Either the market is not a believer or the market cares less about the U.S. economy and more about Europe, which slumped economically at the end of 2011. Then again, maybe it is neither. Perhaps, and this is just a guess, the market is now waiting for the earnings reports on the way. Again, just a guess, but is it possible the market wants to see if all this positive economic momentum actually translates into profit? In any case, the employment report that came out this morning did little to move the market toward the positive.
The economy added 200,000 jobs this month, the Labor Department reported Friday, closing out the year with 1.6 million jobs gained in 2011. Only 940,000 jobs were added the year before.
Yes, we still have a ways to go to regain the jobs lost in “The Great Recession,” but it is beyond my comprehension that some political folk are out there this morning suggesting that somehow the 2011 economic year was a bad one, that, as one said, the economy is “horrible.” Yes, it is hard to grasp that some simply refuse to acknowledge that the economy is getting better …
As any long-time reader knows, I am no fan of market prognosticators. Just because someone manages billions of dollars, has a degree in economics, or has spent years as a pundit, it does not mean they have a better ability to predict the future than anyone else who manages billions of dollars, has a degree in economics, or has spent years as a pundit. I have always intuitively understood this, but now I came across some proof …
But despite their experience and pedigrees, Wall Street gurus are wrong as often as they are right. CXO Advisory Group LLC, a research firm that tracks more than 60 market “gurus,” calculated the average forecaster is accurate only 48 percent of the time – roughly the same odds as a coin toss. “You might find them interesting for other reasons, but I wouldn’t put much stock in their predictions,” CXO Advisors chief executive Steve LeCompte said.
Something innate must make us believe someone can predict the future, especially in an environment as fluid and emotional as the market. The variables that affect the market are, well, the same variables that affect our everyday lives, which is to say everything that happens on the planet. So I say hallelujah! Let’s put to rest the notion what market oracles have to say is any more credible than what the oracles of ancient Greece had to say. Again, the best way to understand market movement (near-term only) is for you to do the work of understanding the big picture and then refining that down to the specific markets you want to trade.
I am going to start trading forex and options so I have a lot of questions but one is what broker would be best to use? I was planning on using MRC Markets after searching the Internet but don’t want to start by choosing less than the best broker. Also where would you recommend I get started on learning the ropes? I purchased VantagePoint trading software to guide my decisions.
Something to consider … Before I risked a single dime trading, I spent more than a year doing nothing but studying the market. I read what I could, I listened to everyone, and I talked at length with my mentor. I’d be less concerned with a broker at this point and more concerned with understanding the market and finding a mentor. VantagePoint is excellent software, but you need to know what you are doing. Take some time, learn, and then use VantagePoint to test what you think you know. Play trade with it for a bit. Do this and your chance of succeeding is greater.
Trade in the day – Invest in your life …
