Stocks gained nicely for the week, thanks entirely to Friday's massive, across-the-board gains. Otherwise, the week would have been flat to slightly lower.
Anybody who went into the weekend with giddiness over his or her market smarties shouldn't get too cocky because for the past 21 months, stocks have gone sideways.
Since February, 2018, the Dow Jones Industrial Average is up a whopping 200 points. That's a return of less than one percent over the course of nearly two years. Investors are free to believe that 2019 is a strong year for stocks, but that's only because of the massive fourth quarter selloff in 2018. All stocks have done this annum is rebound, with the end result being sideways for the whole.
Over the same time span, the NASDAQ is higher by about 500 points, a gain of less than seven percent; the S&P tacked on 100 points for a rise of roughly three percent, and the NYSE Composite has actually lost about 700 points, or minus five percent.
If that's not sideways, France isn't in Europe.
A repeat of last year's fourth quarter, when stocks slid in October and then again in December, would put most portfolios under water for the past two years and that's not something your financial advisor is going to be happy having to tell you.
Well, since this is Columbus Day, we can all bask in the knowledge that while the brave explorer of 1492 did not exactly prove the earth was round, he was headed in the right direction. Little could Columbus imagine that 500+ years hence, all of the round-earth progress would result in flat-lined equities.
Not up. Not down. Sideways.
At the Close, Friday, October 11, 2019:
Dow Jones Industrial Average: 26,816.59, +319.89 (+1.21%)
NASDAQ: 8,057.04, +106.26 (+1.34%)
S&P 500: 2,970.27, +32.14 (+1.09%)
NYSE Composite: 12,926.92, +160.92 (+1.26%)
For the Week:
Dow: +319.92 (+1.21%)
NASDAQ: +74.56 (+0.93%)
S&P 500: +18.26 (+0.62%)
NYSE Composite: +95.37 (+0.74%)
Showing posts with label trading. Show all posts
Showing posts with label trading. Show all posts
Monday, October 14, 2019
Tuesday, August 14, 2018
Stocks Post Gains As Turkey Currency Crisis Moves Off Front Page
Stocks rebounded sharply on Tuesday, ending a series of lower closes which saw the Dow drop four straight sessions.
Gains were made in response to the Turkey story moving off page one and onto the list of disturbing problems in the global economy. For what it's worth, thanks to the widespread use of computer algorithms, 21st century stock markets have become more a kind of knee-jerk referendum on current financial and political news, as opposed to the 20th century model with discounted future earnings.
Thus, measurements such as p/e ratios are shunned in favor of more momentum-style observations and manipulations and old models for valuations are routinely disregarded as old hat. In conjunction with the dominant 24-hour news cycle, trading in robust markets such as are available in the US and other developed countries has become a day-to-day operation for many of the greater brokerages.
No longer content with 10-20% annual returns, the proliferation of options, futures, ETFs and other market-distorting, derivative opportunities offer potential for hedging, pair trades, and a myriad of other exotic strategies, schemes, and systems.
Thus, when a currency fails, such as happened in Venezuela and is currently underway in Turkey, markets are prone to react with immediacy before returning to the status quo.
That's the story with today's gains, though the larger issue remains unresolved. The markets have had their say and now move on to the next big thing. This manner of shoulder-shrugging complacency is what makes markets more and more fragile, as, with each big event that has an initial response but no resolution, the underlying morass of problematic financial issues piles higher and higher.
Since the financial crisis of 2008-09, markets have increasingly operated inside a vacuum, fitted with appropriate blinders to geo-political changes and financial disruptions. It's assumed that central banks, which now control almost all of global finance, can handle any issues that may pop up, either with massive buying, interest rate adjusting, or soothing words from the top-most chiefs.
It's an odd way to make a buck, but that's the norm, for now.
Dow Jones Industrial Average August Scorecard:
At the Close, Tuesday, August 14, 2018:
Dow Jones Industrial Average: 25,299.92, +112.22 (+0.45%)
NASDAQ: 7,870.89, +51.19 (+0.65%)
S&P 500: 2,839.96, +18.03 (+0.64%)
NYSE Composite: 12,835.31, +71.65 (+0.56%)
Gains were made in response to the Turkey story moving off page one and onto the list of disturbing problems in the global economy. For what it's worth, thanks to the widespread use of computer algorithms, 21st century stock markets have become more a kind of knee-jerk referendum on current financial and political news, as opposed to the 20th century model with discounted future earnings.
Thus, measurements such as p/e ratios are shunned in favor of more momentum-style observations and manipulations and old models for valuations are routinely disregarded as old hat. In conjunction with the dominant 24-hour news cycle, trading in robust markets such as are available in the US and other developed countries has become a day-to-day operation for many of the greater brokerages.
No longer content with 10-20% annual returns, the proliferation of options, futures, ETFs and other market-distorting, derivative opportunities offer potential for hedging, pair trades, and a myriad of other exotic strategies, schemes, and systems.
Thus, when a currency fails, such as happened in Venezuela and is currently underway in Turkey, markets are prone to react with immediacy before returning to the status quo.
That's the story with today's gains, though the larger issue remains unresolved. The markets have had their say and now move on to the next big thing. This manner of shoulder-shrugging complacency is what makes markets more and more fragile, as, with each big event that has an initial response but no resolution, the underlying morass of problematic financial issues piles higher and higher.
Since the financial crisis of 2008-09, markets have increasingly operated inside a vacuum, fitted with appropriate blinders to geo-political changes and financial disruptions. It's assumed that central banks, which now control almost all of global finance, can handle any issues that may pop up, either with massive buying, interest rate adjusting, or soothing words from the top-most chiefs.
