SPX, IWM, QQQ, XRT We will get seriously beared up in the event of followthrough here Via http://www.mercenarytrader.com/2012/10/live-by-the-bellwether-die-by-the-bellwether/
Luxury retail should have a hard time holding up as the global economy weakens. Emerging market expansion shouldn't offer much in terms of revenue growth, and consumers in developed markets are becoming less likely to make frivolous purchases. TIF is currently priced for growth (a PE of nearly 18) and analysts have been lowering estimates...
Not a good day for Core Labs (CLB) as the company issues a Q3 profit warning. As the North American rig count drops, the outlook for oil service companies operating in the US and Canada weakens. OIH (the oil service ETF) looks vulnerable after a failed breakout. Of course a hard landing for China and more uncertainty in Europe doesn't very well support the bullish case for energy producers or the ancillary servicing companies.
Nice, clean charts. But the FED will let the dollar slip on a down stock day like today acting as support for stocks. I see no way technicals can win the FED. Those manipulators will do anything they want. Since they announced QE3 and soon QE4 I gave up on charts. Just buy, anything they buy...
Trading is a game not just of methodological rules, but one of wisdom, experience and judgment. We don't place faith in pure chart patterns, only in our ability to discern attractive reward to risk setups in proper situational context. The idea that the Fed is omnipotent, unbeatable etc is a myth, and repeated stimulus efforts are subject to the law of diminishing returns. To a significant degree, "don't fight the Fed" is already priced in. The patterns cited above are especially telling given Monday's poor showing in the face of strongly bullish economic data (ISM). This doesn't mean going bearish here is a lock, only that risk:reward makes it an attractive situation on proper follow-through. In this too trading is a game of repeated trials. If someone offers you $100 coin flips while unknowingly giving you a 55% / 45% edge, you take those flips all day. It doesn't mean you win every time or anywhere close to it, but over time the law of large numbers delivers profits. With all that said, if markets have flummoxed you to the point of having no clear money-making strategy or logical processes for moving forward, you should not close your eyes and blindly trust the Fed (who is likely to fail you at the worst time). Instead you should stop trading until you've found your way back to a confident and rational place (in this trader's humble opinion).
It's a game of confident, I'm sure. It's the faith of believing that the system will not fail and austerity/easing will finally do the trick. That's what kept the market going even though without much support from economic data. But it's a double edge sword, the higher hope you have means the more despair you'll be once your wish did not come to fruition. Nobody really know when that turning point might be, it will probably come when it's least expected or with signs that most ignore. Market like the Fed dreaded such reset so every stop will be pulled to prevent that from happening. The reset could come in two flavor, extreme inflation or deflation. The Fed is pushing it's luck with inflation, and is pot committed in a game that they cannot win due to growth constraints beyond monetary policy such as geo-political situation, education, demographic, resources limitation etc...
Heh. Dude, markets have been tradable for going on hundreds of years now. There were speculators who made fortunes in virtually every major crisis of note for the past couple centuries. How much more faith (read: evidence of sustainable trend) do you need? As for austerity/easing, doesn't matter if it "does the trick" or not... succeed or fail, there will be trades...
I'm speaking from a point of investing not trading. Anybody could make money as long as everything does not goes to zero. I'm not denying that. I'm just saying that there factors that could put a cap on growth.
Well yes, in that case... long-only type investors bear a significant chance of being screwed. But this isn't an investing message board...
The long run chart of charts. I'm going with 2015, +- 1 year, S&P500 @ 800 level. Dump bonds, dump gold... I can't see how the "kick the can" is still the game of the day.