The changing face of market information

Blogging has become an important source of publishing, owing to its timeliness and ready availability. Print publications take hours or days for assembly and distribution; blogging can post information on the fly. As such, blogging is ideal for traders who follow the markets closely, as blog posts can be read within seconds of market-moving events.

How popular is blogging? The search engine Technorati tracks 52 million blogs worldwide. A total of 349 blogs followed by Technorati relate to "trading"; 78 specifically to "day trading" and 110 to "futures". If it took you only a minute to read each of the blogs devoted to "stocks", you'd be tied up for about 8 hours. That's one way to avoid daytrading!

Clearly there are more blogs out there than we can hope to follow regularly. Accordingly, I thought I'd pass along a few of the ones that I have found to be particularly worthwhile. These sites offer four basic features:

1) Frequently updated content -- at least daily;

2) Unique content -- fresh perspectives on markets, the economy, stocks, trading, etc.

3) Knowledgeable content -- information based on clear reasoning, research, and experience.

4) Participation in the blogger community -- linking content to broader material in the blogosphere and on the Web for enhanced depth of coverage.

What do these criteria eliminate? They filter out blogs that are mainly personal trading journals, and avoid blogs that have a primarily commercial or promotional focus. This isn't to say that these blogs are without value; it's just that you're less likely to find important strategic insights there. The blogs I find of greatest value fall into four categories: research blogs, global/macro blogs, trading blogs, and aggregator blogs. Let's look at a few examples of each:

Research Blogs

I started my TraderFeed blog because I detected a shortage of practical, trading-oriented, original research on the Web. The focus of TraderFeed is historical analysis: I look at what the market is doing at present (for instance, making a five-day high with volume highly concentrated in advancing stocks) and then go back into history to see what has happened in the past when the market has been at a similar juncture. Often, such analyses detect edges to the next several days' trade that can be useful in formulating trade ideas. TraderFeed also offers morning updates of the S&P 500 index market, to see if the AM trade is following up on those historical tendencies.

A different kind of research blog is offered by CXO Advisory Group. There you'll find research pertaining to everything from behavioral finance to seasonal calendar effects in trading to market models based on earnings yields and returns to value. The site links to primary research sources, but also reports original findings. A recent example of their work was a look at whether sentiment in the financial news predicts future stock returns.

Still another research-oriented blog is Abnormal Returns. This site offers a variety of links to primary sources of information and also reports on significant research in the trading world. For instance, their recent Research Roundup featured a number of links to sources of quantitative insight into the markets. There are several sources of blog links that I particularly trust and value; this is one of them.

Finally, a very interesting research blog is Ticker Sense, which is published by Birinyi Associates, Inc. A recent feature is a sentiment poll of market bloggers. I'm a participant, so there's hope that the poll will be an excellent contrary indicator! In addition, TickerSense reports on economic events, sector development, and original studies of market performance.

Global/Macro Blogs

This category includes blogs that cover a variety of asset class and trading markets worldwide. One of my favorites is The Big Picture, written by Barry Ritholtz. He covers everything from the economy to geopolitics to trading strategy. A recent focus has been the housing market and implications for the economy and stocks. His "Apprenticed Investor" series models how to think about markets, drawing upon his experience as a professional money manager.

Another very stimulating site is from Random Roger (aka Roger Nusbaum), who similarly brings a portfolio manager's perspective to his blog. Roger covers housing, foreign markets,oil, interest rates--just about anything that affects markets. Recently, he has been posting on ETFs. He, too, models a way of thinking about markets and tries to educate readers even if they don't agree with his conclusions.

Straddling the line between trading blog and global/macro blog is Tom Lydon's ETF Trends site. He covers the broad universe of ETFs--an important and growing area of investment, given the movement of exchange traded funds into the precious metals, currency, interest rate, and energy markets. A recent post covered a housing ETF that allows traders to hedge the value of their homes. Recently, Tom has been adding guest contributors to the site, adding a variety of perspectives.