It's an odd way to make a buck, but that's the norm, for now.
Dow Jones Industrial Average August Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 8/1/18 | 25,333.82 | -81.37 | -81.37 |
| 8/2/18 | 25,326.16 | -7.66 | -89.03 |
| 8/3/18 | 25,462.58 | +136.42 | +55.05 |
| 8/6/18 | 25,502.18 | +39.60 | +94.65 |
| 8/7/18 | 25,628.91 | +126.73 | +221.38 |
| 8/8/18 | 25,583.75 | -45.16 | +176.22 |
| 8/9/18 | 25,509.23 | -74.52 | +101.70 |
| 8/10/18 | 25,313.14 | -196.09 | -94.39 |
| 8/13/18 | 25,187.70 | -125.44 | -219.83 |
| 8/14/18 | 25,299.92 | +112.22 | -107.61 |
At the Close, Tuesday, August 14, 2018:
Dow Jones Industrial Average: 25,299.92, +112.22 (+0.45%)
NASDAQ: 7,870.89, +51.19 (+0.65%)
S&P 500: 2,839.96, +18.03 (+0.64%)
NYSE Composite: 12,835.31, +71.65 (+0.56%)
Thursday, July 19, 2018
Crossroads
The best version of the Cream´s Classic ´´Crossroads´´ from the 1968 Album ´´Wheels of Fire´´ even though the video is from the live concert at Winterland.
Simply put, if the Dow cannot close above 25,335.74 (March 9, 2018) the existence of a bear market will be on full display.
Granted, that number is more than 1300 points below the January 23 high of 26,616.71, but the point is this secondary high has yet to be exceeded, despite at least four (probably five) attempts.
Assuredly, the US economy is currently healthy and robust, but so are the warts and wounds, the result of many years of mismanagement. The Fed, working against expansion via its selfish balance sheet reduction scheme and relentless interest rate hikes, adds fuel to the eventual deflationary fire.
Today's nosedive - only the third negative close in 13 trading days this month - may have been nothing more than consolidation (profit taking), but the trading level is suspiciously bearish, considering the failed highs of the past four months.
Keep eyes on the numbers. The have been, and will continue to provide significant market signals.
Dow Jones Industrial Average July Scorecard:
| Date | Close | Gain/Loss | Cum. G/L |
| 7/2/18 | 24,307.18 | +35.77 | +35.77 |
| 7/3/18 | 24,174.82 | -132.36 | -96.59 |
| 7/5/18 | 24,345.44 | +181.92 | +85.33 |
| 7/6/18 | 24,456.48 | +99.74 | +185.07 |
| 7/9/18 | 24,776.59 | +320.11 | +505.18 |
| 7/10/18 | 24,919.66 | +143.07 | +648.25 |
| 7/11/18 | 24,700.45 | -219.21 | +429.04 |
| 7/12/18 | 24,924.89 | +224.44 | +653.48 |
| 7/13/18 | 25,019.41 | +94.52 | +748.00 |
| 7/16/18 | 25,064.36 | +44.95 | +792.95 |
| 7/17/18 | 25,119.89 | +55.53 | +848.48 |
| 7/18/18 | 25,199.29 | +79.40 | +927.88 |
| 7/19/18 | 25,064.50 | -134.79 | +793.09 |
At the Close, Thursday, July 19, 2018:
Dow Jones Industrial Average: 25,064.50, -134.79 (-0.53%)
NASDAQ: 7,825.30, -29.15 (-0.37%)
S&P 500: 2,804.49, -11.13 (-0.40%)
NYSE Composite: 12,786.48, -36.75 (-0.29%)
Monday, January 9, 2017
Futures: Right Or Wrong Directional Trades; 12 Step Bloody Mary Redux
Stocks never had a chance on the first day of the first "full" week of trading (last week was only four days), dropping like rocks from a crumbling overpass at the open, only briefly showing any positive momentum and closing lower for the day, with the obvious exception of the wildly overpriced, speculative, and soon-to-crash NASDAQ.
The Dow refused to get even within earshot of 20,000, falling instead below 19,900 at the close, so the (so far) winning strategy of Fearless Rick remains intact. The peerless prognosticator called for "no Dow 20,000" by year-end 2016, and reiterates the same sentiment until June 2017, with a "may not" break over 20,000 until the year 2023.
It's a bold shot across the bow of the happy-happy, joy-joy "recovery" or the trumpeters of one Donald J. Trump, the president-elect who vows to "Make America Great Again." Not that Fearless Rick doubts the Donald; he backed his campaign from the start, predicting he would win the presidency as far back as December 31, 2016 (all the way at the end of the article), but the Trump years in the White House may be a calculated, "one step forward, two steps back," as radical policy shifts will cause some serious FUD (fear, uncertainty, doubt) and some liquidations that should have happened in 2008 or 2009 will occur under the Trump banner (see Sears, Mexico).
All of which brings up the point of futures and options, wherein one's ability to predict events beforehand is called into serious question. As a matter of fact, all investors are predisposed to make wagers on future events, whether they be into stocks, commodities or precious metals, because one would not "invest" in a company or anything without some idea that it would be worth more tomorrow or next month or next year than it is today.
Thus, investors fall into various camps, which, for matters better discussed elsewhere, are largely defined as "right until you're wrong" and "wrong until you're right."
The matter is simple, but real life examples provide the most descriptive narrative.
