5-17-11; So far this year, we have seen so many market crisis’s, one after another and yet the market has overall continued to go higher. Here is a list of some of the things we have seen so far this year.
First there was the municipal bond panic, followed by euro dollar panic, the Greek debt panic, the U.S. dollar panic, quantitative easing (Fed printing) panic, the rising inflation panic, Oil-Gold-Silver- Commodity panic, Japanese earthquake nuclear disaster panic, the middle east uprising panic, the S&P debt rating panic and more. Even a few days ago, we had the markets sell off because it was believed that a train in England had been a target of a terror attack.
With each of these market panic’s, we saw the prices continue to rise and rise. The news is terrible, with housing in the dumps and unemployment showing no signs of getting better , but worse. Some are asking the question, why is the stock market going up.
Well, this goes to show you, that you can not trade from the news and expect the market to react the way you might think. Doing so, can get you in a lot of trouble. I think there are those buying for the sake of buying, with some outside chance that things will recover and maybe they are right, or not.
I do know the market sentiment has just become somewhat a non event. The bullish extremes have not effected the market from selling off either. Some would say the market is being manipulated and to some degree I do think that, but you don’t have to control the whole market to lead others along. Sometimes all it takes is little nudge here and there and that sparks the general audience to participate and they buy only because everyone else is buying and the saga continues.
It won’t last forever and one day, the market will adjust itself to reflect all the excess that has been built up into it over this last 7 months. I remember around last Thanksgiving, we could have easily seen a sell off, but instead we saw a continuation of the rally and it has not looked back much since then.
Currently, we may have another potential panic brewing with the “Debt Ceiling” being reached and the government up against a wall. I hear a lot of tough talk from the politicians but nothing significant is likely to change. I did think a month ago when we were at this same point, that something was going to happen, and it again may, but the odds are that they just spend, borrow and print more money. When will it end? Until it breaks and that may be the plan all along.
Power breads more power and that breads more control and so on. It has been going on for centuries and it is happening here in America. The constitution no longer means much and those defending it are demonized as some kind of nut. When will it end, when it breaks and those in power again come up with the solution and I will bet most won’t like it. If they tried to implement measures now, no one would ever easily go along with it, but only until there is a crisis and panic, will the resistance be overcome.
The people in power are not dumb, they are much smarter than many give them credit for. As it relates to the markets, they want it to go up, giving us all the allusion that everything is OK, until we all see one day that it is not, then the American people and investors get fleeced again.
That is way day trading is has increased in popularity. You have greater control over your risk capital as long as you know what and how to do it. For most traders trying to find there way, it is not a profitable venture. It does not have to be that way. By taking control of your destiny by becoming a profitable trader, you are in some way protesting to all the laws and regulations that they put us under every day. We become less free as the years go by, just look back 10-15 years ago and then to today. A very different world.
Just like in trading, not everything is as it appears in the real world. If we new the truth about so many of the very big things that has happened, say, the last 10 years, most Americans could not handle it and so choose to be lead into a dream state, for self preservation.
When you see what looks like a rally coming, soon turns into a market sell-off. Where did that come from, you might ask? It was there the whole time, but you did not see it. It is the same in real world events. We have to be independent thinkers and not be lead along to believe what is conventional wisdom. Again, the same in trading. If you go along with popular belief, you will be most likely wrong. The majority is usually wrong, the majority rarely gets it right, the majority will see it all to late and the damage is already done. So many parallels between these two.
I guess I am kind of on a rant here, talking a little off topic, but then again, maybe not. Back to trading where I will finish this up. Most traders will not see the moves coming in the market, when they do see it, the money has been made. They buy at the top and sell at the bottom. We should be buying as the market goes up and selling as it is going down. Don’t try and pick market Tops and Bottoms. There is money to be made in the middle along the way.
Keep your risks low, don’t get greedy, be patient, have a trading method and plan and be disciplined to follow it all. Good Trading to all, Vince !
Yesterday’s below;
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