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Investment & Finance Thread (June 1 edition)
Investment & Finance Thread ^ | 06/1/2014 | Freeper Investors

Posted on 06/01/2014 5:53:52 PM PDT by expat_panama

 

 

Big news this week: stock prices are officially in an IBD 'uptrend' as of last Tuesday night!   We can see it on the plot to the left (click on it to enlarge).

OK, so we all can see that if we'd have sold on the 'uptrend' announcements and bought on the 'corrections' this year we'd be better off, but imho that only proves we're in a goofy backwards market.  That's good; first, because now we know it's goofy, and second because we all need more entertainment in our daily lives.

In the meantime let's all memorize the eleven cognitive bias's posted last week (hat tip to Osage).

 

This is the thread where folks swap ideas on savings and investment --here's a list of popular investing links that freepers have posted here and tomorrow morning we'll go on with our--

Open invitation continues always for idea-input for the thread, this being a joint effort works well.   Keywords: financial, WallStreet, stockmarket.



TOPICS: Business/Economy; Culture/Society; News/Current Events
KEYWORDS: financial; stockmarket; wallstreet
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1 posted on 06/01/2014 5:53:52 PM PDT by expat_panama
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To: abb; Abigail Adams; abigail2; AK_47_7.62x39; Aliska; Aquamarine; Archie Bunker on steroids; ...

--back to work tomorrow ping...

2 posted on 06/01/2014 5:55:34 PM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: expat_panama

“In the meantime let’s all memorize the eleven cognitive bias’s posted last week (hat tip to Osage).”

That was good. I recognized some things I need to work on.


3 posted on 06/01/2014 6:17:41 PM PDT by Lurkina.n.Learnin
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To: All
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4 posted on 06/01/2014 6:22:19 PM PDT by musicman (Until I see the REAL Long Form Vault BC, he's just "PRES__ENT" Obama = Without "ID")
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To: Lurkina.n.Learnin

I found this interesting

The Trade of the Century;
When George Soros Broke the British Pound
http://priceonomics.com/the-trade-of-the-century-when-george-soros-broke/


5 posted on 06/01/2014 6:28:57 PM PDT by Lurkina.n.Learnin
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To: expat_panama

Can you put me on the ping list if possible...


6 posted on 06/01/2014 10:49:17 PM PDT by tubebender (Evening news is where they begin with "Good Evening," and then proceed to tell you why it isn't.)
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To: tubebender

done!


7 posted on 06/02/2014 4:23:32 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: abb; Abigail Adams; abigail2; AK_47_7.62x39; Aliska; Aquamarine; Archie Bunker on steroids; ...

Happy Monday all!!  Last Friday left us w/ a rally 3 days old and still alive; today both metal and stock index futures are upbeat as well.   ISM index and construction spending today at 10.  News of note:

World stocks rise as China manufacturing improves  World stock markets mostly rose Monday after China's manufacturing expanded and two Wall Street benchmarks hit record highs.

Funds Cut Bullish Gold Wagers Most This Year

Fed's Evans: timing of rate hike will depend on inflation outlook

Obama's boldest move on carbon comes with perils WASHINGTON (AP) — The new pollution rule the Obama administration announces Monday will be a cornerstone of President Barack Obama's environmental legacy and arguably the most significant U.S. environmental regulation in decades.

China accelerates as euro zone stumbles Reuters - 5 hours ago LONDON/BEIJING(Reuters) - Signs of an economic revival in China have raised hopes that Beijing's targeted measures to bolster growth are having an impact but a slowdown in the euro zone will increase expectations of policy easing there.

With Stocks At Record Highs, What Could Go Bad? - Greg Zuckerman, WSJ


8 posted on 06/02/2014 4:24:55 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: expat_panama

The econ misses continue:

ISM 53.2 vs 55.5 est
Construction Spending +0.2% vs +0.6% est


9 posted on 06/02/2014 7:51:20 AM PDT by Wyatt's Torch
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To: Lurkina.n.Learnin; Osage Orange
...good. I recognized some things...

Exactly!  Checking to see if our thinking is good by thinking about it is a problem.  Wikipedia has a bigger list of what they call 'cognitive bias' too, plus a huge pile of big words on how to deal with them, but what I eventually have to do is just look at my bottom line.  If I'm making money I think the same way and if I'm not I change my approach.

10 posted on 06/02/2014 8:17:11 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: Wyatt's Torch
...econ misses continue...

Trading seems to be only slowing and not reversing; there's always the way many traders still take a 'bad-news-is-good-news' approach, that they want the Fed to lay off the rate hikes.

11 posted on 06/02/2014 8:28:05 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: expat_panama

Holy crap how do you miss this?

“SM Mfg Survey head Holcomb says seasonal factors were applied to the May data that wasn’t supposed to be, in the process of correcting...”


12 posted on 06/02/2014 8:28:50 AM PDT by Wyatt's Torch
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To: expat_panama

Wow...

ISM CORRECTS MISTAKE: NOW SAYS THIS MORNING’S MANUFACTURING REPORT WAS A BEAT

11:28 UPDATE: ISM has updated its incorrect manufacturing report from this morning to 56.0 from 53.2.

May ISM manufacturing was reported at 53.2, a three-month low.

But on Twitter, research firm Stone & McCarthy said it believes ISM used the wrong seasonal results, and as a result, the headline May ISM reading is incorrect.

Bloomberg’s Vonnie Quinn just tweeted that ISM is in the process of correcting its report.

On its Twitter page, Stone & McCarthy has replied to users confirming they are the source of rumors regarding an incorrect ISM print.

Following the ISM report, Pantheon Macroeconomics’ Ian Shepherdson called the report “slightly disappointing.”

Earlier today, Markit’s May manufacturing PMI came in at a three-month high of 56.4, up from 55.4 in April. Along with that report, Markit’s Chris Williamson said, “With the exception of a brief spell in early-2010, output is growing at the fastest rate seen since prior to the financial crisis.”

We’ve reached out to ISM for comment, and this post will be updated as we learn more.


13 posted on 06/02/2014 8:32:04 AM PDT by Wyatt's Torch
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To: expat_panama

From zerohedge:

One can’t make this up.