Take Fearless Rick's one-way bet on Dow 20,000. That's a case of being "right until you're wrong." So far, Rick is right and myriad derivative trades can be based upon his open principle, especially if one is to extend the time frame out to the ludicrous, or in this case, 2023.
Rick is also a precious metals speculator. In December he called for silver under $16 when it was trading in the range of $17 to $18. He was, early on, "wrong until he was right." The implications for investors - and one could take a lesson or two from the movie "The Big Short" for a glimpse at how extreme these future "wagers can become.
Speculation, prognostication and risk are not for everybody, especially those of feint heart. For the rest of us, it's a way of life.
At The Close 1/9/16:
Dow: 19,887.38, -76.42 (-0.38%)
NASDAQ: 5,531.82, +10.76 (0.19%)
S&P 500: 2,268.90, -8.08 (-0.35%)
NYSE Composite: 11,169.79, -67.83 (-0.60%)
And, just because it's the preferred weather for Bloody Mary's, Fearless Rick's 12-Step Bloody Mary™
1. Glass
2. Ice
3. Vodka
4. garlic pepper
5. hot sauce
6. ground black pepper
7. worcestershire sauce
8. celery seed
9. tomato juice
10. lime (or lemon) juice
11. horseradish
12. combine, stir and drink.
Apologies to alcoholics everywhere, from drunks around the world.
The Dow refused to get even within earshot of 20,000, falling instead below 19,900 at the close, so the (so far) winning strategy of Fearless Rick remains intact. The peerless prognosticator called for "no Dow 20,000" by year-end 2016, and reiterates the same sentiment until June 2017, with a "may not" break over 20,000 until the year 2023.
It's a bold shot across the bow of the happy-happy, joy-joy "recovery" or the trumpeters of one Donald J. Trump, the president-elect who vows to "Make America Great Again." Not that Fearless Rick doubts the Donald; he backed his campaign from the start, predicting he would win the presidency as far back as December 31, 2016 (all the way at the end of the article), but the Trump years in the White House may be a calculated, "one step forward, two steps back," as radical policy shifts will cause some serious FUD (fear, uncertainty, doubt) and some liquidations that should have happened in 2008 or 2009 will occur under the Trump banner (see Sears, Mexico).
All of which brings up the point of futures and options, wherein one's ability to predict events beforehand is called into serious question. As a matter of fact, all investors are predisposed to make wagers on future events, whether they be into stocks, commodities or precious metals, because one would not "invest" in a company or anything without some idea that it would be worth more tomorrow or next month or next year than it is today.
Thus, investors fall into various camps, which, for matters better discussed elsewhere, are largely defined as "right until you're wrong" and "wrong until you're right."
The matter is simple, but real life examples provide the most descriptive narrative.
Take Fearless Rick's one-way bet on Dow 20,000. That's a case of being "right until you're wrong." So far, Rick is right and myriad derivative trades can be based upon his open principle, especially if one is to extend the time frame out to the ludicrous, or in this case, 2023.
Rick is also a precious metals speculator. In December he called for silver under $16 when it was trading in the range of $17 to $18. He was, early on, "wrong until he was right." The implications for investors - and one could take a lesson or two from the movie "The Big Short" for a glimpse at how extreme these future "wagers can become.
Speculation, prognostication and risk are not for everybody, especially those of feint heart. For the rest of us, it's a way of life.
It seems to be a law of nature, inflexible and inexorable, that those who will not risk cannot win.--John Paul Jones
At The Close 1/9/16:
Dow: 19,887.38, -76.42 (-0.38%)
NASDAQ: 5,531.82, +10.76 (0.19%)
S&P 500: 2,268.90, -8.08 (-0.35%)
NYSE Composite: 11,169.79, -67.83 (-0.60%)
And, just because it's the preferred weather for Bloody Mary's, Fearless Rick's 12-Step Bloody Mary™
1. Glass
2. Ice
3. Vodka
4. garlic pepper
5. hot sauce
6. ground black pepper
7. worcestershire sauce
8. celery seed
9. tomato juice
10. lime (or lemon) juice
11. horseradish
12. combine, stir and drink.
Apologies to alcoholics everywhere, from drunks around the world.
Monday, August 22, 2016
Slow Week For Stocks Ends With Losses
Despite various new highs, stocks traded in a very tight range over the course of the week.
Not surprisingly, August is the most popular time for vacations, not exclusive of stock brokers, traders, managers and all those who participate in making the markets.
Friday's trading was particularly sluggish, with all the major averages finishing in the red, albeit, slightly.
The weekly figures were hardly encouraging to either bears or bulls, with the main indices offering losses or gains of fractions of one percentage point, the S&P the least affected, down 0.18 points.
Leading into the final full week of August trading, with monthly options already having expired (Friday), another week of widespread complacency is expected.
Figures for Friday:
Dow Jones Industrial Average
18,552.57, -45.13 (-0.24%)
NASDAQ
5,238.38, -1.77 (-0.03%)
S&P 500
2,183.87, -3.15 (-0.14%)
NYSE Composite
10,829.15, -33.86 (-0.31%)
For the Week:
Dow: -23.90 (-0.13%)
S&P 500: -0.18 (-0.01%)
NASDAQ: +5.48 (0.10%)
NYSE Composite: +6.74 (0.06%)
Not surprisingly, August is the most popular time for vacations, not exclusive of stock brokers, traders, managers and all those who participate in making the markets.
Friday's trading was particularly sluggish, with all the major averages finishing in the red, albeit, slightly.
