How to succeed at long/short without really trying
| Nov 12th, 2009 | Filed under: Performance, Analytics & Metrics, Today's Post | By: AAA Staff |
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The number of true-tested, without-fail methods to tell which way stocks will go on any given trading day is as long as the Brooklyn Bridge.
From watching action in the post-trade overnight markets to measuring ticks in pre-trade market futures to gauging the depth, breadth and ‘vol’ of the Asian markets, there are many ways to skin that cat.
How successful they are is anyone’s guess (though certainly everyone would be rich if they were indeed successful). But a recent stab at measuring some U.S. lending spreads by some market watchers does appear to at least show whether or not the market is behaving rationally – and in turn provide a heads-up of sorts on when a particular sector is going to change course.
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Monitoring the implied interest rate on single stock futures can provide even more granularity.