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...
Fired Up

Fired Up

  One great player can carry a team for a game. Maybe even a whole season. But the teams that win championships tend to have everybody contributing—and the same is true in the stock market. A narrow rally, where just a few giant stocks are doing the heavy...
Holding the Line

Holding the Line

  Supply and demand. It’s probably the oldest idea in economics. When buyers outnumber sellers, prices go up. When sellers outnumber buyers, prices fall. It’s intuitive enough that most people learned it long before they ever thought about investing. But here’s...
Expensive Ingredients

Expensive Ingredients

  When you want to know if the stock market is expensive, the obvious move is to look at the price-to-earnings ratio. You know, the so-called P/E Ratio. Divide today’s price by today’s earnings, and you’ve got a number. Simple enough. But there’s a problem:...