Tag Archives: stock market

Why commodity prices are going to press even higher

26 May

The greater access and liquidity penetrating the commodity markets have significantly contributed to the upward momentum and speculation chasing natural resources and commodities. It is important to note that this speculation is not without cause. The secular bull market in commodities is what has captured this speculation. Commodities and natural resources account for 61% of total net assets allocated to ETF’s.  Trading commodities and natural resources were once restricted to specialists and large institutional money managers’. The removal of that barrier to entry has caused some seismic shifts and parabolic moves in a number of commodities. Changes in worldwide supply-demand dynamics, money printing and inflation, and weather induced factors have propelled prices even further. The greater access and liberal margin requirements in trading commodities is likely to induce a marked increase in volatility as has already been witnessed.

Commodities and natural resources are being driven higher by fundamentals. The challenge going forwards though is trying to capture upside without getting trapped in the merry-go-round.

Source: ICI 2011

Retail investors still absent from the stock market

26 May

Retail investor participation represented only 1.5% of total volume on the NYSE. There is no exact way to capture all retails trades but assessing Google Trends data across the prominent retail brokerages the metrics confirm the dwindling market participation. 

Sources: Google Trends and NYSE Market Data

Flash Crash 2.0 – Traders expect another repeat

8 May

Traders expect another repeat of a flash crash. Joe Saluzzi of Themis Trading has been on the ball with this and has been warning for many years (check out his excellent 60 Minutes piece). Goldman Sachs et al., momentum traders and the algos will inevitably further induce and compound volatility.  They are all sheltered behind the facade of liquidity provision.

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Bloomberg Quote of the Day 22-25 April 2011

28 Apr

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