Thursday, May 01, 2008

Thursday Thoughts

* Parallel Paths - Stocks (SPY) and 10-year Treasury rates ($TNX) have taken a very similar path during this period of market weakness. On the heels of the Fed announcement, stocks attempted to move to new highs, only to fall back into their long-term trading range. Meanwhile, 10-year rates couldn't make it to new highs and also fell back, revealing a bit of return to the safety trade. In response to the Fed announcement, it appears that concerns over economic weakness have taken priority over concerns regarding inflation.

* New Highs Continue to Stall - Despite the jump in stocks immediately following the Fed announcement, which took the major averages to multi-month highs, the number of stocks registering fresh 20-day highs continued to lag. We had 1346 new highs across the NYSE, NASDAQ, and ASE, against 587 new lows. If we just limit the count to common stocks traded on the NYSE, we had only 40 new highs against 18 lows. That is well below the 100+ new highs registered two weeks ago.

* Lots of Good Reads - Kirk takes a look at sovereign wealth fund dominance, the next bubble, frontier investment, and more. Trader Mike recaps an anticlimactic Fed day and Abnormal Returns tracks weak housing, the Fed model, the VIX, and quite a few other themes. The Big Picture displays one big picture when it comes to food inflation.

* Tomorrow's Post - Will highlight strategies that traders can take to enhance their self-control. As I write the new book, I increasingly realize that traders need concrete methods to coach themselves for success. I'll be emphasizing those "how-to's" in the blog as well.

* Quotables - Sharp Brains offers favorite quotes from neuroscience interviews, many of which pertain to the role of the brain in performance.

* Nice Resources - TickerLog offers a structured way to keep trading journals online. StockTickr turns journaling into a social process. Check out the Stock Market Beat on the NewsFlashr site, filtering top news stories for traders.