Again man, you're going to need to speak english here please. There is nothing about this market that is not tradeable. I mean wtf. What do you want? Do you watch commodities? Moving limit every day. You trade oil? What about stocks? You see POT? WYNN? ISRG? AAPL? I mean seriously dude, what is it that you are looking for to trade? Shit is moving man. You want sell something? Sell bonds, sell natty gas, sell FXI. Come on man, you need to apply yourself. At least make an effort.
how long can the markets go up 1% a week
- Thread starter noob_trad3r
- Start date
Again man, you're going to need to speak english here please. There is nothing about this market that is not tradeable. I mean wtf. What do you want? Do you watch commodities? Moving limit every day. You trade oil? What about stocks? You see POT? WYNN? ISRG? AAPL? I mean seriously dude, what is it that you are looking for to trade? Shit is moving man. You want sell something? Sell bonds, sell natty gas, sell FXI. Come on man, you need to apply yourself. At least make an effort.
Quote from Shagi:
Maverick - I don't usually post 20 times a day - do the maths - and yeh I don't trade I'm a sim trader. Thank You For Your Time.
My post was referring to S2007.
The S&P was up 12% last year and 5% so far this year. It's basically flat over the last decade. In other words, it hasn't gone anywhere. A trader's goal should be to make money every day. Not beat the S&P 500. Your problem is your focus is too narrow. Look around you at all the opportunity out there. You watch cotton at all? You can trade the ETF if you don't trade futures, BAL. Or sugar, SGG, or DBA which is the ag complex. Come on man, like a typical American waiting for Obama to hand you a welfare check. Just try. Apply yourself. Don't be a lazy American fat ass. Do some homework. Get up earlier. Work!
2007 was quite different. The market wasn't trading 10% above its 200 DMA and it wasn't a straight, unholy grind with zero volatility. There were still real dips, instead of just an intraday 3-point fall that is immediately bought. I don't understand why the VIX isn't at 0. It could go up once stocks move out of the ridiculously narrow trending range they have been in but until then I don't see why being long volatility has any point. (talking about the S&P500 here, the other large cap indices are not as straight but they usually aren't as consistent as the S&P500 since there are fewer stocks and sector variety in them thus less stable)
Bullish sentiment is not only apparant in sentiment polls and the price action but it also shows in ETFs and particularly mutual funds that there are virtually no bears left in the market, short bets just being hedges for those who are net long otherwise. There are still a lot of bears in the general population, obviously, which appears to be an argument among the bulls that the market will grind higher (something about last bear out of the door...before the collapse) but if they are bearish now, they certainly will not have been bullish in 2009 and either they lost a lot of their net worth in 2008 or they don't have any to begin with. These bears on boards like ET, MarketWatch (this one's extreme by the way) and others are not the players who move the market in the slightest. The people who make bets are in record long territory.
The only way for this market to grind higher is new participants entering (unlikely) and continuous buying on margin without any selling pressure (which is why I think is happening) or a real boost in economy to drive company performance up (thus keeping valuations equally high and price higher) and increased 401k investment. Edit: free money from the FED also qualifies to move the market higher but not as much in Europe. Further I don't believe QE3 will happen from a fundamental understanding.
Looking at the market from the institutional's perspective, I can imagine these guys, as a group, are in a bit of a pickle right now because if I read the flow correctly, there is no way in hell they can get out with the paper profits without the market tanking. I've seen two straight legs down now on the European markets (which I trade) which looked a lot like institutional activity (very steady and controlled decline). Of course they both bounced back up, but the ride down was a lot more smooth and met with much less support than resistance on the way up (could be my permabear bias though) so most likely the traders taking over the longs there. Incidentally both recoveries (this and last week) did not start until the US exchanges opened up which adds to my view these were probably frenzied trader's rallies.
Bear in mind there are fewer bearish bets left in this market than at any point since 2000 and this has been this way for over a month (according to my mutual fund data anyway) and the the retail customer has been coming back to the market in March 2010 after being out of the game for all of 2009 (then quickly fled again in May) and came back again around December last year and is now as long as he was in 2007 (arguably they are having a better run now than last year). However, as the market starts to tank there will be no bears who are taking profits, if there is no QE3 then the market will tank right back to the September bottom and perhaps grind down further if there are other negative news flow or god forbid the FED actually shrinking its balance sheet (like it did in May 2010). I'm not picking a top right now personally, however as the market starts to tank you can be sure it will be a quick and messy ride, perhaps a bit like Feb 27 2007.
