Trimming the Hedges

Trimming the Hedges

  Hedge funds. You’ve probably heard of them before. But chances are you aren’t quite sure exactly what they do. Don’t worry, not many people do. And that’s by design. On the surface, a hedge fund is simply a professionally managed pool of money for wealthy...
The Universal Currency

The Universal Currency

  The author Vaclav Smil once said that “Energy is the only universal currency.” He’s right. To take it a step further, you might even say that energy, in the form of oil, is the lifeblood of industrial civilization. So, for this week’s indicator, let’s turn to...
Surprise, Surprise!

Surprise, Surprise!

  This week’s featured indicator is all about expectations. The stock market runs on expectations. It anticipates what is going to happen in the future and then prices it in today. That’s why surprises in economic data matter so much. Surprises move markets....
Put Your Money Where Your Mouth Is

Put Your Money Where Your Mouth Is

  This week’s indicator is all about options. Financial options, to be exact. The most common options investors use are Puts and Calls. A Call option gives you the right, but not the obligation, to buy a financial product at a set price by a certain date. A Put...
The Chicago Indicator

The Chicago Indicator

  Go with the flow, until it reaches an extreme. That’s the concept behind this week’s indicator. I like to call it the Chicago Indicator because it measures the Bulls / (Bulls + Bears) ratio. You know, because the two major sports teams in Chicago are the Bulls...
Pessimism Plunges

Pessimism Plunges

  Sentiment is one of the more interesting aspects of the market that we measure. It’s interesting because it tends to work in a contrarian manner, meaning high levels of optimism tend to be bad for future stock returns, and vice versa. Now, there are various...