Both commodity hedgers and speculators care about the shape of the futures curve and whether or not the commodity futures markets are contango or backwardation markets. Contango is when the price of a commodity is higher than the spot price…
Market breadth can provide important clues about what and importantly who is driving the market. A longstanding measure to evaluate the breadth of the market was created by Richard Arms going on 50 years ago. TRIN is short for TRading…
A stock is only worth what someone is willing to pay. Prices can always get cheaper, even for free falling stocks that you think will have value at some point. Let’s take a look at Twitter. Their stock has fallen from it $75 peak…
A seesaw visually represents the inverse relationship between interest rates and price. As interest rates rise, fixed income prices (e.g. bonds and notes) fall, and as fixed income prices rise interest rates fall. The Federal Reserve only has direct control over short…
Futures or commodities contracts offer investors and speculators a direct, highly leveraged vehicle to participate in the resource building blocks of the economy. Not long ago, limited market hours were less efficient with major price gaps up and down when…
A market assumption that makes life easier is to believe that liquid markets are fairly priced, that is, the wizards at Goldman Sachs would buy anything undervalued and sell anything overvalued to put things back in line. There may have been…
Portfolio puts are now in high demand even though markets were within striking distance of all time highs in the last few weeks. This preparation for a downturn can be viewed as a bullish contrarian indicator. Truth be told, the masses…
One of the advantages of the futures markets is the opportunity to trade at nearly 24 hours. Global inputs or news outside of normal stock market hours can be digested immediately in the highly traded stock index contracts on the S&P…
