Investing Research

Banking In 2015 And Beyond: The Liquidity Coverage Ratio

My next few articles will look at banking and Basel III implications for banks. In this one, we will focus on the Liquidity Coverage Ratio, also known as the Bear Stearns Rule (although it could equally well be called the Lehman Bros. Rule). The basic principle is that a bank has sufficient liquid assets (of a high quality) to offset net cash outflows under a 30 day stress scenario. Since

One Last Farewell To The SPY January Trading Range

Late last year, the markets began to show some signs of weakness. Cracks were showing up under the surface, investor sentiment was getting frothy, and volatility was back en vogue. All signs of caution. With this in mind, it shouldn’t be too surprising that the stock market decided shake, rattle, and roll in January. But what was even wilder, was that the equity market’s turning points throughout the month created

Top Trading Links: Avoiding Market Underperformance

There are some pretty interesting anomalies occurring in the financial markets these days. It seems like each week a new and unexpected theme emerges that traders should be aware of. In this week’s Top Trading Links, we’ll take a closer look at some trading studies while highlighting ways to avoid market underperformance as an investor. Let’s get to it! Market Insights We’re in rarified air as the S&P 500 yields more

S&P 500 Update: Market Levels And Indicators To Watch

The S&P 500 (SPX) recovered nicely off the lows made this morning (1989.18). After spending much of the morning in negative territory, stocks rallied with strength in the afternoon, with SPX volume running slightly above average. BUT it’s also worth noting that this type of action fits in with the bigger picture market “chop” that we’ve seen for the past two months. The move to the downside this morning offered a risk-defined trading

London’s FTSE 100: Battling 15 year Resistance Level

With London’s FTSE 100 Index, the current price area has stood as particularly durable resistance for more than a decade. We are watching to see whether the index can leave a lower high at the start of 2015. The FTSE includes the top 100 stocks on the London Stock Exchange based on market capitalization. Together, the 100 companies represent more than 80% of the market capitalization of the entire exchange.

Bearish Continuation Patterns Emerge In Energy Sector (XLE)

Energy stocks had an awful Wednesday with the Energy Select Sector SPDR (XLE) losing 3%. What’s surprising is the ETF didn’t even test the falling 50 day moving average. Generally sellers wait for a test of the moving average when it’s so close by, but they couldn’t wait to sell the ETF and its several underlying energy stocks today. Several charts of key stocks within the energy sector are emerging with bearish

Rare Territory: The US Dollar Towers Above Its 200 Day SMA

The US Dollar Index turned vertical into 2015, touching as high as 95.86 over the past week. But the recent rise has also pushed the US Dollar Index to one of the highest levels above its 200 day simple moving average in the past 30 years. This is truly rare territory for the US Dollar. Can anything cool it off? Well, it just so happens that this unheard of strength has propelled the

Sector Relative Strength Check: 2015 Leaders and Laggards

Measuring sector relative strength can be a great way to gather information about emerging trends within the market. And building a mosaic from various sectors really compounds the information they offer. This information allows us to get a pretty good sense for the state of the market. Let’s give it a whirl. The market leading group continues to be the Biotech Sector (IBB) as its relative strength to the S&P 500

3 Charts That Point To Exhaustion For Dollar Rally

The U.S. Dollar Index has been on a tear since last year, rising nearly 21 percent since the rally began. I recall speaking to many technicians and market participants that were fighting the strength just as the dollar rally was getting started back in the 3re quarter of 2014. I personally think we may be in the beginning stages of a larger dollar rally but some of the indicators and charts that I’m

Consumer Discretionary ETF (XLY) Looms Large This Week

After a strong showing in 2014, the Consumer Discretionary ETF (XLY) has churned sideways into early 2015. This type of price action would typically indicate consolidation, but considering the wide swings in 2014 and recent retail sales numbers for December (not good!), it’s clear that the Consumer Discretionary ETF is looking for direction. And whichever direction it takes, the stock market may follow. Here’s a few reasons why I have XLY on