The weekly figures were hardly encouraging to either bears or bulls, with the main indices offering losses or gains of fractions of one percentage point, the S&P the least affected, down 0.18 points.
Leading into the final full week of August trading, with monthly options already having expired (Friday), another week of widespread complacency is expected.
Figures for Friday:
Dow Jones Industrial Average
18,552.57, -45.13 (-0.24%)
NASDAQ
5,238.38, -1.77 (-0.03%)
S&P 500
2,183.87, -3.15 (-0.14%)
NYSE Composite
10,829.15, -33.86 (-0.31%)
For the Week:
Dow: -23.90 (-0.13%)
S&P 500: -0.18 (-0.01%)
NASDAQ: +5.48 (0.10%)
NYSE Composite: +6.74 (0.06%)
Friday, May 13, 2016
Friday The 13th Sell-Off Nearly Breaks Through Downside Range On Dow Industrials
Yesterday, Money Daily extolled the virtues of ignoring intra-day movement on the major indices and pointed out that the last time the Dow Jones Industrial Average (DJIA) closed below the magic mark at 17,500, was nearly two months ago, on March 18 (17,481.89).
The waterfall decline on Dow stocks Friday put an exclamation mark on that post, as stocks fell to within a whisper of the bottom end of the tight range with 18,000 as the top and 17,500 as the bottom.
Friday's trading also assured that US indices would end the week in the red for the third straight week and fourth time in the past seven, suggesting the five closes above 18,000 in mid-April were aberrations rather than normative market behavior.
Thus, despite a completely phony report from the US Census that saw sales by U.S. retailers leap 1.3% in April, marking the biggest month-over-month gain in a year, the exodus from stocks continued unabated. While the indices have regained all of their losses from January and early February, institutional money has been selling all along, leaving the market largely in the hands of small investors and... please be seated, because this is a shocker... central banks.
It's widely understood that the Bank of Japan, that country's central bank, is heavily invested in its own stock market, propping up prices on the Nikkei, apparently to no avail, since the benchmark index is down sharply this year, and, unlike its counterpart in the US, has not rallied back to glory.
The Nikkei made a triple top last summer with peak closes in the 20,860 range. On Friday, the Nikkei closed at 16,412.21 and is down sharply on the year (it closed out 2015 at 19,033). Make no mistake, off its highs from June through August of last year, the Nikkei has fallen into bear market territory, even though the Bank of Japan has been furiously buying shares in the largest companies, as explained in this article by none other than the Wall Street Journal.
It was reported just the other day that the Swiss National Bank was wisely using some of its money to buy shares of Apple (AAPL) as Carl Icahn was liquidating his holdings in the company and the stock was slumping to two-year lows.
Is there any wonder that people have little faith in their governments and are rapidly losing faith in other institutions, especially those which conjure money out of thin air. When central banks are actively bidding in markets of all sorts - from precious metals to oil to stocks and bonds - how can there be any rational approach to investing or any kind of reasonable price discovery. Everything is subject to the inane whims of people in ivory towers who think they know more than anybody else about how the world should operate. In truth, they are destroying the system that spewed out their jobs and paychecks.
When people finally awaken to the massive misallocation of capital and enormous malinvestments by the issuers of paper money it's going to be too late. Central banks cannot - at least not in a rational world - buy up shares of everything in order to keep the global economy humming along while at the same time issuing critical mountains of debt in the form of digital deposits and bonds (which they are, in effect, also buying from themselves).
There will be a crash, a day of reckoning, probably multiple ones, when the cnetral bank global ponzi scheme is finally exposed, and that could happen at any time.
If the stock markets begin breaking down, it should be seen as a sign that the final chapter of extraordinary central bank policy which began with the financial crisis in 2008, is underway. The endgame is likely to resemble 50-70% declines in major stock indices, 10-year interest rates at zero of less (already there in some countries) and massive disruptions of businesses, bank closures, or worse, outright confiscation of deposits by the banks holding trillions of dollars, yen, yuan, euros and pounds.
This is not fiction, but the reality of the past eight years of nightmare economics spawned by the Federal Reserve and their brethren central bankers.
But, as it has been since the collapse of the global economy in 2008, when central banks have endless supplies of fictional fiat to spend, crashes like Friday's can be aborted, as was this one, right at 3:00 pm, with just an hour left in the trading day. Agents of the Fed stepped in at the most dangerous moment to hold the line at 17,500.
André Maginot would be impressed.
The only problem is that this kind of madness cannot go on forever without incredibly dangerous distortions and serious, lasting repercussions.
For the week:
DOW: -205.31 (-1.16%)
S&P 500: -10.53 (-0.51%)
NASDAQ: -18.48 (-0.39)
Friday's Fall:
S&P 500: 2,046.61, -17.50 (0.85%)
Dow: 17,535.32, -185.18 (1.05%)
NASDAQ: 4,717.68, -19.66 (0.41%)
Crude Oil 46.32 -0.81% Gold 1,274.80 +0.28% EUR/USD 1.1308 -0.58% 10-Yr Bond 1.70 -2.96% Corn 390.50 +0.39% Copper 2.08 +0.14% Silver 17.16 +0.30% Natural Gas 2.10 -2.55% Russell 2000 1,102.44 -0.56% VIX 15.04 +4.37% BATS 1000 20,677.17 0.00% GBP/USD 1.4359 -0.61% USD/JPY 108.6400 -0.40%
The waterfall decline on Dow stocks Friday put an exclamation mark on that post, as stocks fell to within a whisper of the bottom end of the tight range with 18,000 as the top and 17,500 as the bottom.