Remember when the ISM’ Holcombe explicitly said moments ago in its 10 am release that “The May PMI registered 53.2 percent, a decrease of 1.7 percentage points from April’s reading of 54.9 percent” Turns out he lied, and moments after the ISM released its data, it “realized” it had used a wrong seasonal adjustment factor. We can only imagine that the ISM received a very unpleasasnt phone call...

From Bloomberg:

ISM CORRECTS MAY FACTORY INDEX TO 56 AFTER ADJUSTMENT ERROR
ISM INITIALLY REPORTED U.S. MAY FACTORY GAUGE FELL TO 53.2
S&P 500 ERASES LOSS AFTER ISM CORRECTS FACTORY DATA

In other words, blame the complete data revision on the warmer weather.

And just like that, we have even more confirmation that all the “data” is nothing but Garbage In, Garbage Ou.


14 posted on 06/02/2014 8:35:17 AM PDT by Wyatt's Torch
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To: expat_panama
S&P round trips the ISM data screwup...


15 posted on 06/02/2014 10:09:00 AM PDT by Wyatt's Torch
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To: expat_panama

NYSE MAC DESK MID-DAY MARKET UPDATE:
DOW 16,735 (+18 points), S&P500 1924 (+1 handle), Brent Crude $108.90/barrel (-$0.51), Gold $1,244.00/oz. (-$1.60)

MARKET DRIVERS: (Stocks are modestly higher and off session-lows after no fewer than two corrections were made to this morning’s ISM factory index for May. Volume remains extremely light as traders look ahead to another big jobs report and an important ECB meeting later in the week.)

• The Institute for Supply Management’s factory index rose to 55.4 in May from 54.9 in April - in line with consensus forecasts. ISM corrected the index TWICE, after initially reporting it at 53.2, then correcting it up to 56, as ‘wrong seasonal adjustments’ were cited. Hopefully, they do not change it a third time.
• According to the Census Bureau, Construction spending rose 0.2% in April, which was less than the 0.6% growth expected..
• China’s official Purchasing Managers Index number for May was better than expected, rising to 50.8 from 50.4 in April. This is good news, particularly on recent reports of weakness in the property sector and a relatively slow Q1 GDP of 7.4%.
• The euro-zone’s manufacturing PMI fell to 52.2 in May from April’s 53.4, missing the consensus forecast of 52.5.
• In a speech over in Istanbul this morning, Chicago Fed President Evans, (non-voter, dove), said that the Fed will end asset purchases this year, and officials will wait until inflation is much closer to its 2% objective before they consider raising interest rates.

Rich’s Commentary:
Hard evidence that markets react to economic data... Take a look at the minute-by-minute chart of the S&P 500, below. At 10am ET, the ISM factory index for May was reported at a ‘shockingly’ disappointing 53.2, (the experts were looking for a number closer to 55.5)... Almost immediately, as you can see from the chart, the S&P fell out of bed to the tune of about 6 handles to the downside. Then, about an hour later, the ISM guy announced something to the effect of, “Oops, we goofed on the number this morning. The index really rose to 56 for the month of May.” Looking, again, at the chart, you can see the nice rebound that ensued when the ‘correction’ hit the tape... To confuse matters even more, the same guy announced a second correction; blaming a faulty abacus for the mix-up... While we are not happy with volatility that these mistakes caused, we are thankful that they gave us something to write about in the mid-day today... Separately, we closed out the month of May on the plus-side for a fourth-straight month, with the S&P 500 +2.10% and the Dow +0.82%. Diving a little deeper; Growth outperformed Value; Russell 1000 growth was +3.12% while Russell 1000 Value was +1.46%. Ans all S&P sectors except utilities (-1.65%), ended the month on the plus-side... A quick note about Q2 earnings : the early trend is not encouraging. According S&P Capital IQ, 117 companies have issued guidance, and 103 of those issuances are negative, 13 positive and 1 in-line; bringing the negative to positive ratio to a very high 7.9. That’s not too good... By the way, Q1 is just about finished with 493 companies reporting. Earnings growth stands at +3.4%, and revenues came in at +4.0%… Moving on, the Dow remains just off session-highs on extremely low volume, with a paltry ~205M shares on the tape at this time… Internally, breadth is bullish across the board. Advancing Issues: 2124 / Declining Issues: 2069 — for a ratio of 1.0 to 1. New 52-Week Highs: 430/ New 52-Week Lows: 45… Technically, our chart-guru did a little research over the weekend and hit us with the following this morning: “stocks enter the month of June on a tear, having recorded 8 of the last 10 days ‘UP’, but even on the down days, successfully made new intra-day 2-day highs, above the prior day, while not breaching the prior day’s lows. At current levels, the trend remains quite bullish, with new weekly and monthly all-time highs recorded by both the S&P 500 and the Dow... By the way, we like the Spurs to get revenge on the Heat and take the NBA Title in 6 games... Have a tremendous day!

John’s Options Commentary : Options player are speculating on further gains in India as The Wisdom Tree India Earnings Fund (EPI) sees bullish activity this morning. With the ETF trading $22.10, a customer buys a 10,000-lot of Weekly (6/27) 22.5 calls for 35 cents. More than 17,000 contracts are now on the tape and the activity appears to be expressing the view that the EPI will trade back to its post-election high of $22.85 or higher over next 25 days. On the other hand, bearish flow takes place in the Financial ETF (XLF). With the XLF trading unchanged at $22.29, one investor bought an Aug 20-22 put spread for 38 cents, 12,800 times. Separately, a Weekly (6/6) - Weekly (6/13) 22 put spread for 6 cents, 10,000 times. The flow is apparently expressing concerns about short term weakness in the financials, as more than 63,000 puts have changed hand so far today. The most active contracts today can be found in the Japan ETF (EWJ). It looks as if an investor is rolling his long position out another month. With the EWJ trading around $11.72, the Jun-Jul 10 call spread trades for 3 cents, 100,000 times. Minutes later, the same spread trades for 3 ½ cents, 100,000 times. More than 250,000 spreads have now traded and the activity appears to reflect a bullish view on the EWJ over the next 2 months. The VIX continues to tread water today and now reads 11.77, up .37.
Economic Calendar for the Week:
Monday June 2
Charles Evans Speaks 4:00 AM ET
PMI Manufacturing Index 9:45 AM ET
ISM Mfg Index 10:00 AM ET
Construction Spending 10:00 AM ET

