Friday, September 26, 2008

Ideas and Inspirations at the End of a Volatile Week

* More On Risk Taking - My recent post focused on personality factors that are associated with risk-taking in financial situations. Studies also show that brain mechanisms and endocrine levels are associated with risk-seeking and risk-aversion. What is on a trader's mind at the time of decision making seems to affect the nature of the decision.

* Perspectives on the Financial Rescue Package - How the government responds to the credit crisis affecting the financial system will impact markets for quite a time to come. Charles Kirk offers a number of valuable links that will bring readers up to date; many of the impacts on markets are chronicled by Abnormal Returns. Trader Mike provides a number of worthwhile updates, including how everything is now affected by financial stocks and why this has been a difficult trading environment. As Dash of Insight notes, the political process is making passage of a plan difficult. Daily Options Report offers some good and tough questions about the rescue; Ray Barros questions the wishful thinking behind the rescue.

* Should We Stop Using Stops? - CXO Advisory reviews research on the effectiveness of stop loss mechanisms in trading.

* Overbought and Oversold - Bespoke offers a nice look, sector by sector, at whether stocks are overbought or oversold.