Thursday, December 27, 2007

Bearish Stock Sentiment and Other Ideas for Thursday

* Bearish Sentiment on the Day - In a number of past posts, I've emphasized the value of the NYSE TICK as a measure of trader sentiment. This is because the TICK captures the moment to moment decision-making of traders to execute trades at the market offer vs. the bid. When a preponderance of stocks are transacting at the offer, we know that buyers are willing to pay up to own those issues. Conversely, when stocks are transacting at their bid prices, we know that sellers are sufficiently aggressive as to accept the bid price to get out of those issues. By cumulating the NYSE TICK values over the course of the day, we can detect the trend of sentiment. Notice how the weak day on Thursday was accompanied by consistent transacting of stocks at the market bid, leading to a downsloping cumulative TICK line. This helped keep short-term traders on the sell side through the day.

* Revising Beliefs - Traders need to have strong beliefs to enter and stay with trades, but they also need to be able to revise those beliefs to exit trades when necessary. Dr. Bruce Hong offers insight into changes of beliefs and behaviors.

* ETF Forecast - ETF Trends offers their predictions for 2008, including an interesting view of ETFs of ETFs.

* Link Update - Trader Mike once again finds worthwhile topics in his link updates, including business planning for traders and best blogs of 2007.

* Perspective on VIX Futures - Adam offers cautionary insights into a complex product.

* Top Stocks of 2007 - Chris Perruna looks back at the stocks most actively covered on his blog and finds a number of trending issues.

* Canadian Oil Sands and More - Larry Nusbaum offers a range of perspectives and links including a site that is a mini-Bloomberg.

* Global Liquidity - This interesting blog offers an unusual and very insightful 2007 review including thoughts re: checks and balances.