Tuesday June 3
Factory Orders 10:00 AM ET
Esther George Speaks 1:50 PM ET

Wednesday June 4
MBA Purchase Applications 7:00 AM ET
ADP Employment Report 8:15 AM ET
Gallup U.S. Job Creation Index 8:30 AM ET
International Trade 8:30 AM ET
Productivity and Costs 8:30 AM ET
PMI Services Index 9:45 AM ET
ISM Non-Mfg Index 10:00 AM ET
Beige Book 2:00 PM ET

Thursday June 5
Challenger Job-Cut Report 7:30 AM ET
Gallup US Payroll to Population 8:30 AM ET
Jobless Claims 8:30 AM ET
Narayana Kocherlakota Speaks 1:30 PM ET

Friday June 6
Employment Situation 8:30 AM ET
Consumer Credit 3:00 PM ET

Sector Highlights brought to you by: streetaccount.com »

Materials the best performer with the S&P Materials Index +0.6%.
• Paper and packaging space mixed. MWV +4.2% rallying after Starboard Value disclosed a 5.6% stake in a 13D filing. Fund talked up SOTP valuation and said this value is being obscured by excessive corporate overhead and conglomerate structure.
• Industrial metals a mixed bag following last week’s selloff. Seem to be some pockets of support from slightly better May manufacturing PMI out of China. However, more aggressive policy fine-tuning, which has helped cushion growth, failed to provide any support last week with the focus on the continued slump in iron ore prices. Global miners outperforming today with RIO +2% and VALE +1.4%. CENX +3.4% the standout in aluminum. Upgraded at BofA Merrill Lynch, along with AA +0.8%. Most steel names lagging. Copper names under modest pressure. Iron ore play CLF (0.4%) the big laggard.
• Precious metals stocks mostly weaker. GDX (0.7%). Recall group sold off sharply last week with the downturn in the underlying commodities. Gold was hit by a combination of deteriorating technicals, the removal of the election overhangs in Europe and Ukraine and the continued relegation of geopolitical uncertainty to the backburner.

Consumer discretionary outperforming with the S&P Consumer Discretionary Index +0.3%.
• Restaurants broadly higher. DNKN +2.3%, SONC +1.4% and MCD +1% among leaders.
• Retail mostly higher with the S&P Retail Index +0.1%. CONN +6.4% leading gains following Q1 earnings beat, with strong comps. BIG +1% outperforming; upgraded at Benchmark Company, downgraded at Barclays. SHLD (4.8%) and JCP (2%) lagging. In apparel, ARO (5.1%), EXPR (2.5%) and ANN (1.9%) among notable underperformers. CE space lagging with RSH (3%), HGG (1.7%) and GME (1.5%). Housing-related space mostly higher. WSM +0.6% initiated at Barrington Research. LL +1.2% and HD +0.8% among the outperformers.
• Media mostly higher. TWX +1.8%, VIAB +1.2% and CMCSA +0.9% among leaders, while DWA (0.9%) lagging.
• Footwear and sporting goods mixed. LULU (2.5%) and SKX (0.3%) among laggards, DKS +1.3%, DSW +1.3% and UA +0.9% outperforming.
• Homebuilders underperforming with XHB (0.1%). Group broadly lower, with HOV (1.6%), BZH (1.1%) and MTH (1.1%) among the laggards.

Healthcare in line with the S&P Healthcare Index +0.04%.
• Pharma mixed with the DRG (0.1%). BMY (2.4%) and LLY (1.1%) the notable decliners. The latter presented ramucirumab trial data at ASCO. Street noted topline numbers from the company’s REVEN revealed a modest efficacy profile, but below analyst expectations. TEVA +3% and AZN +1.5% the notable outperformers. The former appointed Sigurdur Olafsson as president and CEO of the newly established global generic medicines Group. The latter announced data comparing the efficacy and tolerability of olaparib and cediranib in combination to olaparib alone.
• Biotech underperforming with the IBB (0.2%). ASCO takeaways in focus. PBYI (21.5%) selling off after presenting phase II PB272 data at ASCO. CLVS (11%) reportedly lower on concerns about hyperglycemia associated with CO-1686 usage. CYTK (6%) underperforming after announcing additional results from BENEFIT-ALS. CYCC (5.9%) provided an update on clinical development plans for Sapacitabine. NPSP +12.4% rallying after SHPG +1% reportedly secured $5B in financing for its takeover. ARIA +6.2% outperforming after it presented phase II trial results of Iclusig, showing anti-tumor activity. AGN +1.8% higher amid reports Pershing Square is said to launch consent process for special meeting of AGN holders. PCYC +1.4% announced results from the phase III RESONTAE study of Imbruvica at ASCO. Analysts broadly positive, expecting Imbruvica to receive full approval.
• Hospitals led lower by CYH (1.4%) and THC (1%).

Financials in line with the S&P Financials Index +0.03%.
• Life insurance group outperforming. M&A headlines in focus with PL +10.3% on several press reports that Japanese life insurance company Dai-ichi Life is considering a nearly $5B acquisition of the company. LNC +1.6%, MET +1.1% and HIG +0.9% all beating the tape. Unclear to what extent rate backup is helping. Note that it does not seem to be providing much of a tailwind for banks. However, flurry of articles on bond market resilience continue to highlight upside risk for yields.
• Banks mixed with the BKX +0.03%. JPM (0.5%) the worst performer among the money center names. WFC +0.6% and STI +0.6% the bright spots in the regional space. Latter mentioned positively in Barron’s, which also had some upbeat comments on the banking group. Focused on cheap valuations, improving economy and stronger balance sheets. Recall banking group has outperformed over the last couple of weeks. Last week’s 1.2% gain came despite renewed concerns about weak trading and mortgage revenue.