Friday's trading also assured that US indices would end the week in the red for the third straight week and fourth time in the past seven, suggesting the five closes above 18,000 in mid-April were aberrations rather than normative market behavior.
Thus, despite a completely phony report from the US Census that saw sales by U.S. retailers leap 1.3% in April, marking the biggest month-over-month gain in a year, the exodus from stocks continued unabated. While the indices have regained all of their losses from January and early February, institutional money has been selling all along, leaving the market largely in the hands of small investors and... please be seated, because this is a shocker... central banks.
It's widely understood that the Bank of Japan, that country's central bank, is heavily invested in its own stock market, propping up prices on the Nikkei, apparently to no avail, since the benchmark index is down sharply this year, and, unlike its counterpart in the US, has not rallied back to glory.
The Nikkei made a triple top last summer with peak closes in the 20,860 range. On Friday, the Nikkei closed at 16,412.21 and is down sharply on the year (it closed out 2015 at 19,033). Make no mistake, off its highs from June through August of last year, the Nikkei has fallen into bear market territory, even though the Bank of Japan has been furiously buying shares in the largest companies, as explained in this article by none other than the Wall Street Journal.
It was reported just the other day that the Swiss National Bank was wisely using some of its money to buy shares of Apple (AAPL) as Carl Icahn was liquidating his holdings in the company and the stock was slumping to two-year lows.
Is there any wonder that people have little faith in their governments and are rapidly losing faith in other institutions, especially those which conjure money out of thin air. When central banks are actively bidding in markets of all sorts - from precious metals to oil to stocks and bonds - how can there be any rational approach to investing or any kind of reasonable price discovery. Everything is subject to the inane whims of people in ivory towers who think they know more than anybody else about how the world should operate. In truth, they are destroying the system that spewed out their jobs and paychecks.
When people finally awaken to the massive misallocation of capital and enormous malinvestments by the issuers of paper money it's going to be too late. Central banks cannot - at least not in a rational world - buy up shares of everything in order to keep the global economy humming along while at the same time issuing critical mountains of debt in the form of digital deposits and bonds (which they are, in effect, also buying from themselves).
There will be a crash, a day of reckoning, probably multiple ones, when the cnetral bank global ponzi scheme is finally exposed, and that could happen at any time.
If the stock markets begin breaking down, it should be seen as a sign that the final chapter of extraordinary central bank policy which began with the financial crisis in 2008, is underway. The endgame is likely to resemble 50-70% declines in major stock indices, 10-year interest rates at zero of less (already there in some countries) and massive disruptions of businesses, bank closures, or worse, outright confiscation of deposits by the banks holding trillions of dollars, yen, yuan, euros and pounds.
This is not fiction, but the reality of the past eight years of nightmare economics spawned by the Federal Reserve and their brethren central bankers.
But, as it has been since the collapse of the global economy in 2008, when central banks have endless supplies of fictional fiat to spend, crashes like Friday's can be aborted, as was this one, right at 3:00 pm, with just an hour left in the trading day. Agents of the Fed stepped in at the most dangerous moment to hold the line at 17,500.
André Maginot would be impressed.
The only problem is that this kind of madness cannot go on forever without incredibly dangerous distortions and serious, lasting repercussions.
For the week:
DOW: -205.31 (-1.16%)
S&P 500: -10.53 (-0.51%)
NASDAQ: -18.48 (-0.39)
Friday's Fall:
S&P 500: 2,046.61, -17.50 (0.85%)
Dow: 17,535.32, -185.18 (1.05%)
NASDAQ: 4,717.68, -19.66 (0.41%)
Crude Oil 46.32 -0.81% Gold 1,274.80 +0.28% EUR/USD 1.1308 -0.58% 10-Yr Bond 1.70 -2.96% Corn 390.50 +0.39% Copper 2.08 +0.14% Silver 17.16 +0.30% Natural Gas 2.10 -2.55% Russell 2000 1,102.44 -0.56% VIX 15.04 +4.37% BATS 1000 20,677.17 0.00% GBP/USD 1.4359 -0.61% USD/JPY 108.6400 -0.40%
Thursday, May 12, 2016
(NOT) Paying Attention To Intra-Day Swings
Shortly after the open today, the Dow had shot up 88 points.
By noon, it was down 87, thus, making a 1% move in the course of 2 1/2 hours.
Coincidence or central planning aside, the upside move equaled the downside move, nearly to the penny.
From noon until 2:00 pm, the Dow index clawed back all of the losses and was trading positively again, up around 40 points, or, just about half of the early day gains. Eventually, the Dow closed up a few points, more or less unchanged.
Day-traders may be scratching their collective skulls over this odd pattern, though it should be noted that almost none of the moves - to the up or downside - had anything at all to do with fundamentals, sentiment, forward-thinking, the presidential election cycle, or the price of pork in China.
It probably had everything to do with front-running algos which dominate the so-called "trading," which has become more of a skimming operation by firms like Citadel and other adherents of non-free market operations.
The headline financial media will try to come up with story lines to match the mood, though none of them can adequately pass even the most rudimentary smell test. The financial talking heads in macro-land are faking it as best they can, while the market remains stuck in a no-man's land that's been in place for just about a year now (taking the long view), or, a truly narrow range on the Dow between 17,500 and 18,000 since March 18.
On 34 of the past 39 trading days (including today) the Dow closed within that range. Of the five days it closed outside that range, all of them were above the 18,000 line, the highest being 18,096, on April 20.
