Observations & Insight

Take One: Data and Fintech Rocking The Free World
By Jim Kharouf, John Lothian News

Over the past two years, market participants have bemoaned the monetization of data by the largest exchanges.

CME raised the ire of the trading community last year with the increased data fees, especially at a time when many in the trading community were hurting from new regulation requirements, more technology investments to meet those demands, and a generally lousy trading environment with not a lot of movement in key markets. And there is the ongoing grumbling of traders that it is they who create the prices, not the exchange, and without them, there wouldn’t be any data to sell at all.

But an interesting thing is now happening in the data world. It is being given away for free in various new and interesting ways. True, this end-of-day data, along with various other types of data that is packaged, is not realtime. But that too may be of less importance to a growing number of traders who have discovered that the pure speed game is more or less over and the revived game of trading strategy has reemerged with the rise of more flexible and accessible trading technology.

What is emerging are platforms such as Barchart Direct, which puts all its historical market data on the cloud; Quandl, a free storehouse of all types of financial data; and Estimize a free site for earnings and economic estimates – all of which are challenging the status quo of Thomson Reuters, Bloomberg and others. Meanwhile, even Trading Technologies is getting into the act, offering its customers free access to Fundamental Analytics.

Read the rest of this report here

Lead Stories

Bond-Market Volatility Triggers Alarms
Christopher Whittall And Katy Burne – NASDAQ
Regulators and government officials are becoming increasingly worried about rising volatility in government bond markets.
Federal Reserve and European Central Bank officials have publicly discussed the issue in recent weeks, and the head of the U.K.’s Debt Management Office raised the prospect that the swings could one day cause investors to balk at buying its bonds at auction.
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S&P 500 Rally Thins and It’s Worrying Market Analysts
Callie Bost – Bloomberg
Trouble is brewing in an indicator measuring how many companies are keeping the stock market aloft in the U.S., just as the Standard & Poor’s 500 Index threatens to give up gains for the year.
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Hedge funds up 3.9 percent through May, beat S&P 500 -data
Svea Herbst-Bayliss – Reuters
The average hedge fund inched up 0.72 percent in May and is up 3.89 percent for the year through the end of May, according to data released on Friday that show the funds outperforming the broader stock index.
Hedge funds specializing in health care and technology delivered some of the strongest gains, rising 3.54 percent in May, according to data from Hedge Fund Research. For the year they are up 8.50 percent.
The Standard & Poor’s 500 index has climbed 1.75 percent in the first five months of the year.
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Will Stocks from Mainland China Be Added to the MSCI Emerging Markets Index?
Matt Moran – CBOE Options Hub
A key topic for global investors today is whether Chinese A-Shares will be included in the popular MSCI Emerging Markets Index. Estimates suggest that about $1.7 trillion in assets track the popular index. CBOE offers a number of volatility and options products to help investors gauge and manage their global equity exposure.
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Volatility Index (VIX) Likely To Settle Dow Theory Debate
Paban Raj Pandey – See It Market
Much has been written about the severe underperformance of the Dow Jones Transports and select transportation stocks (vs the broader market). Is Dow Theory at play here? Will the Transports pull the market lower? Let’s scan the markets to get a better picture of what’s happening.
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Exchanges

CME to change grain sessions when open-outcry futures pits close
Tom Polansek – Reuters
CME Group Inc next month will end the long-running practice of allowing traders to square up positions in grain and oilseed futures during a short period after the markets close, the company said on Monday.
The change is set to take effect on July 6 in connection with CME’s closure on July 2 of most of its futures pits, including those for grains like corn and wheat, according to a notice sent to customers.
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Strategy

XIV And High-Beta Investments In Bull Markets – VelocityShares Daily Inverse VIX Short-Term ETN (NASDAQ:XIV)
Dane Van Domelen – Seeking Alpha
This morning, Chris DeMuth Jr. declared VelocityShares Daily Inverse VIX Short-Term ETN (NASDAQ:XIV) his #1 favorite “stock” in the world (really an ETN, as he noted). I read with interest as I currently hold both XIV and its Medium-Term counterpart, the VelocityShares Daily Inverse VIX Medium-Term ETN (NASDAQ:ZIV). The article highlighted XIV’s tremendous growth since inception in Nov. 2010, and discussed some theoretical reasons why XIV is a very favorable investment.
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The S&P 500 is approaching the ‘Zone of Death’
T. Erik Conley – MarketWatch
Like most investors who have been through a few market cycles, I try to stick to a few trading rules in order to avoid making dumb market-timing decisions:
Don’t fight the tape.
Don’t fight the Fed.
Don’t fight the business cycle.
And don’t get ahead of your indicators.
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How to Ride ‘The Next Great Volatility Pop’
Adam Warner – Schaeffer’s Investment Research
We’re getting closer to “distribution” time in AccuShares Spot CBOE VIX Fund Up Shares (VXUP) and AccuShares Spot CBOE VIX Fund Down Shares (VXDN), and that means we’re getting closer to seeing how VXUP resembles the CBOE Volatility Index (VIX) itself (the hope), as opposed to the iPath S&P 500 VIX Short-Term Futures ETN (VXX) (the fear).
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Education

11 Ways to Protect Yourself From a Summer Stock Market Sell-Off
Jon C. Ogg – 247wallst.com
It is now June, and the echoes of “sell in May and go away” are still ringing. In fact, the Dow Jones Industrial Average went negative for the year on June 8. With the bull market now more than six years old, and with equity valuations being high, at least some of the cautious investors are starting to worry that the market could be ready for a big tumble.
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