Tech underperforming with the S&P Information Technology Index (0.1%).
• Software underperforming. BLOX (5.7%), JIVE (5%), FTNT (1.8%), TIBX (1.8%) and CVLT (1.5%) leading the space lower. BLOX continuing its post-earnings selloff, now down >62% ytd.
• Internet space mostly lower with QNET (0.8%) and SOCL (1.1%). YELP (3%) a laggard following a downgrade at RBC Capital, which notes less attractive risk/reward. GRPN (3.2%), LNKD (3.1%), P (2.2%) and GOOGL (1.9%) also underperforming. Note reports that GOOGL will invest $1-3B on satellites to extend internet access around the world. TWTR +1.4% and OPEN +1.4% the notable performers to the upside.
• Semis mixed with the SOX +0.2%. RBCN (6.6%) and VECO (3%) the worst performers. XLNX (1.8%) and MCHP (1.2%) both downgraded at Goldman Sachs, which also upgraded MSCC +0.7%. BRCM +8.7% topping gains after announcing its exploring a possible sale or wind-down of its cellular baseband business. The company also guided Q2 revenue in-line with expectations. MRVL +1% the other notable gainer.
• Hardware mixed. AAPL (0.8%) the notable decliner. Note that according to BTIG, the stock has fallen on the day of the Worldwide Developers Conference (today) for each of the past six years, with the average decline of 1.4%. IBM +0.7% topping gains. Barron’s cover story was on IBM’s CEO, and discussed her turnaround efforts at the company.

Consumer staples the worst performer with the S&P Consumer Staples Index (0.2%).
• Beverages mostly lower. SODA (1.2%) lagging; Longbow reduced its estimates, citing mixed demand and lower prices. BF.B +1.4% and SAM +1.1% outperforming.
• Grocers underperforming. SVU (2.1%) lagging, while TFM (2%) and WFM (1%) continue recent underperformance.
• Packaged foods and processing mixed. WSJ discussed HSH +0.1%, saying the firm will find it difficult to turn down either TSN +1.5% or PPC +0.3%. Added that PF +1.1% deal may have been attempt by HSH to draw out bids for itself. SAFM +0.8% outperforming, while DF (2.2%), THS (0.6%) and DMND (0.3%) lagging.
• HPCs and cosmetics mostly lower. CL (0.4%) and PG (0.4%) among the laggards. In cosmetics, RDEN (4.4%) continuing recent selloff, while AVP +0.1% continuing last month’s outperformance. REV (1.5%) lagging.
• Tobacco lower. LO (1.9%) underperforming, giving back some recent gains that came following news of possible RAI (0.8%) merger.


16 posted on 06/02/2014 10:33:51 AM PDT by Wyatt's Torch
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To: expat_panama
Specialists Win, Generalists Lose

by Jason Leavitt LeavittBrothers.com July 16, 2013

From the start they had the talent and skills to navigate the market, and they simply aren’t prone to making the same dumb, repeated mistakes the rest of us do.

This is the assumption, or perhaps this is the excuse offered by losing traders. But in reality, successful traders exhibit similar characteristics that can be learned, and they do certain things that anyone can do. One of these is the topic of this essay.

INCORRECT ASSUMPTIONS

The incorrect assumption is that good traders are good at everything. Uptrends and downtrends, big ranges, small ranges, and choppy markets, big gaps or no gaps - that they can flawlessly float from one indicator to the next and from one strategy to the next as the market changes.

None of this is true. In fact the exact opposite is true.

DO ONE THING WELL

The best traders focus on doing one thing well. The best traders identify a trade, or possibly two trades, that work, that jives with their personality, and they execute over and over and over. They specialize in doing one thing very well, and they completely ignore everything else and they resist the temptation change.

It then goes without saying unsuccessful traders are painfully unfocused. They constantly jump from one strategy to the next in hopes of finding a Holy Grail which doesn’t exist. First they trade an MACD crossover system. After a month, they give up and try a Stochastic oscillator system they saw on a message board. After a month of that they try trading Fibs. Then they try Median Lines. Then they try buying dips instead of breakouts. It goes on and on, and after six months they realize if they would have just stuck with their original MACD system, they would have been just fine.

BEST ADVICE

The best advice I can give to a new trader or a struggling trader is to find a trade that works, one that jives with their personality, get good at it, and do it over and over, and do not be tempted to trade other methodologies.

If I was running a hedge fund, and I interviewed you for a trading position, the first question I’d ask is: what’s your trade? What is the single trade that works – although I know it won’t work all the time – that you are comfortable executing? I’d want to know you’re not one of those traders who constantly jumps from set up to set up desperately hoping to find something.

LIKE NO OTHER ENDEAVOR

Unlike many other endeavors, trading allows you to do this. If you were a golfer, you’d have to be good at driving and putting and a short game. You’d have to be good playing in the rain or when it’s windy.

If you play chess, you have to be good at the open, the middle game, the end game and various scenarios based on what pieces are on the board.

But trading doesn’t force you to be good at many things. As hard as trading is, trading allows you to identify certain conditions that you’re good at navigating and then permits you to only trade when those conditions are present. You can literally suck at 99% of what’s out there and still make a living trading if you get good at one or two specific set ups.

With this realization, trading isn’t so intimidating any more. You don’t have to be good at a lot of things, and you don’t have to understand much either. In your little corner of the world you can identify a simple set up that works, and then execute it over and over.

ANECDOTAL OBSERVATIONS

I’ve been running LeavittBrothers.com for almost 11 years, and I have a pretty good feel for who makes money and who doesn’t. I could pull up charts posted by successful traders and compare them to charts from three or four or five years ago, and they’d be identical - same time frame, same duration, same indicators, same parameters on the indicators, same boring stuff. But that’s why they’re successful. They do the same thing over and over. This doesn’t mean what they do always works. In a given 12 month period what they do may only work eight or nine months, but these traders have learned that it’s best to go back and forth between trading aggressively and sitting on the sidelines than it is to constantly change strategy when the one they’re using stops working.

WRAP UP

After meeting many successful and unsuccessful traders, this is the most obvious and glaring difference.

Successful traders specialize in being great at one thing.

Unsuccessful traders constantly jump from one strategy to the next.

