Posts filed under “Markets”

More on Post-Terror Market Responses

Yesterday, we cited a WSJ chart showing market reaction to prior terror attacks.

Today, there’s yet another informative chart in the Journal (below). Here’s a quick excerpt:

"Terrorism continues to make investors cringe and to weigh on their optimism. But money managers sought to reassure clients that, terrible as the London events were, experience showed that they weren’t likely to have a lasting impact on financial markets. Analysts produced data showing that, following the bombings in Madrid last a year, financial markets recovered within days.

Investor concerns now focus less on the loss of human life and more on whether terrorism will cause a lasting disruption to society. The overriding fear in the investment community, often unspoken, is something on the level of a biological attack or a dirty bomb — a bomb laced with radioactive materials that would render sections of a big city uninhabitable — or a large-scale attack like Sept. 11, 2001. When confronted with smaller-scale attacks, investors tend to panic initially and then gradually begin going about their business again."

That pretty much sums up the psychology. We can now get into a debate as to whether this is a sign of what some analysts are calling "Resiliency," or what others (i.e.,  Dick Arms) term "Complacency."

Here’s that WSJ chart on how the markets traded yesterday (their graphics department is truly superb).


click for larger graphic

Wsj_07072005224851
chart courtesy of WSJ

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Source:
Markets Shudder, Rebound Quickly
By DAVID REILLY in London, SUSANNE CRAIG in New York and MICHAEL R. SESIT in Paris
THE WALL STREET JOURNAL, July 8, 2005; Page C1
http://online.wsj.com/article/0,,SB112077849749680179,00.html

Category: Markets, Psychology

Post-Terror Market Responses

Category: Investing, Markets, Psychology, War/Defense

What I did over my Summer Vacation

Category: Markets

Stop Blaming Oil!

Category: Commodities, Investing, Markets, Psychology

Chart of the Week: % of NASDAQ Issues on MACD Buys

Category: Markets

Method to the Madness: Alpha Chasing Beta

Category: Investing, Markets, Trading

Apprenticed Investor: Tracking Elephants, Part I

Tscm_1The latest "Apprentice Investor" column is up at TheStreet.com. Its called  "Tracking Elephants, Part I." 

Don’t be fooled by the title to this piece: "Tracking the Elephants" could just have easily been named "The non Technicians Guide to Technical Analysis (in two parts)." The idea was to reveal to fundamentalists a few of the more significant ways they can use charts to improve their results.

Podcast:

Here’s the ubiquitous excerpt:

"Here’s an interesting question: If you could look at one and only one source before buying your next stock, which would you choose: a fundamental analyst’s report (with no charts in it), or the chart of your choosing?  While I like having access to both, I cannot ever imagine buying something without first looking at the chart.

And so we wade into the ongoing battle between technical and fundamental analysts. Frankly, it’s one of the sillier debates in investing. But I’ve heard so many bad arguments and misleading theories about technical analysis that I decided to weigh in."

Before we wade too deeply into the controversy, ask yourself: "Why do I need to choose?" Why wouldn’t you use any tool that can be shown to have value? You wouldn’t build a house using only a hammer, but no drills or saws. Why limit yourself away from a tool that can assist you as an investor?

In the column, I used a chart of Ford — but it could have been just about any company , from JDSU to Lucent to World Con or Enron.
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Ford’s Downtrend
click for larger graph

Fordaiannotated

Prior columns can be found here.

To keep the column a modest length, a discussion about Janus Funds
selling of AOL Time Warner was edited out.  For your reading
pleasure, that section is here.

Podcast:

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Category: Markets, Podcast, Technical Analysis

Why Politics Matters to Investors

Category: Markets, Politics

Will Rallying Oil Set a Bear Trap?

Category: Commodities, Markets, Psychology, Trading

Chart of the Week: Crude Oil at new Highs (6 Months)

Category: Commodities, Investing, Markets