Daily Reading – Friday, February 25, 2011

The Reformed Broker: Recipe for a Trading Blog

This is my great grandmother’s recipe – she blogged over at SeekingShelter back in the day, a site for stock-trading refugees headed to Ellis Island…

JESSE’S CAFÉ AMÉRICAIN: Silver Market Hit Hard With Bear Raid – The Infamous Dr. Evil Strategy

Large players can come into a relatively small market and drive the price by selling in size, running the stop loss orders which they often can ‘see’ through probing orders and positional advantage, and essentially bomb the market, manipulating the price in the short term to their advantage. The profit is made through derivative and correlated bets that depend on the price of the metal, index, or bond such as shorts on mining stocks, currencies, bonds, etc.

Macro Man: Is that a Pink Flamingo I See?

To that end we are expecting a lot of very crowded thematic trades to start unwinding if they have not done so already including – but not limited to the following.

The Big Picture: Soc Gen’s Economic Surprise Indicator

Alain Bokobza of the Société Générale Quant team, writes that their “Economic surprise indicator” suggests risky assets are now technically vulnerable…

The Big Picture: Crude Oil = $100

I assume that the middling US economy can absorb a few weeks or even months of elevated fuel prices in its current vulnerable state, but if fuel prices remain high for ore than a few months, it spells trouble.

FT Alphaville: Swinging on an oil VaR

Oil price volatility is no doubt producing ample trading opportunities for many in the market, but as of Friday it has become much more expensive to take advantage of them.

FT Alphaville: Libyan oil supply, and short-term whiplash

A confusing picture at the moment on measures to address the Libyan supply shortfall in the short term — even as Gaddafi’s end seems to be nearing, at last.

FT Alphaville: Oily shadows of 2008

What do over $100 per barrel oil prices really mean for the global economy?

According to Stephen King, chief economist at HSBC, the situation doesn’t bode well for the recovery at all.

The Slope Of Hope: AAII Sentiment Survey – Week Ending 2/22

WOW! Check out the reversals in market sentiment over the past week. The AAII report is through Tuesday so Libya would be “priced” in here. Still, the moves are massive. Bullish sentiment dropped to 36.6% from 46.6%. Bearish sentiment rose to 36.1% from 25.6%. Buying the dip may be out of favor for a period of time as fear has really crept back into the market.

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