You need to take complete inventory of your skills, your talents, your temperament and study different trading styles and pick something that works, something that jives with your personality, something you can execute and commit to becoming good at that, and completely ignore everything else.

17 posted on 06/02/2014 10:36:08 AM PDT by Osage Orange (I have strong feelings about gun control. If there's a gun around, I want to be controlling it.)
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To: expat_panama
The market doesn't care what you are or who you are. If a Harvard educated economist can explain why one of his positions went against him, he still doesn't get his money back.

Entries are less important than most traders think. Said another way, pinching pennies with entries will cost you dollars. Too many times I've hesitated to chase a stock 10 cents, and it cost me a couple bucks.

Often the hard trade is the one I should make while the easy trade is the one that fizzles.

The big money is made riding the big trends. You can definitely make a living shooting for little winners, but you have to nail big moves if you want to get rich (it does you no good to buy a stock at 15, sell it at 18 and then watch it rally to 45).

I don't know which set ups are going to be "good ones" and which are going to fizzle out. Anyone who says differently will probably try and sell you real estate by the Bay. Because of this, trading is somewhat of a numbers game. Get in very good set ups when the trading environment is conducive, play good defense and then let the law of large numbers work out.

There are many ways to trade the market, but there are no bonus points for trading a certain way. Traders need to take inventory of who they are and what they are and then find a trading methodology that jives with their personality. Then don't stray - stick with it. It's better to specialize in one type of trade and execute that trade over and over than be a jack of all trades (no pun intended).

Screen time does not always result in more profits. I've spent hours analyzing every angle of one particular stock and then had the trade go against me; I've also spent 10 seconds deciding to enter a stock that visually had a great pattern and an easily identifiable entry level and made a lot of money. This isn't an excuse to be lazy, but it does tell me over-analyzing isn't wise. On a related note, if you spend two hours dissecting a chart and deciding to play it, it's much harder to cut it loose when it goes against you because so much time is invested, but if little time is invested, it's fairly easy to dump it and move o.

I'm better at entering good set ups and then letting the market do the work for me than actively managing positions. In fact back when I was trading and working a restaurant job at the same time, I made more money when I worked lunch shifts (because I had no choice but to put a stop in place and let the chart play out) than when I sat and starred at my computer screen all day (because I was my own worst enemy; I did dumb things like panic when a stock went slightly against me).

I don't have to know why something happened to make money. In fact most of the time I don't have a clue. This is why I prefer story books and biographies to how-to books.

In many cases, being smart hinders progress because the smart guy tries to figure everything out; he constantly asks why. I've seen way too many smart people fail miserably at trading because they try to put everything in a nice, neat box. Don't fall into the trap.

Keep it simple. Trading isn't a game you're trying to figure out. If all I do is recognize the trend and commit to only trading good set ups in that direction, it's really not that hard to make money.

Think longer term. If I'm trying to make money right now, I'll probably lose, but if I'm trying to make X over the next couple months, I tend to be more relaxed and I trade better. Said another way, a baseball player should not try to go 1-for-3. Instead he should strive for 10-for-30 because it enables him to have a bad game here and there but still accomplish the goal.

18 posted on 06/02/2014 7:38:59 PM PDT by Osage Orange (I have strong feelings about gun control. If there's a gun around, I want to be controlling it.)
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To: Osage Orange
I will tell some personal experiences here.

If I enter correctly...and stick to my plan....( Plan the trade, trade the plan...) I'm better for it.

The less I mess with a trade..the better off I am..for the most part.

Trimming winners going up..has very much worked for me.

KISS really works..............I don't try to predict anything really.

One needs to be very mechanical if you are going to do what I do.................

It's simple... : )

19 posted on 06/02/2014 7:53:48 PM PDT by Osage Orange (I have strong feelings about gun control. If there's a gun around, I want to be controlling it.)
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To: abb; Abigail Adams; abigail2; AK_47_7.62x39; Aliska; Aquamarine; Archie Bunker on steroids; ...

The adventure continues with gold falling and stocks still stuck where they were last week when we were supposed to be in an 'uptrend'.   Today's futures have both indexes & metals a bit down before today's reports on factory orders, and auto/truck sales.  Lot going on today:

Europe stocks down, Euro holds near lows after inflation data Reuters - 9 hours ago LONDON, (Reuters) - European shares dipped on Tuesday and the euro held near 3 1/2-month lows against the dollar after a fall in euro zone inflation cemented the case for the European Central Bank to ease monetary policy later this week.
Asian stocks mostly up on China data; Europe falls SEOUL, South Korea (AP) — Global stocks were mixed on Tuesday with inflation data showing a weak recovery in Europe even as Chinese manufacturing was recovering from contraction. Associated Press5 mins ago
Gold hits four-month low, longest losing streak in seven months Gold fell for a fifth session on Monday, its longest losing streak in seven months, as rising stock markets diverted interest from bullion, and ahead of the latest European Central Bank policy meeting and key U.S. data this week. Spot gold was down 0.3 percent at $1,247.20 an ounce at 1355 GMT,… Reuters
Are Bonds Signaling a Recession, or Warning of a Market Crash? When Treasury yields fall, it generally means that investors around the planet are looking for a flight to safety. Or in the extreme cases, it signals that the economy is slowing — and bonds are supposed ... 24/7 Wall St.
Seattle council passes $15 minimum wage SEATTLE (AP) — The Seattle City Council unanimously passed an ordinance Monday that gradually increases the minimum wage in the city to $15, which would make it the highest in the nation. Associated Press
Putin Pausing as Russia Volatility Kills Trade-to-Invest Vladimir Putin ’s territorial ambitions are bumping up against financial markets. As the Russian president plots his next move on Ukraine, investors are giving his inner circle pause for thought. Since Putin annexed Crimea in March in the teeth of international outrage, Russian stocks have become… Bloomberg
Friday's Jobs Report Will Be Pumped w/PEDs - John Crudele, New York Post
The Next Four Days Could Rock Uneasy Markets - Ben Eisen, MarketWatch
European Decision That Could Dismantle Internet - Wayne Brough, RCM
The Real Slow Lane Threat to the Internet's Health - Bret Swanson, Forbes

20 posted on 06/03/2014 4:24:39 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: expat_panama

Good morning. Looks like Chrysler had good sales. Up 17% verses expected 14%. Are you still in Texas?


