So we have BOE most likely cutting rates Thursday, the FED almost certainly not raising rates again in 2 weeks, and the BOJ considering "helicopter money". Possibly bank earnings will derail this rally and retest ATH level, but I can't imagine the markets going back down in the near term with so much monetary accommodation. Still this market seems to do the exact opposite of my expectations lately so who knows.
This is the type of market were you have to sit idle for longer until funds show their hands. The move from $198.50 to $215.00 SPY in a matter of weeks is not only suspicious, but it was planned for from the very beginning. Let me put it this way. BREXIT was neither the cause or result of why the S&P 500 moved 270 points in the last two weeks. This was all set in motion months in advance. And I can guarantee they will do it again using some other lame excuse to divert people's attention. Same story, same characters, different narrative. Buyer of gold, stocks and the US Dollar on pullbacks for the long term (as a basket). I am inching closer to selling bonds soon. Soon enough yields will bottom. TBT is the vehicle of choice. All this non-sensical chatter of further stimulus being the cause why yields continue to travel south is actually what is setting the stage for a bottom in yields as capital transitions to stocks, gold and the Dollar. This trend has been set in motion since the start of the year. You don't get all three of these asset classes trending in the same direction if a bigger change is not afoot. This is the next big trade heading into 2017 - 2020. Be wary once correlations break. That is were the bulk of the money has and will continue to be made. The Yen carry trade everyone was so accustomed since late 2012 broke down at the start of the year. Since then, stocks, gold and the US Dollar have rallied in sync. With the Yen carry trade restored, there will be a point soon were the positive correlation between the Dollar and gold will break. Both of these assets classes cannot rise in tandem for one is the inverse function of the other. That is when you'll get your next directional change in markets. That is what you want to pay attention to. Buyer of stock, gold and the US Dollar on dips for the long term, period.
Wait. So we were not supposed to buy markets shortly after the BREXIT vote, and with market at new highs, now were supposed to buy the market? Oh God. These people have no principles. They truly are horrible. Now we have to buy gold too? No. I'll wait for it to come in, thank you.
I don't know if it was just fear, Rock. It definitely played a part, but to reduce it to a single factor is misleading. Misinformation had more to do with it. The media painted it like it was an apocalyptic event when all it was Britain regaining its sovereignty from an unelected body called the EU. You understand markets well to know capital moves from one end to the other (like energy). If there were truly negative economic repercussions from the whole BREXIT ordeal, capital would have found its way to the US as a relative save heaven play. In fact, this is part of the reason why you saw the Dollar and the S&P rally in lockstep well before European indices caught a bid. I just don't think reducing an event to a single element is a fair way of representing the world we live in. Its just never ceases to amaze me easily investors get duped time and time again. Offer them any reasonable excuse, and they'll believe it. What is lost in the middle is money.
It's only "misinformation" if you pay attention to it. The phenomena you speak of is nothing new though. This very game of charades to induce the "herd response" has been played for as long as the markets have been active and its NEVER going to change. Information will NEVER be disseminated efficiently, accurately, and/or fairly ..... not among the average Joes anyway. It's their game - we just trade/invest in it.
i bought the dip off brexit, probably made my biggest return on the year thanks to it. i will continue to buy the dip until it stops working lol.
When you think about it, fear arises out of misinformation. So in that sense, I suppose your right. People like to reduce everything to its simplest form without bothering to explore why something is or how it came about. Its what people feel most comfortable with. And thats the problem. We continually look for answers that feel the least foreign to us and atomically assume it to be true or 'right'. Again, what is lost in the middle is money and actual information. When it comes to trading, everyone in the know understands the value of information. Without it, you might as well dedicate your life to something else. And people ask themselves time and time how something could had happened when it was alway laying in plain sight. Everything. No one bothered to actually look. Enough of my rant. But its just deplorable the lengths how the mind gets constantly raped day in and day out by the media. In trading, if you fall victim to this you will lose money. I speak if this because I've fallen victim to it. And until you realize how the game is played, you own;t make money in this long term. Buy to each his own.
Your spot on with you first and last sentence. I guess what I was trying to says was that it pays to look at correlations and disregard everything else. The current correlation of a rising Dollar, gold and stock will end now that the Yen carry trade has seemingly been introduced. But as part of a long term multi-asset portfolio, remaining long the Dollar, gold and stocks will prove to be the trade (if there ever was one).
IMO you're far better off investigating correlations than you are trying to decipher the labyrinth of headline news. I dunno why anyone bothers with the latter as the sole reason to make a trading/investing decision. Boils down to hubris and overconfidence for many in that regard. There's some merit to "simplifying" markets though. That's what I've done. I developed a framework from which I believe markets work - tossed out all the fancy retail indicators and stopped reading headlines. Hate to say it, but it's also why I'm not as active on forums anymore. I'm not a perfect trader by any means ..... but it keeps me on the straight and narrow.
I agree. Trading is about turning the complex into something simple that works for you, period. For most traders, that involves forgetting media and social media exist all together for its a source of misinformation that is surely going to trample you at some point or another. Like you, I've shunned away from HSM over the past few months because its added little value to my trading. This does't mean its not a great community with great content. Its just that it didn't do much for what I was trying to accomplish as an investor. ------------------ The re-introduction of the Yen carry trade should levitate markets near term but pay close attention once the correlation between Dollar, gold and stocks break in autumn and into winter. Whichever breaks form the pack first is likely give the initial head fake reaction before the last leg of this uptrend (2016 - 2019) is consummated to upside ala 2013.
@rock and big bull I do agree that one have to weed out what the media and so called gurus are pitching cause at the end of the day I believe it's their book they are pitching... the reverse side so when you think they are buying it's the other way around. I do believe that if we old timers can at least leave 1 good trading or investing mark on a new comer or continue to share our knowledge it's a good thing because way back in the day someone help mentor us. BREXIT was just to expose the crisis in Europe and get Britain back on its own two feet instead of the EU continue to trampling on it. Here is where it gets interesting from October '16 to October '17 call me crazy or not knowledgeable it's all good but they are 3 major elections(USA november, FRANCE april/may and GERMANY august/october) coming up and we are going to see higher highs and the BEARS are going to be toasted. I can't wait to see what the gurus are going to be touting.
Fear and greed rule this market and there is a powder keg of fear building under the surface. In my opinion the moves in low yield bonds, gold, defensive sectors, and high dividend equities are just manifestations of this fear. The smart money is rotating out to let the other guys hold the bag when this thing goes bust. I just hope these new ATH's don't suck in the money that has been on the sidelines since the last bust.
Investing and trading have the same goal but very different methodologies. This type of site probably has value to a trader, to an investor, not so much.
#ES_F $ES_F #SPY levels to watch 2151 // 2139.50 // 2128 #CL_F $CL_F #USO levels to watch 46.47 / / 44.78
