So, there you have it. The S&P 500 touched upon a new record high this morning and the Dow is working to get into the green, just below its all-time high. And this as the Gaza fighting goes on, as the Ukraine fighting goes on, and as the Iraq fighting goes on. Weren’t those geopolitical struggles front-page news not too long ago and weren’t we told the market actually cared? Apparently, earnings and economic data are more important. Wow! Imagine that.
- The Architecture Billings Index (ABI) is signaling improving conditions for the overall design and construction industry. The American Institute of Architects (AIA) reported that the Architecture Billings Index rose to 53.5 in June, which is up from last month’s reading of 52.6 (April: 49.6
- Boeing (BA) reported Q2 core earnings per share of $2.42, which was above the FactSet consensus estimate of $2.00.Revenues for the quarter were reported at $22.05 billion, which was below the estimate of $22.30 billion. The company guided full year EPS to a range of $7.90-8.10 from last quarter’s range of $7.15-7.35 and the consensus estimate of $7.66
The above two pieces of data speak to an economy growing, and that is what the market likes to see.
- The SPX has been above its 200-day moving average for nearly 400 days. This sounds like a lot I know, but the all-time record is 525 days. So could this bull market stick around a lot longer than people think? I have no clue, but I wouldn’t bet against it either.
Ryan Detrick typed the words above in an article titled, 10 Things I’ve Learned About Trading Over The Past Decade. I found the above interesting, as I did the article, and it might be helpful to those of you who are just beginning this venture into trading and investing.
http://www.seeitmarket.com/10-trading-insights-ryan-detrick-13640/
Much of Detrick’s ten things are well known and often quoted, but he did have several that are not and those I will share with you.
- Ignore the news, only price pays. How many times can I say it, the price you buy something and sell something is all that matters. Everything else is just noise. So many times over the past five years I’ve heard every reason in the book prices should drop, but they haven’t. I don’t know if all the bad news is truly priced in, I do know ignoring the scary headlines and following price has made you more money than listening to the constant fear mongers.
I like the above because it is not common in this industry to knock the news it puts out. The financial “news” unto itself is an industry and many of the “big” market players are an integral part of it. Each uses the other to make money. I am referencing the talking head and celebrity analyst portion of the financial media. Folks often mistake what these folks have to say as news. As well, the real news is hyped and oversold to the point where it is laughable. Witness Gaza, Iraq, and Ukraine.
The next one goes with the above and it is another lesson I have been teaching – the guys with the credentials and big titles are not necessarily smart when it comes to the market. In fact, many of them are wrong so much I wonder why folks listen to them at all, much less trust them with their money. As well, I wonder why the financial media keeps putting them up on soapboxes to spout their special take on the whole ball of wax is melting. Witness Peter Schiff and Dr. Roubini.
- When you consider how many degrees and awards the team at Long-Term Capital Management had and they blew up, that makes it clear being the smartest guys in the room doesn’t equal making money.
Finally, the last one I will share with you is trite but true. Unfortunately, not enough beginners pay attention to this one and they end up paying a lot for little, or less.
- This isn’t an easy game, so don’t expect the results to bring with it tons of easy money, and don’t waste your time looking for a holy grail – there isn’t one.
No one ever has a guaranteed way to make money with trading or investing. Many ads will say this, and they will provide testimonials galore to sway you, but don’t fall for it. The market is an irrational animal and if there were a way to guarantee which way to go at any given time, there would be no market. Think about this. If someone had a sure-fire way to make money, then why are they selling it? Wouldn’t it be better to keep quiet and just make the money? In fact, one could make so much money over and over again until one busted the market?
Anyway, everyone but the Dow has joined the green party today. Maybe Apple and Microsoft are keeping it at bay. Their earnings did not come in as expected and folks are disappointed. No matter to me. I will take Boeing’s earnings and the Architecture Billings Index over both of those any day as a sign that the market is doing just fine, thank you.
Trade in the day; invest in your life …