21 posted on 06/03/2014 5:20:54 AM PDT by Lurkina.n.Learnin
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To: expat_panama

KCG - THE LOOK…June 3rd, 2014

U.S. stock-index futures retreated, indicating that the benchmark Standard & Poor’s 500 Index will
fall from a record level, as investors awaited data to gauge the strength of the recovery in the world’s biggest economy.

Krispy Kreme Doughnuts Inc. dropped 12 percent after cutting its earnings forecast because of mounting costs and slow first-quarter sales. Quiksilver Inc. slumped 35 percent after the surfwear retailer posted a wider loss than analysts had predicted. Hillshire Brands Co. jumped 7.8 percent in pre-market
trading after confirming that Pilgrim’s Pride Corp. has increased its bid for the food producer.

Futures on the S&P 500 expiring this month fell 0.3 percent to 1,916.3 at 7:39 a.m. in New York. The equity gauge rose 0.1 percent yesterday to a record 1,924.97, reversing an earlier loss of as much as 0.4 percent. Dow Jones Industrial Average contracts slipped 33 points, or 0.2 percent, to 16,689 today.

“The market bounces back and forth, but fundamentally nothing much has changed,” Ivo Weinoehrl, a fund manager at Deutsche Asset & Wealth Management, said by telephone from Frankfurt. “The economy is definitely improving after a disappointing first quarter, and we’re still expecting earnings growth of 7 to 8 percent. We’re in a stable environment, but it’s nothing to get excited about and I don’t see the real pick-up coming through just yet.”
A Commerce Department report at 10 a.m. in Washington will probably show factory orders climbed 0.5 percent in April, according to the median economist estimate compiled by Bloomberg. They rose 0.9 percent in March.

European stocks declined from a six-year high as a report showing lower-than-estimated inflation in
the euro area prompted investors to weigh the outlook for interest rates before Thursday’s European Central Bank meeting. U.S. futures dropped, while Asian shares climbed.

Pennon Group Plc lost 2.6 percent after saying pretax profit at its Viridor waste management unit fell about 20 percent. Eutelsat Communications SA slipped 3.5 percent as Abertis Infraestructuras SA sold its holding in the French satellite operator. Wolseley Plc rose 1.4 percent after posting higher sales on improved demand in the U.S. and Nordic region.

The Stoxx Europe 600 Index retreated 0.6 percent to 343.05 at 12:40 p.m. in London. The benchmark gauge added 1.9 percent in May as ECB President Mario Draghi said that the central bank was ready to take action in June if necessary. Standard & Poor’s 500 Index futures retreated 0.3 percent today, while the MSCI Asia Pacific Index advanced 0.5 percent.

• Support:1918, 1912, 1902
• Resistance:1928, 1932, 1942

This year’s rally in U.S. Treasuries set the stage for stocks to follow suit in the next few months if history is any guide, according to Carmine Grigoli, Mizuho Securities USA Inc.’s chief investment strategist.
The CHART OF THE DAY compares this year’s total returns on Treasury bonds maturing in 20 years or more, based on an index compiled by Barclays Plc, and the Standard & Poor’s 500 Index. The figures reflect interest and dividend income along with price changes.
Returns for the 20-years-and-up category were 14 percent for the year through May, Grigoli wrote in a report yesterday.
With that performance in mind, he studied how stocks responded after five-month gains of more than 10 percent in the Treasury bonds since 1926.
The stock index’s subsequent returns averaged 5.7 percent for three months, 11 percent for six months and 20 percent for 12 months, the report said. For each period, the returns were positive at least 83 percent of the time.
“This is a good time to consider rotating from bonds into equities,” Grigoli wrote. He cited the potential for a pickup in takeovers and stock buybacks, along with “reaccelerating profit growth.”
Grigoli expects the S&P 500 to end the year at 2,075. RBC Capital Markets’ Jonathan Golub has an identical estimate, the third-highest among 19 strategists in a Bloomberg survey. Only Canaccord Genuity Group Inc.’s Tony Dwyer and Weeden & Co.’s Michael Purves are more optimistic.


22 posted on 06/03/2014 6:17:48 AM PDT by Wyatt's Torch
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To: Lurkina.n.Learnin

CHRYSLER AND NISSAN SALES SMASH EXPECTATIONS
tube man air dancer

Wikimedia Commons
Chrysler said auto sales jumped 17% in May, beating expectations for a 14% increase.

Throughout the day, the big automakers will announce their May U.S. sales figures.

Analysts estimate the pace of sales increased to an annualized pace of 16.1 million in May from 15.98 million in April.

“Industry surveys point to a modest gain in overall motor vehicle sales in May after they pulled back 2% in April to a 16.0 million unit annual rate following a 7% surge in March to a seven-year high of 16.3 million,” said Morgan Stanley’s Ted Wieseman. “Retail sales appear to be on pace for a stronger gain to the best pace of the year, partly offset by lower fleet sales.”

Click Here For Live Updates »

Here’s our running tally:

Chrysler: +17% (+14% Estmated)
Nissan: +18.8% (+11%)


23 posted on 06/03/2014 6:19:49 AM PDT by Wyatt's Torch
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To: Lurkina.n.Learnin

ALL OF THE BIG AUTO COMPANIES ARE CRUSHING EXPECTATIONS
tube man air dancer

Wikimedia Commons
Auto sales are looking very robust.

Chrysler said auto sales jumped 17% in May, beating expectations for a 14% increase.

GM said sales surged 12.6%, crushing expectations for just 6.4% growth.

Ford said sales unexpectedly climbed by 3.0%. Analysts were looking for a 0.2% decline.

Throughout the day, the big automakers will announce their May U.S. sales figures.

Analysts estimate the pace of sales increased to an annualized pace of 16.1 million in May from 15.98 million in April.

“Industry surveys point to a modest gain in overall motor vehicle sales in May after they pulled back 2% in April to a 16.0 million unit annual rate following a 7% surge in March to a seven-year high of 16.3 million,” said Morgan Stanley’s Ted Wieseman. “Retail sales appear to be on pace for a stronger gain to the best pace of the year, partly offset by lower fleet sales.”

