Trader’s Narrative

Today’s market weakness isn’t surprising when you consider that the S&P 500 has had a very difficult time getting above the simple 50 day moving average:

The blue line is the 50 day moving average and the lower line is the distance between the index and the average.
I don’t know if the third uptrend break […]

After writing that Madoff offers the biggest due diligence lesson for investors, some argued that the red flags are only obvious in hindsight and wouldn’t have been if so clear if one had to make the decision before Bernard’s admission of running a Ponzi scheme.
To be generous, I’ve assumed that the whole nature of the […]

The Federal Reserve made a bold move and lowered rates effectively to zero. Here’s the full statement:
The Federal Open Market Committee decided today to establish a target range for the federal funds rate of 0 to 1/4 percent.
The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and […]

As this annus horribilis draws to a close, we are left ducking shoe after shoe that drops or is flung at us. But this year’s abysmal performance has a silver lining. It offers a sumptuous buffet for those who finish off the year with a play on the January effect.
For the novice, this is the […]

Due diligence has many meanings depending on context. If you pressed me for a definition within finance, I would say it is:
The process of investigation undertaken by an party to gather material information on actual or potential risks involved in a financial transaction or relationship.
If you suffered losses as a result of Madoff’s fraud, then […]