S&P500 - Analysis and Trading

[Joules MM1]

Re: S&P 500

The Winners Curse: Too Big to Succeed?

Robert D. Arnott

Research Affiliates, LLC

Lillian Jing Wu

University of California, Los Angeles - Anderson School of Business

June 20, 2012

Abstract:
Much ink has been spilled on the perils of allowing some companies to become “too big to fail.” This assumes that governments, hence taxpayers, must foot the bill when these Top Dogs become seriously ill, while reinforcing a view that the Top Dogs, whose failure might do systemic damage, should be heavily regulated to mitigate the damage that they might cause. The flip side of this view receives scant attention: companies can become “too big to succeed.”

Indeed, the “too big to fail” ethos may create headwinds for these self-same companies that can impede their continuing success. When you are #1, you have a bright bull’s-eye painted on your back. Governments and pundits are gunning for you. Competitors and resentful customers are gunning for you. Indeed, in a world of fierce competition and serial witch hunts in the halls of government, that target is probably painted on your front and sides too. In a world that generally roots for the underdog, hardly anyone outside of your own enterprise is cheering for you to rise from world-beating success to still-loftier success.

For investors, Top Dog status ”” the #1 company, by market capitalization, in each sector or market ”” is dismayingly unattractive. We find a statistically significant tendency for top companies in each sector to underperform both the overall sector and the stock market as a whole. In an earlier U.S.-only study, we found that 59% of these Top Dogs underperformed their own sector in the next year, and two-thirds lagged their sector over the next decade. We found a daunting magnitude of average underperformance, averaging between 300 and 400 bps per year, over the next 1 to 10 years.

In this study, we have broadened the test to examine whether the “Top Dog” phenomenon is prevalent elsewhere. We find the same phenomenon in each and every market, with no exceptions. Indeed, outside the United States, the Sector Top Dogs generally underperform their own sector even more relentlessly than in the United States!

It would appear that our Top Dogs, the most beloved and winningest companies in each sector or country, are typically punished ”” often severely ”” in subsequent market action.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2088515

 

[Timmy]

Re: S&P Analysis

Roger Waters - The Wall Live HD - Part 1: youtu.be/eTHYvprDuaE via @youtube

:cussing:

 

[Joules MM1]

Re: S&P Analysis

:cussing:

lulz......

something something, cup of tea.......

something something, did you figure that one out all by yourself

Fari

 

[Joules MM1]

Re: S&P Analysis

thus far the H/S pattern continues to play out......nice.......i'm finding ti hard to short but very easy to ride long...suspect this'll keep up for a few days

 

[Timmy]

Re: S&P Analysis

lulz......

something something, cup of tea.......

something something, did you figure that one out all by yourself

Fari

.

 

[Timmy]

Re: S&P Analysis

thus far the H/S pattern continues to play out......nice.......i'm finding ti hard to short but very easy to ride long...suspect this'll keep up for a few days

Yep. Up has been a hot knife through butter so far this morning.

Positive reactions to the European tape bombs yesterday carrying on today.

 

[Joules MM1]

Re: S&P Analysis

ETF comparison tool

http://etfdb.com/compare/

 

[Timmy]

Re: S&P Analysis

Anyone taking a holiday?

CME:

More details & for different products:
http://www.google.com.au/url?sa=t&r...sg=AFQjCNH5KhVf8gaLKuFndeOX3Ca4JSA4gA&cad=rja

NYSE closed July 4 (Duh...)

 

[Joules MM1]

Re: S&P Analysis

twitness

Walter Murphy ‏@waltergmurphy

More AAII bears than bulls for 8 straight weeks. That's the longest string since March 2009 (!)

added to gold short.....subs going down admiral.....

reminds me.....something something, one more ping, Vasilliev

 

[CanOz]

Re: S&P Analysis

ObamaCare:

Supreme Court upholds Healthcare Mandate

CanOz

 

[Timmy]

Re: S&P Analysis

ObamaCare:



CanOz

Tks Can.

The reporting was a dog's breakfast.
All over the place.
Plenty don't seem to understand what dissenting opinion is and reported these as the actual decision (maybe talking their book though, who knows).

