We all heard the "great" news and "cause" for the rally on Friday...the European settlement...and the US GDP was "up." Now a few facts... 1.) The Europeans deal was for 1 trillion Euros...they needed over 2 trillion Euros to cover bank capital and sovereign debt - FAIL! 2.) GDP was up...oh?!?! was it? Take a look at the technical note...the "assumptions" included estimates for September...estimates that included the price of homes going...UP in September as compared to August! Let us see....the "home selling months" are the summer months where kids are out of school...they returned in August and EARLY September...September is not one of the "selling" months. The reports out show that September home prices were...are you ready for this....LOWER....the government estimation of "good news" in September is wrong....estimations of GDP growth of 2.5% - FAIL. Now I can hear the morons saying contradictary statements...but, don't believe me...here is the "Technical Notes" for the GDP numbers... http://www.bea.gov/newsreleases/national/gdp/2011/pdf/tech3q11_adv.pdf -gastropod
Trading fundamentals never worked for me as the market likes to screw the vast majority of people at any given time. Best thing to do is trade price. However, it's very hard to trade price and ignore fundamentals, sadly this is what must be done. FoN
I don't think GDP was the reason for the rally. The reason for the rally was that everyone's short and got their blx squeezed.
The great news was that at least for today we don't have economic collapse. As long as earnings are ok, and we don't have catastrophe the market will float up from inflation if nothing else. What amazes me is the short time horizon of traders. Faster than Merkel can say Euro bailout the market goes up 1%
Thank you. Reuters headline: "Slot Machine Lands on All Cherries after Trichet Pledges ECB is Prepared to Do 'All It Can' to Ease Crisis"