The changing face of market information
Blogging has become an important source of
publishing, owing to its timeliness and ready availability. Print publications
take hours or days for assembly and distribution; blogging can post information
on the fly. As such, blogging is ideal for traders who follow the markets
closely, as blog posts can be read within seconds of market-moving events.
How popular is blogging? The search engine
Technorati tracks 52 million blogs worldwide. A total of 349 blogs followed by
Technorati relate to “trading”; 78 specifically to “day trading” and 110 to
“futures”. If it took you only a minute to read each of the blogs devoted to
“stocks”, you’d be tied up for about 8 hours. That’s one way to avoid
daytrading!
Clearly there are more blogs out there than we
can hope to follow regularly. Accordingly, I thought I’d pass along a few of
the ones that I have found to be particularly worthwhile. These sites offer
four basic features:
1) Frequently updated content — at least
daily;
2) Unique content — fresh perspectives on
markets, the economy, stocks, trading, etc.
3) Knowledgeable content — information
based on clear reasoning, research, and experience.
4) Participation in the blogger community
— linking content to broader material in the blogosphere and on the Web for
enhanced depth of coverage.
What do these criteria eliminate? They filter
out blogs that are mainly personal trading journals, and avoid blogs that have a
primarily commercial or promotional focus. This isn’t to say that these blogs
are without value; it’s just that you’re less likely to find important strategic
insights there. The blogs I find of greatest value fall into four categories:
research blogs, global/macro blogs, trading blogs, and aggregator blogs. Let’s
look at a few examples of each:
Research Blogs
I started my
TraderFeed blog because I
detected a shortage of practical, trading-oriented, original research on the
Web. The focus of TraderFeed is historical analysis: I look at what the market
is doing at present (for instance, making a five-day high with volume highly
concentrated in advancing stocks) and then go back into history to see what has
happened in the past when the market has been at a similar juncture. Often,
such analyses detect edges to the next several days’ trade that can be useful in
formulating trade ideas. TraderFeed also offers morning updates of the S&P 500
index market, to see if the AM trade is following up on those historical
tendencies.
A different kind of research blog is offered by
CXO Advisory Group. There you’ll
find research pertaining to everything from behavioral finance to seasonal
calendar effects in trading to market models based on earnings yields and
returns to value. The site links to primary research sources, but also reports
original findings. A recent example of their work was a look at whether
sentiment in the
financial news predicts future stock returns.
Still another research-oriented blog is
Abnormal Returns. This site
offers a variety of links to primary sources of information and also reports on
significant research in the trading world. For instance, their recent
Research Roundup featured a number of links to sources of quantitative
insight into the markets. There are several sources of blog links that I
particularly trust and value; this is one of them.
Finally, a very interesting research blog is
Ticker Sense, which is published
by Birinyi Associates, Inc. A recent feature is a sentiment
poll of market bloggers. I’m a participant, so there’s hope that the poll
will be an excellent contrary indicator! In addition, TickerSense reports on
economic events, sector development, and original studies of market
performance.
Global/Macro Blogs
This category includes blogs that cover a variety
of asset class and trading markets worldwide. One of my favorites is
The Big Picture, written by Barry
Ritholtz. He covers everything from the economy to geopolitics to trading
strategy. A recent focus has been
the housing market and implications for the economy and stocks. His
“Apprenticed Investor” series models how to think about markets, drawing upon
his experience as a professional money manager.
Another very stimulating site is from
Random Roger (aka Roger Nusbaum),
who similarly brings a portfolio manager’s perspective to his blog. Roger
covers housing, foreign markets,oil, interest rates–just about anything that
affects markets. Recently, he has been
posting on
ETFs. He, too, models a way of thinking about markets and tries to educate
readers even if they don’t agree with his conclusions.
Straddling the line between trading blog and
global/macro blog is Tom Lydon’s ETF Trends
site. He covers the broad universe of ETFs–an important and growing area
of investment, given the movement of exchange traded funds into the precious
metals, currency, interest rate, and energy markets. A recent post covered a
housing ETF that allows traders to
hedge the value
of their homes. Recently, Tom has been adding guest contributors to the
site, adding a variety of perspectives.
