Friday links: divergence dilemma

Quote of the day

Erik Swarts, “(E)conomists typically make lousy trading decisions. ”  (Market Anthropology)

Chart of the day

GoldDivergence 550x420 Friday links:  divergence dilemma

Gold is diverging from the gold miners.  (The Money Go Round)

Markets

Chinese stocks and copper are selling off.  (Pragmatic Capitalism, Data Diary)

Another indicator that shows the divergence between large and small caps.  (All ETF)

Only ten ETFs are trading below their 50 day moving average.  (Bespoke)

The VIX/VXV ratio is particularly low at the moment.  (Quantifiable Edges)

More indications the stock market is overbought.  (Downtown Trader)

Are agricultural commodities finally rolling over?  (Stock Sage also research pix)

Strategy

A look at May seasonality.  (MarketSci Blog, ibid)

Aggregate earnings estimates work, until they don’t.  (Big Picture)

Divergences can resolve themselves in a couple of ways.  (Derek Hernquist, Dynamic Hedge)

A guide to the Nasdaq 100 rebalancing.  (IndexUniverse)

When ‘trading with the odds‘ doesn’t make sense.  (Trader Habits)

How well do markets incorporate demographic trends?  (Mark Hulbert)

Does Jeremy Grantham need to update his charts?  (Value Restoration Project)

How liquidity affects stock returns.  (SSRN)

Companies

Caterpillar (CAT) is rocking.  (Money Game, MarketBeat)

Microsoft (MSFT) is still losing money hand over fist online.  (SAI)

Berkshire Hathaway (BRKA) dodged a bullet when Sokol went bye-bye.  (Fortune)

Can Goodyear Tire (GT) keep it up in the face of higher raw material costs?  (Money Game)

Finance

LBO firms are having a tough time competing with cash-rich strategic buyers.  (Reuters)

Do we still need stock exchanges?  (Points and Figures)

The financial services industry is in flux.  (The Reformed Broker)

ETFs as a better mousetrap.  (World Beta)

WisdomTree is finally profitable.  (IndexUniverse)

Global

Would leaving the Euro be a “catastrophe” for the peripheral countries?  (Interfluidity)

Is the Australian housing market finally rolling over?  (MacroBusiness)

The Fed

Floyd Norris, “The Fed is caught in a bind, with inflation rising and growth perhaps slowing.”  (NYTimes)

Jeff Miller, “Market participants are much harder on Bernanke than mainstream sources.”  (A Dash of Insight)

The Fed takes tentative steps into the information age.  (Daniel Gross)

Long term inflation expectations remain well-anchored, for now.  (WSJ, The Source, The Street Light)

Economy

The Chicago PMI slows somewhat.  (Bloomberg)

Real personal income has a ways to get back to the previous peak.  (Calculated Risk)

The jobs picture in pictures.  (Calafia Beach Pundit, Real Tie Economics)

Americans are heading back out to restaurants.  (Calculated Risk)

Earlier on Abnormal Returns

Why your first blog posts are just not that good.  (Abnormal Returns)

What you missed in our Friday morning linkfest.  (Abnormal Returns)

Mixed media

Ten signs a company is mismanaged.  (Points and Figures)

Revisiting some up and coming financial blogs.  (The Reformed Broker)

An intersting talk with Horace Deidu and the real benefit of Asymco.  (5 by 5)

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