NewsFlashr Business Editor’s Picks for April 30 2009

Apr 30, 2009: 12:01 PM CST

Here are this week’s “Editor’s Picks” from the NewsFlashr Business Blog section:

Mish (Global Economic Analysis) shares some charts of various technical indicators which ’scream’ caution (bearishness) going forward in the market.

Stock Trading to Go shares an introduction to stock chart analysis, which can be used by primarily fundamental analysts as a ‘first step’ into charting: Understanding Technical Analysis, Reading Stock Charts

Very interesting thoughts from a Dash of Insight on the question, Does Blogging Enable Market Manipulation?

The Microcap Speculator shows that All of the original 3x ETFs down over the past six months. This echoes a similar argument I have that “…it’s not a function of a tracking error. Its a structural flaw in these instruments.”

Robert Salomon asks What Can be Made of the Stress Test Methodology?

“It’s interesting to note that while the Federal Reserve has been preventing the banks from falling off the cliff they seemed to have neglected their own balance sheet.” Grindstone Financial asks, “Is the Federal Reserve the next Lehman Bros?

A very interesting article from Bob’s Advice for Stocks on Building a Portfolio – Natural Selection or Intelligent Design

The Big Picture shares research on “Markets During Presidential First Terms.

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Comments
  • Guest

    Insightful read. I have stumbled and twittered this for my friends. Others no doubt will like it like I did.

  • Andrew Stanton

    I have a feeling those leveraged funds behave a lot like options. Not only do they move up & down based on the underlying but, as mentioned in the article, they are greatly affected by volatility and the forward price structure if it's a commodity. My guess is time also plays a big part since there is the constant expense of the hedging needed to keep the fund leveraged; the simplest example is GLD where over time you own less gold per share as the fund dilutes itself to pay expenses. Sometimes there is free money in new markets but only until the crowd catches on; read chapter 6, Made to Trade, in "Pit Bull" by Marty Schwartz.

  • Andrew,

    That's sort of the logic and research a local fund manager and I have been looking into as well. It honestly almost seems like free money ie too good to be true so that's why I keep wanting to research before putting it into practice. Fascinating stuff so far, for sure.

  • Andrew Stanton

    Interesting strategy in the comments section of The Microcap Speculator story about shorting the long and short 3x funds together. Wish there was more history to back test that.

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