Pain's me to type this but
Zero Hedge were spot on correct and fastest with their headline (on my Twitter feed).

Grrrr ... Acknowledging ZH ... goes against one of my most deeply held biases.
Lucky I have plenty of others to fall back on

...

Well, thats sorted.
Can we now just get back to European Armageddon/No, everything's fine/Armageddon/No, everything's fine/Armageddon/No, everything's fine/Armageddon/No, everything's fine/ ...?

 

[Joules MM1]

Re: S&P Analysis

thus far the H/S pattern continues to play out......nice.......i'm finding ti hard to short but very easy to ride long...suspect this'll keep up for a few days

tricky bidders held off till the last moment near the lowest point......added to longs spx and riding the thin-bladed horse.....

 

[Joules MM1]

Re: S&P Analysis

while we are in quiet mode awaiting juggernaut hsi to open let's have a gander at today contrarian pic of the day



2 out of 3 is ok..... ??

 

[CanOz]

Re: S&P Analysis

Well Done Joules, 3 out of 3 for me....2 of my all time favorite Economists and girls in Bikinis!!!


CanOz

 

[Joules MM1]

Re: S&P Analysis

tricky bidders held off till the last moment near the lowest point......added to longs spx and riding the thin-bladed horse.....

one encouraging view was the SML which remained in a bullish mode relative to the rest of the majors so this tended to back the idea of the inverse HS on the SPX.......

also, the DJIND was at a deeper reacher than the SPX ......in toto, the lesser reach downside the beta stocks, like the SML, the more likely that a swing is in the making and a prompt to play against the weak presentation
http://bigcharts.marketwatch.com/advchart/frames/frames.asp?show=&insttype=Index&symb=sml&time=3&startdate=1%2F4%2F1999&enddate=3%2F4%2F2011&freq=6&compidx=aaaaa%3A0&comptemptext=&comp=none&ma=1&maval=12&uf=0&lf=1&lf2=0&lf3=0&type=4&style=320&size=4&x=33&y=13&timeFrameToggle=false&compareToToggle=false&indicatorsToggle=false&chartStyleToggle=false&state=11

and a nice postscript look by Hamzei Analytics

http://a.yfrog.com/img532/2505/bkeg.png

 

[Joules MM1]

Re: S&P Analysis

understatement?

Breadth showing favor to the bulls: $study
June 29, 2012
By redliontrader

http://www.redliontrader.com/40-dma...dy/?utm_source=twitterfeed&utm_medium=twitter

 

[Joules MM1]

Re: S&P 500


Europe Provides a Nice Rally. Meanwhile, In the Real Economy …

by Sean Brodrick on June 29, 2012

excerpt

If you’re a regular reader, you know that I follow Citigroup’s Economic Surprise Index. I like it because it compares actual economic data to analyst’s expectations. And what Citigroups ESI is showing is that actual economic data is really disappointing, all over the world …

 

[Joules MM1]

Re: S&P Analysis

head and shoulders looks secure enough and validated with momo.......

Walter Murphy ‏@waltergmurphy

Now only 2 of 10 SPDRs on a P&F sell as $XLE & $XLI reversed to a buy. All 10 were up for June, but only 3 were up for the qtr.

 

[Joules MM1]

Re: S&P Analysis

Walter Murphy ‏@waltergmurphy

The NYSE all-issue cumulative a-d line closed at an all-time high today. But the common stock a-d line is well shy of its own new high.

Worst Volume In A Decade As Stocks Eke Out Small Gain
Tyler Durden on 07/02/2012 16:27 -0400
http://www.zerohedge.com/news/worst-volume-decade-stocks-eke-out-small-gain

 

[Joules MM1]

Re: S&P Analysis

if playing this fridays NFP or want to get a profile on ISM's etc this video is worth the time......skip the first 10 mins on euro and go to the charts......Shraf Laidi via HAmzei analytics.....it's a cheerful look.....

nice comparisons between the services now and 07/08

http://eduwebs.hamzeianalytics.com/GC_AL_FH_070212.wmv