Connors and Alvarez’s book, High Probability ETF Trading: 7 Professional Strategies to Improve Your ETF Trading, is published by The Connors Group and addressed to investors who want to trade their own ETF portfolio.

In the old days, there were tightly controlled banks which were allowed to take people's deposits and whose operations where limited to particular geographical areas. They were allowed to lend for the short-term.

Then there were investment banks which were allowed to do many other things but they were general partnerships - all the partners had most of their wealth tied up in the bank and at risk, withdrawals were frowned upon, and all partners worked out of the Partners' Room, from one big desk. This last Dicken-ish arrangement ensured that partners could keep an eye on one another and any partner who took too much risk on behalf of the firm was instantly discovered.

June 1 might have marked a turning point for international equities. Are they starting to slide back down or are they merely taking a rest and consolidating before they move further up? Either way, interesting times.

Many continue to see “green shoots” sprouting everywhere but the big difficulty is trying to distinguish what is driving them from underground – the massive liquidity being created, the perception (mistaken or not) that markets have overshot on the downside, or good economics. I rather suspect the first two.

One problem with pumping oceans of money into world economies is that noone can say where they will eventually erupt. Is the magma we had to print turning into lava and nasty volcanoes?

I am still of the opinion that ominous creatures still lurk beneath the bubbly surface of many markets – what we see crawling are speckled vipers, not green shoots. In a way, it got worse these past weeks. I thought there was slightly more than even a chance of deflation, with inflation a distant threat. Now I think I smell the sulfur of the first rude eruption of inflation.

I missed the original FT article but got it from MarketWatch the day after, on May 16^th, this thing about De Beers’ (AAUK) global push to persuade us all that diamonds are not only a girl’s best friend but also a safe-haven investment. No thanks!

In these unstable times, when the price of gold is near historic peaks, De Beers is going through rough times, thus the reason for the global campaign. One cause of this is that the cartel it managed to keep intact for so long broke down as new sources of supply came in. The second, and more relevant reason, is that consumers have always treated diamonds as a luxury item, not as a store of wealth for turbulent times, which shows that De Beers' late-in-the-day campaign may be blowing in the wrong direction.

As readers of my blog and followers of my Newsletter know, I am no fan of this rally. I feel it will soon come to a bad end. This, though, has not kept the Newsletter from being 60% invested, as I write.

In times like these, the ever lurking schizophrenia comes to the fore. The market is schizophrenic in both senses of the word: it seems to have lost contact with the economy, and it manifests the usual contradictory bipolar behavior.

In spite of the recent rally, the viability of “stocks for the long run” is now in doubt more than ever. Even the investor in blind equity , the eternal optimist, seems to be concluding that the bottom line is being sliced and diced far too much leaving shareholders, the ultimate owners, with much less than they deserve for the risk they undertake.

The bottom line is being encroached by laws and regulations on a wide spectrum of issues ranging from energy to consumer protection to the environment to labor, pensions, and health, and much more.

In such an environment, one expects deflation to be king and inflation just a wimp of a bogey.

Not so. Treasury Inflation Protected Securities (TIP), and other inflation-linked securities around the world, are in demand. In the recent TIPS auction, the US government sold $6 billion in TIPS and the yield, at 1.589%, was nearly 2% higher than expected by traders polled by Bloomberg.

I would like to discuss a topic today which has been on my mind for some time but, so far, writing about it had not gotten the upper hand over fighting the waves the markets have been throwing at us. My topic is our corporate model.

How will our companies – global, public companies – change over the coming years after the twin onslaught of the financial crisis and emerging countries (which seem to be really emerging this time round)?

I chose this title on purpose because our times are going to engender a big re-think of our political and economic system and “Capitalism and Freedom”, Milton Friedman’s seminal book, arrived during a time of great cross currents as well, those of a generation ago.

It really beats me how some still seek to place the blame for this crisis on hedge funds and clamor for their extensive regulation and taxation, plus curbing the pay of alpha-producers, when hedge funds are the only type of institution which behaved in line with the fabled "free market capitalism": those which guessed wrong went under, those which got it right made it big.

One hears cries for re-engineering the financial regulatory system as if it was lack of regulation which caused all this havoc!

SPDR KBW Bank ETF (KBE), invested in major US listed banks, now has a dividend yield of around 9% while the DOW Diamonds (DIA) yields half that.

This got me thinking about dividend yields on stocks. I suspect that DIA was the trigger: Charles Dow’s principles about how the market generally works, later dubbed Dow Theory, had at its core investors’ search for value and not, as now popularized, the confirmation by the averages, which was added later by others.