Click Here For Live Updates »

Here’s our running tally:

Chrysler: +17% (+14% Estimated)
GM: +12.6% (+6.4%)
Ford: +3.0% (-0.2%)
Nissan: +18.8% (+11%)


24 posted on 06/03/2014 6:46:25 AM PDT by Wyatt's Torch
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To: expat_panama
SocGen's Black Swan Chart:


25 posted on 06/03/2014 6:55:07 AM PDT by Wyatt's Torch
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To: expat_panama

Factory Orders +0.7%, Exp. 0.5%, Last 1.5%; Durable goods revised from 0.8% to 0.6%


26 posted on 06/03/2014 7:00:52 AM PDT by Wyatt's Torch
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To: Lurkina.n.Learnin

In the rainforest again but still fighting w/ suitcases. So much stuff going on this week that I can’t get to, but then again maybe being super busy is great because people don’t decide I’m a moron when I don’t get things done.


27 posted on 06/03/2014 7:53:13 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: Wyatt's Torch

This could be worse. They could get our guys here in California to figure out the numbers.

“California Governor Jerry Brown’s and State Controller John Chiang’s staff refused to go on camera and answer questions as the news broke. To give a perspective on the size of the accounting misstatements discovered by the Bureau of State Audits, the $31.65 billion in errors equals about a third of California’s $96.3 billion General Fund Budget for 2013-14. “

http://www.freerepublic.com/focus/f-news/3163129/posts


28 posted on 06/03/2014 10:06:09 AM PDT by Lurkina.n.Learnin
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To: abb; Abigail Adams; abigail2; AK_47_7.62x39; Aliska; Aquamarine; Archie Bunker on steroids; ...

 

Midweek already!  After yesterday's ending flat we got today's futures negative (again).  Big report day:

MBA Mortgage Index
ADP Employment Change
Trade Balance
Productivity-Rev.
Unit Labor Costs
ISM Services
Crude Inventories
Fed's Beige Book

News:


29 posted on 06/04/2014 4:09:11 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: Lurkina.n.Learnin
What?.... that even beats the lucrative cattle futures markets business in Arkansas in the late '70's. :)

So what is to keep Soros from pulling that stunt here? I realize it could take some help from co-conspirators. Seems a continued over ripe QE inflated currency may be vulnerable.

Especially if he wants to undermine an political opponent, which has been his MO in the past.

30 posted on 06/04/2014 4:21:07 AM PDT by catfish1957 (Face it!!!! The government in DC is full of treasonous bastards)
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To: expat_panama
ADP JOBS REPORT MISSES EXPECTATIONS

Private U.S. companies added just 179,000 jobs in May, missing epxectations for 210,000.

Adding to the disappointment, ADP revised its April number down to 215,000 from an earlier estimate of 220,000.

"Job growth moderated in May," said Moody's Analytics' Mark Zandi. "The slowing in growth was concentrated in Professional/Business Services and companies with 50- 999 employees. The job market has yet to break out from the pace of growth that has prevailed over the last three years."

Some economists consider the ADP report to be a reliable preview of the Bureau of Labor Statistics' official monthly jobs report.

Here's a look at the change in employment by industry: ADP

Here's a look at the change in employment by company size: adp


31 posted on 06/04/2014 5:31:56 AM PDT by Wyatt's Torch
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To: Wyatt's Torch
Seems clear that employment is growing steadily even if our recovery has not yet made us as prosperous as we were in the recent past.

 Growth over the past four years has been recovering faster than pop. grwth and barring another lapse we may be seeing a continuation of historic expansion.

32 posted on 06/04/2014 6:29:10 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: expat_panama
Yep. BTW the headline on Friday will be "Employment reaches all-time high".


33 posted on 06/04/2014 6:35:02 AM PDT by Wyatt's Torch
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To: Wyatt's Torch

—along with a bit of whining about the terrible economy inherited from before.


34 posted on 06/04/2014 6:40:50 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: catfish1957; Lurkina.n.Learnin
...When George Soros Broke the British Pound...

...beats the lucrative cattle futures markets business in Arkansas...

lol!  ok, so the Arkansas cattle futures thing was a money laundered bribe to Mr. Slick, but imho the Soros wager makes a couple points.  One is that Soros did the world a favor and deserved every penny he earned by cleaning up after the UK govt's lunacy.  The other is that his turning a few hundred $K  into a few billion involves grabbing an opportunity that's super rare.  Notice that since then Soros hasn't been able to turn his billions into a couple hundred $trillion.  OK, so Buffet, Pickens, and a few others had their joy-moments --but by and large the financial markets are good for a sable productive living for folks like us willing put in the effort.

35 posted on 06/04/2014 7:06:02 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: Osage Orange
big money is made riding the big trends

many ways to trade the market,

One needs to be very mechanical

A good wrap up of what most of us keep end up coming back to.

A matter of looking at how things have been working, choosing a path, and then taking it while making sure the destination hasn't moved somewhere else...

36 posted on 06/04/2014 8:33:56 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: expat_panama
What do you trade...?

BTW...one of my dreams is to sail thru the Panama Canal.

37 posted on 06/04/2014 11:01:11 AM PDT by Osage Orange (I have strong feelings about gun control. If there's a gun around, I want to be controlling it.)
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To: Lurkina.n.Learnin; Aquamarine; Sawdring

He picked a good field to go into. Automation and robotics will take him a long way into the future  Lurkina.n.Learnin

You’re very blessed.  Aquamarine

smile muscles have a difficult time recovering  Sawdring

congrats to you and your kid! Abigail Adams

Finally back at the jungle outpost I can finish what I was trying to say last week --thanks so much all for good thoughts, and I can't keep myself from sharing misc. ramblings on how it's that the kid that's a robot engineer is my youngest daughter and that seeing her NASA work station and the dumpster labeled "USED ROCKET PARTS ONLY" made me think about that robot kit we put together a dozen years ago.

