Sunday, December 21, 2014

Fresh Views and Savvy Wisdom to Start the Market Week

*  The above chart tracks buying vs. selling programs executing in the stock market every minute of the day.  The underlying logic is that I take a basket of stocks and identify when they are upticking and downticking at the same moment.  This basket execution is only undertaken by institutional players, so tracking buying vs. selling baskets is a great way to gauge how institutional participants are leaning.  As you can see most recently, when we were making lows this past week, buying programs were already exceeding selling ones.  The rally since then has seen very strong buying interest from institutions, exceeding that in early October.  Note also how at the market highs in late November/early December sell programs began to outnumber buying ones.  This is an unusually valuable indicator, and I will be updating periodically.

Very useful end-of-year perspective from Barry Ritholtz on 10 basic principles for investors.

Great brain science links from Abnormal Returns, including redefining discipline in our childrearing.

*  One of the things I'm looking at is the relationship between message volume on Stock Twits, trading volume on the NYSE, and volatility in stock prices.  Here are the recent data on SPY.  I would expect superior returns during periods when message volume is highest.

*    Always excellent perspective from Howard Marks, this time on the oil drop and failure of imagination among investors.

Have a great start to the week--