Thursday, August 09, 2007

Ideas and Links for a Volatile Thursday

* A Market of Reversals - We had downside range breakouts on 8/3 and 8/6 that were sharply reversed, then an upside breakout on 8/8 that we reversed hard today. Meanwhile, recount all the (volatile) market movement during the last ten trading session and consider that every one of those trading days but one traded between 1467 and 1470 in the ES futures at some point during the regular trading session. The trend has simply not been the trader's friend during this period. Meanwhile, Adam nicely illustrates the explosion of volatility in the market indices themselves.

* Interesting Observation - Trader Mike finds bullish on-balance volume (OBV) patterns for the major stock indices.

* Global Credit Squeeze - Excellent graphic from WSJ passed along by Todd Chalem shows how the credit crunch has taken on global dimensions. Abnormal Returns documents some of the resulting damage.

* Historical Perspective on Market Declines - Roger Nusbaum and Seeking Alpha take out the almanac and find plenty of precedent for normal, large market declines.

* World Wide Economic Calendar - Here's a nice resource from Daily FX: A listing of economic reports due out each day around the world.

* Is It Trading, Or Is It Gambling? - A thoughtful essay from InvestorGuide looks at the differences--and similarities--between the two. My take? Self-control is an important differentiating element.

* Playing Defense in a Weak Market - The defense stock sector ($DFX) has held up well overall during this decline, despite today's drop. James Altucher and StockPickr offer some bull plays that won't be affected by mortgage concerns.