Another global/macro blogger with an interest in
teaching traders how to think about markets is
Bill Cara. Oil, mining, housing–Bill
tracks all of it and closely follows the performance of market sectors. Also
part of his site are longer educational articles on such topics as fixed income,
technical and fundamental analysis, economics, gold, and international
equities. He describes the site as
“a virtual community of students-of-the-market united by their commitment to the
pursuit and sharing of knowledge.”
Trading Blogs
These are the blogs that talk shop: traders
talking to traders about stocks to buy/sell, what the market is doing, how to
manage risk, etc. One of my daily reads is
Charles Kirk’s blog,
The Kirk Report, a site that goes the
extra mile to dig up interesting links to news items, blog entries, and topics
relevant to markets and the economy. His “Members” section posts lists of
stocks matching screening criteria and offers detailed Q&A each month. A recent
interview with Laszlo Birinyi was particularly memorable.
Another daily read is Mike Seneadza’s
Trader Mike blog. He very effectively
links to a variety of blogs and news sites, emphasizing trading-related topics.
His annotated charts allow traders to see markets through his eyes and more than
once have given me trade ideas. He summarizes major market trends in his market
recaps and offers watchlists of stocks for daytrading based on
his trading
philosophy.
Adam Warner offers
one of the few blogs for options
traders, and it is regularly updated with a variety of perspectives on
markets, trading, and sports. His perspectives on volatility are unique, and he
writes in an engaging and thought-provoking manner. Recent topics have included
put/call ratios, calendar spreads, and
deep call
buying.
Most blogs are written productions with a splash
of graphics. Brian Shannon’s
Alpha Trends blog, however, utilizes video to provide daily summaries of the
technical conditions of equity markets. What I like about Alpha Trends is that
it is a kind of teaching tool: Brian explains what he’s seeing in the markets,
illustrates it in the videos, and explains what it means. He selects individual
stocks for analysis, providing daily trade ideas, and
covers multiple time frames in his analyses.
Aggregator Blogs
These are blogs of blogs: sites that summarize
and organize a large amount of information across a variety of blogs. Perhaps
the best known is Seeking Alpha, which
organizes articles by topic, including different international markets (China,
Japan, India) and sectors (telecom, biotech, retail). Other categories include
long ideas, short ideas, and market overviews. It’s an excellent way to stay on
top of the online financial press.
The
Stockblogs site focuses exclusively on market-related
blogs and categorizes these by content. These categories include general
market, technical analysis, fundamental analysis, options, and commodities.
It’s an excellent introduction to the market blogging world; the blog of the
week feature is a good way to discover new blogs.
There are many more fine sites that are worthy of
mention. These include the Trader X site,
which does an unusually good job of outlining an interesting and successful
trading approach. Billing itself as “views from a distorted mind”, it certainly
meets with my approval. (I am listening to Ministry’s “Every Day is Halloween”
as I type this–honest). MaoXian’s site
offers excellent coverage of stocks, tracking issues making new highs, ETF
performance, and interesting charts. The
blog at the StockTickr site includes interviews with experienced traders and
bloggers–a kind of online “Market Wizards” facilitated by Dave Mabe. The folks
at Trade Ideas have created an
informative blog that helps users get the most of their market screening
software (keep an eye on that blog for
a new development that will integrate screening and market research).
It is a testament to the free market of ideas
that so many excellent sources of information have come to the fore in just the
past couple of years. Bloggers receive comments on their work every day from
readers, providing immediate feedback on what is helpful, what is not; what is
needed and what is superfluous. As a result, the best blogs evolve over time,
becoming ever better at meeting traders’ needs. Blogging is truly the Open
Source of market information, the result of creativity and initiative unleashed
by technology unimagined in decades past.
Brett N. Steenbarger, Ph.D. is Associate
Clinical Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical
University in Syracuse, NY and author of
The Psychology of Trading (Wiley, 2003). As Director of Trader
Development for Kingstree Trading, LLC in Chicago, he has mentored numerous
professional traders and coordinated a training program for traders. An active
trader of the stock indexes, Brett utilizes statistically-based pattern
recognition for intraday trading. Brett does not offer commercial services to
traders, but maintains an archive of articles and a trading blog at
www.brettsteenbarger.com and a
blog of market analytics at
www.traderfeed.blogspot.com. His book, Enhancing Trader Performance,
is due for publication this fall (Wiley).