dow 30 industrial stocks (blue line) since the start of May. The waning of negative flows was one factor alerting me to the March lows; the drying up of buying at the April/early May highs was a nice tell for the subsequent market weakness.

* Interesting Flow Observation - Some of the most negative money flows within the Dow universe over the last two weeks has been in XOM, a bit of a surprise given strength in oil prices. When we examine the price action in XOM, however, it's clear that it has underperformed oil overall. The money flows are so negative that they have me questioning the stock's prospects.

* A Look at the New Book - This post summarizes a few of the unique features of the coaching book I'm currently writing. What makes this interesting is that the structure, as well as content, of the text will be quite different from my other material.

* Gaps - Some worthwhile material on trading gaps from Quantifiable Edges.

* Nod of the Cap - Kudos to Charles Kirk on the performance of his recent stock picks. If that's not a blog that offers value, I don't know what is.

* Excellent Weekend Reading - Asian inflation, foreclosures, and trading perspectives from Linda Raschke are among Trader Mike's recent links. From Abnormal Returns, we have a number of market views and a look at rising short interest among commodity ETFs. The Big Picture passes along a look at the dynamics of the credit crisis. Paul Kedrosky looks at the views of T. Boone Pickens and the prospects for an oil price collapse. David Merkel offers his take on the oil markets and why he likes VLO.

* Still Showing Strength - Among the 40 stocks in my basket that are evenly drawn from eight S&P 500 sectors, several are showing positive technical strength despite the recent market downturn. These include: DIS, MCD, WMT, WAG, COP, AMGN, and CSCO.