And what a fine Monday morning it is … I know why I feel good today, but I am not sure why the market is so up. It is just one of those market days when it says, “I feel good.”
So, even if I don’t know what is going on, I do know that my trades are doing well, and, in the end, what else matters, as far as the market is concerned anyway. Maybe this is what makes me feel good this morning. Then again, maybe it was the productive weekend I had that is making me energetic, like I want to get up and go this morning.
- Fannie Mae said on Friday it would soon send the U.S. Treasury a dividend of $7.2 billion that will make taxpayers whole for the 2008 bailout of the mortgage-financing giant and its sibling company Freddie Mac.
The above news contributes to my feeling good. I just love it when the doomsayers take a nosedive on a prediction. The Fannie and Freddie prediction is a big one. Supposedly, the bailout and the combined massive debt was a live grenade buried in the sand, a time bomb just waiting to blow a hole in the US financial system, government debt, and the US economy via the housing market.
Yup … The above news about the mortgage giants also makes me feel good because it speaks to the US getting its debt issues under control. I read today that the US Army is downsizing to a level not seen since before WWII. Reducing the size of our massive military is a good thing for the US debt issues.
- A small Nebraska state commission that has never considered a major oil pipeline route could soon play a pivotal role in deciding the fate of the Keystone XL pipeline, a project brimming with political risk for both the U.S. and Canadian governments.
I am not sure what the above means for the overall market, but I know it means something to both Canada and the US. To Canada, having the pipeline stopped could mean an economic hit, as it would then have to move the oil over large tracts of land to get it to a port for shipping.
As to US, having the pipeline stopped could mean jobs, lots of them, which is an economic hit as well. I have no position on the pipeline other than if it does pass muster and gets approved, it should to do two things. First, it should be safe, and I mean really safe because it will pass over the largest fresh-water aquifer in the US, so a spill could mean serious disaster. Second, it should bring down excessively high fuel prices in the US. If the pipeline does both of these two things, that small state commission will probably say “yes” to the deal. The question then becomes, which companies will benefit if it passes?
- Mean reversion strategies assume that, when a stock or index gets too far away from its mean, it will eventually move back to its normal trend. This is where overbought/oversold are often used. For example, if a stock is moving up nicely and then it starts to “go parabolic,” it might be a good idea to take some profits and wait for the stock to pull back a bit.
Given the unreliability of the market these days, it is probably a good idea to pay attention to the above advice. I know I took some profit today. Here is a bit more good advice.
- It is probably a good idea to put less emphasis on the key levels that everyone is watching. Don’t base your entire trade on a support zone giving way.
If you are watching the chart, so is everyone else, and in today’s world of high-frequency algorithmic trading, you’d better be one-step ahead of all that speed, if you want to make money.
Anyway, I still feel good, even if I wandered a bit today. Some days are just like that. My brain just wanders, and, no wonder, as there is always so much to think about.
Trade in the day; Invest in your life …