Essentially, stocks have been going nowhere for quite some time, especially over the past month and a half, in which the total range was roughly three percent.
Which brings us to the question of intra-day moves and whether or not to pay them any mind. Unless one is engaged in betting with friends on market swings, or day-trading (an occupation which can put your whole house in jeopardy), intra-day swings should be discounted dramatically. The old saying, "the trend is your friend," doesn't apply unless you're looking of weeks, months or years.
Going Nowhere, Slowly:
S&P 500: 2,064.11, -0.35 (0.02%)
Dow: 17,720.50, +9.38 (0.05%)
NASDAQ: 4,737.33, -23.35 (0.49%)
Crude Oil 46.39 -0.66% Gold 1,267.40 -0.30% EUR/USD 1.1376 +0.02% 10-Yr Bond 1.76 +1.15% Corn 387.50 -0.39% Copper 2.07 -0.05% Silver 17.08 -0.16% Natural Gas 2.13 -0.97% Russell 2000 1,108.60 -0.55% VIX 14.41 -1.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4445 -0.01% USD/JPY 109.0300 -0.05%
By noon, it was down 87, thus, making a 1% move in the course of 2 1/2 hours.
Coincidence or central planning aside, the upside move equaled the downside move, nearly to the penny.
From noon until 2:00 pm, the Dow index clawed back all of the losses and was trading positively again, up around 40 points, or, just about half of the early day gains. Eventually, the Dow closed up a few points, more or less unchanged.
Day-traders may be scratching their collective skulls over this odd pattern, though it should be noted that almost none of the moves - to the up or downside - had anything at all to do with fundamentals, sentiment, forward-thinking, the presidential election cycle, or the price of pork in China.
It probably had everything to do with front-running algos which dominate the so-called "trading," which has become more of a skimming operation by firms like Citadel and other adherents of non-free market operations.
The headline financial media will try to come up with story lines to match the mood, though none of them can adequately pass even the most rudimentary smell test. The financial talking heads in macro-land are faking it as best they can, while the market remains stuck in a no-man's land that's been in place for just about a year now (taking the long view), or, a truly narrow range on the Dow between 17,500 and 18,000 since March 18.
On 34 of the past 39 trading days (including today) the Dow closed within that range. Of the five days it closed outside that range, all of them were above the 18,000 line, the highest being 18,096, on April 20.
Essentially, stocks have been going nowhere for quite some time, especially over the past month and a half, in which the total range was roughly three percent.
Which brings us to the question of intra-day moves and whether or not to pay them any mind. Unless one is engaged in betting with friends on market swings, or day-trading (an occupation which can put your whole house in jeopardy), intra-day swings should be discounted dramatically. The old saying, "the trend is your friend," doesn't apply unless you're looking of weeks, months or years.
Going Nowhere, Slowly:
S&P 500: 2,064.11, -0.35 (0.02%)
Dow: 17,720.50, +9.38 (0.05%)
NASDAQ: 4,737.33, -23.35 (0.49%)
Crude Oil 46.39 -0.66% Gold 1,267.40 -0.30% EUR/USD 1.1376 +0.02% 10-Yr Bond 1.76 +1.15% Corn 387.50 -0.39% Copper 2.07 -0.05% Silver 17.08 -0.16% Natural Gas 2.13 -0.97% Russell 2000 1,108.60 -0.55% VIX 14.41 -1.91% BATS 1000 20,677.17 0.00% GBP/USD 1.4445 -0.01% USD/JPY 109.0300 -0.05%
Thursday, April 7, 2016
Stocks Slammed Back Into The Red As Resistance Has Been Met
The stock market is getting too predictable, and when that happens, it's generally a sign that change is at hand.
Not individual stocks, mind you, but at the macro level - entire indices, countries, or specific sectors - movement is largely telegraphed, as if some floor brokers have bullhorns shouting out the trades of the day, the week, the quarter.
On an impersonal level, US indices are ready for another bruising earnings season, having already touched recent highs, now dipping into negative territory for the year. It's all about the flow at this juncture, and the flow is out of stocks and into cash, or bonds, or any place safe.
All of this begs out for the buy-and-hold mentality that persisted during the true heyday of the American stock markets, from the mid-80s through Greenspan's irrational exuberance regime of the late 90s, but that epoch is long past and investors must be more nimble and adroit, being that there are so many more pitfalls and potholes in modern markets.
Above all, the Fed's role is out-sized and outdated. They've simply overstayed their welcome in equity markets, politicizing them to such an extent that honest trading on fundamentals has become passe - a relic from a long-lost civilization.
And so we embark into earnings season with the worst-looking week in nearly two months. Stocks were pounded without mercy on Thursday, setting up either a massive bounce on Friday or a continuation of the dolorous trading that has prevailed for the better part of this week.
As stated here yesterday, resistance has been met, and the only way out is to the downside. How far? That kind of conceit will kill you and leave your heirs penniless.
Many commodities - take your pick, but steer clear of oil - are close to short-term lows and may be the way ahead, though it would be advisable to tread very lightly for at least the next few months.
S&P 500: 2,041.91, -24.75 (1.20%)
Dow: 17,541.96, -174.09 (0.98%)
NASDAQ: 4,848.37, -72.35 (1.47%)
Crude Oil 37.54 -0.56% Gold 1,242.00 +1.49% EUR/USD 1.1377 -0.14% 10-Yr Bond 1.69 -3.65% Corn 361.25 +0.91% Copper 2.08 -3.01% Silver 15.23 +1.17% Natural Gas 2.02 +5.65% Russell 2000 1,092.79 -1.45% VIX 16.16 +14.69% BATS 1000 20,682.61 0.00% GBP/USD 1.4057 -0.45% USD/JPY 108.1250 -1.49%
Not individual stocks, mind you, but at the macro level - entire indices, countries, or specific sectors - movement is largely telegraphed, as if some floor brokers have bullhorns shouting out the trades of the day, the week, the quarter.
