Monday, March 23, 2015

New Perspectives for a Market Monday

*  Above we see a chart of the total number of SPX stocks making 5, 20, and 100-day new highs vs. new lows each day.  Note the tendency of this multiperiod breadth measure to top ahead of price during intermediate-term market cycles.  The measure has remained strong recently.  Interestingly, going back to 2012, when the multiperiod measure has been positive (more stocks making new highs than lows), the next five days in SPX have averaged a gain of +.15%.  When the measure has been negative, the next five days in SPX have averaged a gain of +.71%.  Yet another example of how momentum trading (buying strength and selling weakness) has not worked for stock index traders in recent years.

Fascinating research on how we can live longer lives, which is also how we can live happier and more successful lives.  Very important topic:  sacrificing quality of life ends up sacrificing life.

*  Trading when you have a full-time job and other valuable insights from Abnormal Returns.

*  Great post from WindoTrader on the importance of preparation in the success of elite performers.

Interesting cross currents in the volatility market from Volatility Made Simple.

*  Crosshairs Trader on the psychology behind three types of traders.

Valuable trading lessons from SMB.

Have a great start to the week!