This is the part about reading the tape. Don't get me started on the fundamentals of it.
Hyperinflation is just one of scenarios that could hit the U.S. There is another possibility that may happen that is bad for the stock market before hyperinflation:
According to Keynes, fast growth in demand leads to bottlenecks that prevent supply from keeping up with demand. That leads to rising prices for goods and services. At some point an inflationary psychology sets in -- the price-wage spiral -- as higher prices cause workers to demand higher wages to keep up, which in turn produces higher prices.
If Hyperinflation happens in America, like 1920s Germany, the hyperinflationary trigger I believe will not come from within the nation. It will come from outside. Eventually, China, Japan, and/or some other nation, will see the endlessly increasing American deficit spending as a threat to the viability of the U.S. dollar. In response, they will reduce their purchases of treasury bills. This will bring America to her knees. It will not happen overnight, but it will happen.
In viewing our current economics before we see hyper inflation directly we may instead see stagflation. Stagflation is what happens when you have little economic growth (when government support finally runs out) but a good bit of inflation is occurring. It's an awful environment for stocks. In this case the financial markets will be worried that inflation is running so hot that the world's central banks will raise interest rates again and again and again to fight it. That wouldn't be good for either stock or bond prices.
The current cause of slow-growth concern is that the central banks will overshoot and raise interest rates so high in their battle with inflation that they'll either slow or stop economic growth. That certainly wouldn't be good for stocks and if growth slowed enough, rising bad debt could take a bite out of some sectors of the bond market. Concerns are that we could see a rerun of stagflation, that dreadful mix of slow-to-no growth and high inflation that I experienced for a good part of the 1970s that was such a bad time for investors, have been on the rise this year. In part this is caused by the central banks around the world raising their rates continually in the last few months.
According to Keynes, fast growth in demand leads to bottlenecks that prevent supply from keeping up with demand. That leads to rising prices for goods and services. At some point an inflationary psychology sets in -- the price-wage spiral -- as higher prices cause workers to demand higher wages to keep up, which in turn produces higher prices.
If Hyperinflation happens in America, like 1920s Germany, the hyperinflationary trigger I believe will not come from within the nation. It will come from outside. Eventually, China, Japan, and/or some other nation, will see the endlessly increasing American deficit spending as a threat to the viability of the U.S. dollar. In response, they will reduce their purchases of treasury bills. This will bring America to her knees. It will not happen overnight, but it will happen.
In viewing our current economics before we see hyper inflation directly we may instead see stagflation. Stagflation is what happens when you have little economic growth (when government support finally runs out) but a good bit of inflation is occurring. It's an awful environment for stocks. In this case the financial markets will be worried that inflation is running so hot that the world's central banks will raise interest rates again and again and again to fight it. That wouldn't be good for either stock or bond prices.
The current cause of slow-growth concern is that the central banks will overshoot and raise interest rates so high in their battle with inflation that they'll either slow or stop economic growth. That certainly wouldn't be good for stocks and if growth slowed enough, rising bad debt could take a bite out of some sectors of the bond market. Concerns are that we could see a rerun of stagflation, that dreadful mix of slow-to-no growth and high inflation that I experienced for a good part of the 1970s that was such a bad time for investors, have been on the rise this year. In part this is caused by the central banks around the world raising their rates continually in the last few months.
I was looking at a YM monthly chart a few moments ago. It took 5 years in a "bull market" to go from dow 7500-14000. Currently we have moved from Dow 6500-12250 in 2 years. I dont know how to trade this so as of this week im sidelined. Maybe its my inexperience or the fact that im young and trade with a small "chip" stack. But we haven't really put in any support levels in this move. So a sell off could really lead to a big correction. Another fear i have is the fed shocking the markets with a raise of rates. I heard how one trader on this board lost millions in seconds. I fear being in the market if the fed does that and im on the wrong side. I have seen this in stocks where it foes parabolic up and parabolic down but never in an index...