So it's time to be grateful we're all blessed in many ways and keep in mind that life has both good things and bad things but I'm still liking the good things better.  Thanks y'all for being here and I'll try to return the favor by stifling myself and not saying another word about the other kids like the other daughter now in DC with the state dept. or the tour my son-in-law gave of his Apple computer factory building that's got more robots than MST3K.  OK, more on that only if someone specifically asks...

38 posted on 06/04/2014 11:50:21 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: Osage Orange
What do you trade...?

Thanks for asking 'cuz I had to realize that right now I got the biggest chunk of my money in an S&P index fund but I spend most of my research time in stocks w/ the smallest chunk 'cuz for the past few years they haven't done as well as the fund.  I'm still calling it an 'anomaly'.

...one of my dreams is to sail thru the Panama Canal...

Working there was a real adventure & it was fun swapping lies w/ my kid's mentor at NASA who'd begun work there the same year I started w/ the canal.

39 posted on 06/04/2014 12:34:04 PM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: expat_panama
Umm.....well, okay. Good to know.

Thanks for responding....

Nice talking with you.

40 posted on 06/04/2014 1:06:10 PM PDT by Osage Orange (I have strong feelings about gun control. If there's a gun around, I want to be controlling it.)
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To: expat_panama
So it's time to be grateful we're all blessed in many ways

Amen. Just returned from a trip to the Smoky Mtns. What an exquisite piece of real estate that is!

41 posted on 06/04/2014 8:29:38 PM PDT by Aquamarine
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QQQ hit a new high today.


42 posted on 06/04/2014 8:44:22 PM PDT by Lurkina.n.Learnin
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To: abb; Abigail Adams; abigail2; AK_47_7.62x39; Aliska; Aquamarine; Archie Bunker on steroids; ...

Yesterday we ended flat in light trade and on this Thursday morning futures traders are seeing more of the same.  Reports today include claims, job cuts, and gas inventories, and here's what caught my eye this AM:


43 posted on 06/05/2014 4:17:31 AM PDT by expat_panama (If you can't explain it simply then you don't understand it.)
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To: expat_panama

THE ERA OF NEGATIVE INTEREST RATES HAS BEGUN
mario draghi ecb

REUTERS/Francois Lenoir

The ECB lows benchmark interest rate to 0.15.%, from 0.25%.

The deposit rate goes meanwhile has now gone negative to -0.1% from 0.0%.

The deposit rate was widely expected to go into negative territory.

This will be followed by a press conference with ECB head Mario Draghi.

Markets will also be watching for any announcements on an asset purchase program, or quantitative easing.

Claus Vistesen at Pantheon Macroeconomics doesn’t expect the ECB to fire any sort of bazooka today though. Draghi already announced a three-step response the current weak growth and low inflation plaguing the eurozone.

“The first step involves a reduction in interest rates to put downward pressure on rising money market rates, and to depress the exchange rate,” writes Vistesen. This is expected in today’s announcement.

“The second step responds to sluggish credit growth by targeting lending to non-financial corporates through either an LTRO or private QE,” writes Vistesen. “The final step sees a broad- based asset purchase program to counter a persistent lurch lower in inflation expectations.”

Here’s the full decision:

At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:

The interest rate on the main refinancing operations of the Eurosystem will be decreased by 10 basis points to 0.15%, starting from the operation to be settled on 11 June 2014.

The interest rate on the marginal lending facility will be decreased by 35 basis points to 0.40%, with effect from 11 June 2014.

The interest rate on the deposit facility will be decreased by 10 basis points to -0.10%, with effect from 11 June 2014. A separate press release to be published at 3.30 p.m. CET today will provide details on the implementation of the negative deposit facility rate.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today. Further monetary policy measures to enhance the functioning of the monetary policy transmission mechanism will be communicated in a press release to be published at 3.30 p.m. CET today.


44 posted on 06/05/2014 4:50:07 AM PDT by Wyatt's Torch
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To: Wyatt's Torch
IMO.... Interest rates (short term especially) were already negative when taking account inflationary pressures.

Now to the new banking paradigm...... we are in territory where when you deposit $1000 in a money market, it might be $999.95 next month with no activity. The Japanese are already familiar with this process. To a huge amount of Americans, they will find this to be an unacceptable concept, and mattress volumes are going to start to rise.

Kudos to Santelli. He has been saying this is coming for at least a year.

45 posted on 06/05/2014 5:59:41 AM PDT by catfish1957 (Face it!!!! The government in DC is full of treasonous bastards)
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To: expat_panama
Kiss Gold Bull Market Goodbye

I am rooting for gold to get down to triple digits. I will jump in big time.

46 posted on 06/05/2014 6:01:51 AM PDT by catfish1957 (Face it!!!! The government in DC is full of treasonous bastards)
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To: Wyatt's Torch
Excellent graph WT. One interesting point.....

Notice that the first 7 employment recoveries are pretty much random in their duration. And that the last 4 are in chronological order. Even to the point that if a new recession pops up now(which is a strong possibility), we actually never recovered.

I know there are a million reasons, but if I fingered one, it would be the economic mismanagement by our government.

47 posted on 06/05/2014 6:07:16 AM PDT by catfish1957 (Face it!!!! The government in DC is full of treasonous bastards)
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To: catfish1957

Well that’s what the ECB did to ON deposits. They are now charging 10 bps for them. The theory is that if the banks are charged they will lend more and velocity will increase. There is only €29 billion deposited though so it will likely have no effect. Draghi says no deflation though... LMAO!


48 posted on 06/05/2014 6:12:45 AM PDT by Wyatt's Torch
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To: Wyatt's Torch
I don't about recent times, but one of the time honored traditions in this country was a parent telling their child that if they emptied their piggy banks and took it to the bank, that they would magically make money on their principal.

I guess now the parents have to tell them that they need to get their ass going so they can save more and invest in strategic ETF's.

49 posted on 06/05/2014 6:19:19 AM PDT by catfish1957 (Face it!!!! The government in DC is full of treasonous bastards)
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To: Wyatt's Torch

ECB and our central bank are pretty much joined at the hip. It’s just a matter of time here.


50 posted on 06/05/2014 6:21:10 AM PDT by catfish1957 (Face it!!!! The government in DC is full of treasonous bastards)
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