On an impersonal level, US indices are ready for another bruising earnings season, having already touched recent highs, now dipping into negative territory for the year. It's all about the flow at this juncture, and the flow is out of stocks and into cash, or bonds, or any place safe.
All of this begs out for the buy-and-hold mentality that persisted during the true heyday of the American stock markets, from the mid-80s through Greenspan's irrational exuberance regime of the late 90s, but that epoch is long past and investors must be more nimble and adroit, being that there are so many more pitfalls and potholes in modern markets.
Above all, the Fed's role is out-sized and outdated. They've simply overstayed their welcome in equity markets, politicizing them to such an extent that honest trading on fundamentals has become passe - a relic from a long-lost civilization.
And so we embark into earnings season with the worst-looking week in nearly two months. Stocks were pounded without mercy on Thursday, setting up either a massive bounce on Friday or a continuation of the dolorous trading that has prevailed for the better part of this week.
As stated here yesterday, resistance has been met, and the only way out is to the downside. How far? That kind of conceit will kill you and leave your heirs penniless.
Many commodities - take your pick, but steer clear of oil - are close to short-term lows and may be the way ahead, though it would be advisable to tread very lightly for at least the next few months.
S&P 500: 2,041.91, -24.75 (1.20%)
Dow: 17,541.96, -174.09 (0.98%)
NASDAQ: 4,848.37, -72.35 (1.47%)
Crude Oil 37.54 -0.56% Gold 1,242.00 +1.49% EUR/USD 1.1377 -0.14% 10-Yr Bond 1.69 -3.65% Corn 361.25 +0.91% Copper 2.08 -3.01% Silver 15.23 +1.17% Natural Gas 2.02 +5.65% Russell 2000 1,092.79 -1.45% VIX 16.16 +14.69% BATS 1000 20,682.61 0.00% GBP/USD 1.4057 -0.45% USD/JPY 108.1250 -1.49%
Wednesday, April 6, 2016
Resistance Is Palpable For Dow, S&P; Trades Dying Slow Death
Taking a look at the weekly chart of the Dow and the S&P, it becomes evident why the averages haven't been able to break through this current range to new, higher highs.
The congestion and resistance at 17,900-18,000 on the Dow, and 2090-2120 on the S&P are as plain as a bright summer day, and thus, what had been considered a Fed-driven market has now become a chartist's nightmare.
Unless there's some good reason for the averages to go higher - and currently there isn't - there's only one way for stocks to go, and that direction would not be in the best interest of most investors, fund managers or pension hopefuls.
Naturally, the market continues to look to the Fed for comfort and trading rationale, but it is becoming more and more difficult for the monetary magicians in the Eccles Building to conjure up increasingly complicated arguments to support an economy (US and global) that, for all intents and purposes, looks to be standing on a foundation built of sand.
In other words, the market is about to go somewhere shortly, and bets are good that it will not be much higher. Earnings have begun to trickle in for the first quarter, and expectations are for another sequential decline in overall top-and-bottom line growth.
Then again, Janet Yellen is god, right?
With the Dollar/Yen carry trade nearing extinction (109.7450), perhaps one should consider a world in which there are no winning trades, such as is the fate of many so-called "home-gamers."
With volatility being wrung out of markets on a regular basis through HFT, that is a consideration that must be taken seriously.
Fraud is on sale, but it cannot be had cheaply.
S&P 500 Futures: 2,059.25, +20.50 (1.01%)
Dow Futures: 17,623.00, +96.00 (0.55%)
NASDAQ Futures: 4,532.00, +62.50 (1.40%)
Crude Oil 37.76 +5.21% Gold 1,224.00 -0.46% EUR/USD 1.1399 +0.04% 10-Yr Bond 1.75 +1.62% Corn 358.00 +0.35% Copper 2.14 +0.21% Silver 15.06 -0.34% Natural Gas 1.90 -2.66% Russell 2000 1,108.81 +1.18% VIX 14.09 -8.63% BATS 1000 20,682.61 0.00% GBP/USD 1.4131 +0.08% USD/JPY 109.7450 -0.01%
The congestion and resistance at 17,900-18,000 on the Dow, and 2090-2120 on the S&P are as plain as a bright summer day, and thus, what had been considered a Fed-driven market has now become a chartist's nightmare.
Unless there's some good reason for the averages to go higher - and currently there isn't - there's only one way for stocks to go, and that direction would not be in the best interest of most investors, fund managers or pension hopefuls.
Naturally, the market continues to look to the Fed for comfort and trading rationale, but it is becoming more and more difficult for the monetary magicians in the Eccles Building to conjure up increasingly complicated arguments to support an economy (US and global) that, for all intents and purposes, looks to be standing on a foundation built of sand.
In other words, the market is about to go somewhere shortly, and bets are good that it will not be much higher. Earnings have begun to trickle in for the first quarter, and expectations are for another sequential decline in overall top-and-bottom line growth.
Then again, Janet Yellen is god, right?
With the Dollar/Yen carry trade nearing extinction (109.7450), perhaps one should consider a world in which there are no winning trades, such as is the fate of many so-called "home-gamers."
