Oh boy, it’s Friday! Hmmm … OBIF … Could that acronym catch on? Oh, sorry about that. I am a little giddy this morning. Not sure why, but I think it’s because I slept well. In any case, the market is not the reason for the giddiness. It is showing little enthusiasm for the recent spate of solid economic data, including today’s jobs report, which showed a sizeable jump in folks working. In fact, it showed more working-age Americans with a job is higher than it has been since 2009, right after the financial crash of 2008
- An even broader gauge of labor market health, the percentage of working-age Americans with a job, reached its highest level since the summer of 2009.
Yet the market is flat, even a bit hesitant to push higher. In fact, it is moving into the red as I write. So, economic data, even a good jobs report, the Big Kahuna of reports, is not exciting the market. So what gives? As I always say, the market constantly seeks balance. This is what is happening today – rebalancing. Even though the economic data across the globe is improving or doing fine (yes, even China), the market wants to reassess, to get centered, to find its balance.
- Domestic demand drove a stronger-than-expected 0.6 percent rise in German industrial orders in February.
Then again, maybe folks are not trusting in this five-year bull run in the market. After all …
- Given that this bull market is now getting very long in the tooth, now might be an excellent time to make sure you’ve got a plan in place to try and avoid the beatings investors took in 2000-02 and 2008-09.
Maybe the above is true, as far as the first part of the thinking goes, but as far as the second part of the thinking, well, there is a problem. Both spans of time mark the exposure of failure, the beginning of two recessions, and the popping of two rather large bubbles.
In the 20002, the Internet/technology bubble burst, exposing the “irrational exuberance” that makes people greedy and a recession quickly followed. In 2008, the housing bubble burst, exposing the financial pus underneath. The nasty recession that followed actually began in 2007, but the full effects were not felt until early 2009. Keep this is mind when folks talk about another market breakdown relative to history, or at least recent history.
- China will close 1,725 small-scale mines with a total capacity of 117.48 million tonnes in 2014 as part of its program to phase out low-quality coal production, its energy administration said on Friday.
The above is interesting news because it shows China is serious about cleaning up some of the worst pollution in the world and it suggests that it will need to push even harder on alternative energy projects, which means Chinese solar companies will get a big push. Folks, keep looking in the alternative energy realm for good trades and solid investments. Think Chinese solar.
- When it comes to trading, there is a lot of “noise” out there. News clutters up a trader’s mind—both print and online, from Twitter and other social media, from a plethora of analysts and advisory services. However, most successful traders think and trade for themselves.
Is this not what I have been saying since cavemen first decided to, well, build a house instead of living in the dirt? It is excellent advice, and one cannot hear it enough if for no other reason than one needs to make the idea of thinking for yourself habitual. Here is another thought to instill into your very being as a trader or investor.
- Trade your set-ups, not other people’s opinions.
Finally, one more though, one that has less to do with your success and more to do with simply understanding that the market is about information and those who have it often use it to their advantage, no matter how much the authorities try to stop this most basic human flaw.
- The U.S. Justice Department is investigating high-speed trading for possible insider trading, Attorney General Eric Holder told lawmakers on Friday.
My point is – go after the boogers, but you, as a trader, need not worry about the reality that the market favors those with the information. There is too much out there for any one person, or any cabal, to manipulate the overall market for a long period of time. True, individual markets can be manipulated (think oil and silver) for a reasonable length time, but, the mass of the market can only be moved in short bursts by those who have the ability to do so. We just ride those ups and downs and then get back to business.
Trade in the day; Invest in your life …