Another global/macro blogger with an interest in teaching traders how to think about markets is Bill Cara. Oil, mining, housing--Bill tracks all of it and closely follows the performance of market sectors. Also part of his site are longer educational articles on such topics as fixed income, technical and fundamental analysis, economics, gold, and international equities. He describes the site as "a virtual community of students-of-the-market united by their commitment to the pursuit and sharing of knowledge."

Trading Blogs

These are the blogs that talk shop: traders talking to traders about stocks to buy/sell, what the market is doing, how to manage risk, etc. One of my daily reads is Charles Kirk's blog, The Kirk Report, a site that goes the extra mile to dig up interesting links to news items, blog entries, and topics relevant to markets and the economy. His "Members" section posts lists of stocks matching screening criteria and offers detailed Q&A each month. A recent interview with Laszlo Birinyi was particularly memorable.

Another daily read is Mike Seneadza's Trader Mike blog. He very effectively links to a variety of blogs and news sites, emphasizing trading-related topics. His annotated charts allow traders to see markets through his eyes and more than once have given me trade ideas. He summarizes major market trends in his market recaps and offers watchlists of stocks for daytrading based on his trading philosophy.

Adam Warner offers one of the few blogs for options traders, and it is regularly updated with a variety of perspectives on markets, trading, and sports. His perspectives on volatility are unique, and he writes in an engaging and thought-provoking manner. Recent topics have included put/call ratios, calendar spreads, and deep call buying.

Most blogs are written productions with a splash of graphics. Brian Shannon's Alpha Trends blog, however, utilizes video to provide daily summaries of the technical conditions of equity markets. What I like about Alpha Trends is that it is a kind of teaching tool: Brian explains what he's seeing in the markets, illustrates it in the videos, and explains what it means. He selects individual stocks for analysis, providing daily trade ideas, and covers multiple time frames in his analyses.

Aggregator Blogs

These are blogs of blogs: sites that summarize and organize a large amount of information across a variety of blogs. Perhaps the best known is Seeking Alpha, which organizes articles by topic, including different international markets (China, Japan, India) and sectors (telecom, biotech, retail). Other categories include long ideas, short ideas, and market overviews. It's an excellent way to stay on top of the online financial press.

The Stockblogs site focuses exclusively on market-related blogs and categorizes these by content. These categories include general market, technical analysis, fundamental analysis, options, and commodities. It's an excellent introduction to the market blogging world; the blog of the week feature is a good way to discover new blogs.

There are many more fine sites that are worthy of mention. These include the Trader X site, which does an unusually good job of outlining an interesting and successful trading approach. Billing itself as "views from a distorted mind", it certainly meets with my approval. (I am listening to Ministry's "Every Day is Halloween" as I type this--honest). MaoXian's site offers excellent coverage of stocks, tracking issues making new highs, ETF performance, and interesting charts. The blog at the StockTickr site includes interviews with experienced traders and bloggers--a kind of online "Market Wizards" facilitated by Dave Mabe. The folks at Trade Ideas have created an informative blog that helps users get the most of their market screening software (keep an eye on that blog for a new development that will integrate screening and market research).

It is a testament to the free market of ideas that so many excellent sources of information have come to the fore in just the past couple of years. Bloggers receive comments on their work every day from readers, providing immediate feedback on what is helpful, what is not; what is needed and what is superfluous. As a result, the best blogs evolve over time, becoming ever better at meeting traders' needs. Blogging is truly the Open Source of market information, the result of creativity and initiative unleashed by technology unimagined in decades past.

Brett N. Steenbarger, Ph.D. is Associate Clinical Professor of Psychiatry and Behavioral Sciences at SUNY Upstate Medical University in Syracuse, NY and author of The Psychology of Trading (Wiley, 2003). As Director of Trader Development for Kingstree Trading, LLC in Chicago, he has mentored numerous professional traders and coordinated a training program for traders. An active trader of the stock indexes, Brett utilizes statistically-based pattern recognition for intraday trading. Brett does not offer commercial services to traders, but maintains an archive of articles and a trading blog at www.brettsteenbarger.com and a blog of market analytics at www.traderfeed.blogspot.com. His book, Enhancing Trader Performance, is due for publication this fall (Wiley).