With volatility being wrung out of markets on a regular basis through HFT, that is a consideration that must be taken seriously.
Fraud is on sale, but it cannot be had cheaply.
S&P 500 Futures: 2,059.25, +20.50 (1.01%)
Dow Futures: 17,623.00, +96.00 (0.55%)
NASDAQ Futures: 4,532.00, +62.50 (1.40%)
Crude Oil 37.76 +5.21% Gold 1,224.00 -0.46% EUR/USD 1.1399 +0.04% 10-Yr Bond 1.75 +1.62% Corn 358.00 +0.35% Copper 2.14 +0.21% Silver 15.06 -0.34% Natural Gas 1.90 -2.66% Russell 2000 1,108.81 +1.18% VIX 14.09 -8.63% BATS 1000 20,682.61 0.00% GBP/USD 1.4131 +0.08% USD/JPY 109.7450 -0.01%
Sunday, October 30, 2011
Researching Online Brokerages Worth the Effort
While many retail investors have fled from highly volatile equity markets and outflows from equity mutual funds have reached historic proportions (ICI reported that investor holdings in stock mutual funds decreased by 9.5% in September), the ongoing zero interest rate policy of the Federal Reserve has lowered the return on Treasuries and all other fixed asset classes likewise offer returns that barely, if at all, keep pace with inflation.
As stocks made huge moves in October, many retail investors missed out, and it's likely that more will pile into the rally, sensing that the problems stemming from Europe have passed and it's once again safe to invest in stocks. That rationale may or may not prove correct, but, whatever the case, being at least partially invested in stocks is a solid strategy in good times or bad.
If one is inclined to jump in, the easiest way is to plug right in from the comfort of home or office through one of the many online brokerages available. The range of online brokerage products and services has expanded greatly since the infancy of the internet back in the late 1990s, and it pays to research the various options available.
According to a recent ICI report, households with internet access owning mutual funds is nearly universal, with ninety-one percent of all households owning mutual funds have internet access with ninety-eight percent aged 35-44 connected to the internet from their homes.
Additionally, the report goes on to say that eighty-four percent of mutual fund–owning households with internet access went online for financial purposes, such as to check their bank or investment accounts, obtain investment information, or buy or sell investments, though only nineteen percent used the internet for trading purposes, so there is still plenty of room for more home use of online brokerages.
What any good online brokerage provides in the way of online brokerage products and services starts with a stable and easy-to-use interface, simplifying the process of buying or selling stocks, ETFs or mutual funds. Beyond that, one would be advised to seek a brokerage that does not have maintenance or inactivity fees, offers free dividend reinvestment plans and options trading at a low price per contract.
Other features may include free research tools such as screeners, tracking and historical comparisons, but fees are by far the main differentiator of online brokerages. Many offer packages of free trades for new users, low cost stock trades and the ability to have broker-assisted trades for special circumstances. Fees for mutual fund trading should be minimal to free. For users who wish to trade on margin, rates vary widely and should be investigated thoroughly. The ability to transfer funds without hassle over the internet, to and from a personal checking account should be standard. Low minimum requirements, both for an initial funding and ongoing transfers is also a must.
A number of brokerages have expanded beyond stocks and mutual funds to forex, commodities and bonds, so an astute investor should prepare a list of requirements and priorities before opening any online account.
Stocks inherently have risk, so there's no reason to add to the risk and frustration by choosing an online brokerage that doesn't fulfill all of one's needs.
As stocks made huge moves in October, many retail investors missed out, and it's likely that more will pile into the rally, sensing that the problems stemming from Europe have passed and it's once again safe to invest in stocks. That rationale may or may not prove correct, but, whatever the case, being at least partially invested in stocks is a solid strategy in good times or bad.
If one is inclined to jump in, the easiest way is to plug right in from the comfort of home or office through one of the many online brokerages available. The range of online brokerage products and services has expanded greatly since the infancy of the internet back in the late 1990s, and it pays to research the various options available.
According to a recent ICI report, households with internet access owning mutual funds is nearly universal, with ninety-one percent of all households owning mutual funds have internet access with ninety-eight percent aged 35-44 connected to the internet from their homes.
Additionally, the report goes on to say that eighty-four percent of mutual fund–owning households with internet access went online for financial purposes, such as to check their bank or investment accounts, obtain investment information, or buy or sell investments, though only nineteen percent used the internet for trading purposes, so there is still plenty of room for more home use of online brokerages.
What any good online brokerage provides in the way of online brokerage products and services starts with a stable and easy-to-use interface, simplifying the process of buying or selling stocks, ETFs or mutual funds. Beyond that, one would be advised to seek a brokerage that does not have maintenance or inactivity fees, offers free dividend reinvestment plans and options trading at a low price per contract.
Other features may include free research tools such as screeners, tracking and historical comparisons, but fees are by far the main differentiator of online brokerages. Many offer packages of free trades for new users, low cost stock trades and the ability to have broker-assisted trades for special circumstances. Fees for mutual fund trading should be minimal to free. For users who wish to trade on margin, rates vary widely and should be investigated thoroughly. The ability to transfer funds without hassle over the internet, to and from a personal checking account should be standard. Low minimum requirements, both for an initial funding and ongoing transfers is also a must.
A number of brokerages have expanded beyond stocks and mutual funds to forex, commodities and bonds, so an astute investor should prepare a list of requirements and priorities before opening any online account.
Stocks inherently have risk, so there's no reason to add to the risk and frustration by choosing an online brokerage that doesn't fulfill all of one's needs.
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