Monday, July 20, 2015

Broad Perspectives For A Summer Market Week

*  Above we see the daily average of 5, 20, and 100-day new highs versus new lows for all SPX stocks.  (Raw data from the ever-helpful Index Indicators site).  When this multiperiod breadth measure has been in its weakest quartile going back to 2014, the next five days in SPX have averaged a gain of +.64%.  All other occasions have averaged a gain of only +.05%.  Interestingly, when we look just two days out, the strongest breadth periods have led to an average gain of +.15% and the weakest periods have yielded an average gain of +.40%.  All other occasions have averaged a two-day loss of -.02%.  On short time horizons, returns have been a function of either strong upside momentum or mean reversion following broad weakness.  When trading price patterns, it helps to know the context in which they're occurring.

*  Management and leadership concepts don't just pertain to corporations; they are vital to the running of any trading business.  If there's no vision to running your business, you're running blind.  And if you're not running your trading like a business, do you really have any business trading?  

A broad array of  worthy reads from Abnormal Returns, including posts on health, fitness, and more.

*  Interesting post from Price Action Lab:  Why moving average systems lack intelligence.  It's tough to not find good reads via Quantocracy.

Great overview of the week ahead from Dash of Insight, including a look at how domestic stocks behave during times of international turmoil.

*  From NewTraderU: Character matters: how would you trade if you traded like a Boy Scout?

Have a great start to the market week!