The interesting thing about today’s market is the DJIA and the Russell 2000 are the only indices running in the red. The SPX is virtually flat and the NASDAQ is in the green. Sellers are selling the high and low end of the market. And this after the ADP report came out suggesting continued improvement in the US labor market.
- U.S. private employers added 238,000 jobs in December, more than expected and the best read in 13 months, a report by ADP showed on Wednesday. Economists surveyed by Reuters had forecast the ADP National Employment Report would show a gain of 200,000 jobs.
As well, adding to the interest, the economic data out of Germany suggests the global economy is continuing to move forward.
- Global equities and the dollar rose on Wednesday, as solid German economic data pointed to a pick-up in world trade and kept European shares near five-and-a-half year highs.
My take on the above contradictory reality is the market is still trying to rebalance, still trying to figure out where to put the money. Will it be large cap behemoths or up and coming small fries? As the dust settles, it might prove to be both in 2014. In 2103, clearly money flowed to both.
- The WSJ‘s quarterly ranking of the best 12-month performers among diversified U.S.-stock funds has been topped by Lord Abbett Micro Cap Growth (LMIYX), which, as the name suggests, focuses on very small, very promising companies, and generated a 12-month return of 78.6%.
Jumping back to the global picture …
The funny thing about China is the breathless media forgot to tell the businesses there about the “stack of disappointing” economic data coming out. In fact, it appears that Chinese businesses and the government there are not paying attention to the news at all. If they were, businesses would be pulling in the reins and the government would be shooting up the horses. Neither is happening right now.
- Shares in Nintendo Co Ltd jumped as much as 7.5 percent to a two and a half-year high on Wednesday after China temporarily lifted a 14-year-old ban on selling video game consoles. The move could pave the way for Nintendo, Sony Corp and Microsoft Corp to enter the world’s third-largest video game market in terms of revenue.
- E-commerce giant Alibaba Group Holding Ltd said on Wednesday it would set up a mobile gaming platform in China, venturing into a fast growing sector dominated by tech rival Tencent Holdings Ltd. Mobile gaming is hugely popular in China, home to the largest number of smartphone users in the world.
The above is important for two reasons. First, as I stated, China is doing just fine economically, which means opportunity for market players. Second, both items above allude to an increasing market for the companies that supply the hardware for gaming consoles and for the smartphone market verticals. I mentioned AMD as one company that might provide some opportunity in the near and long-term. I am looking forward to earnings for AMD.
Again, I have to get back to my trades, as none of those are in the DJIA, so they are popping, which is keeping me busy. Let me leave you with some more advice I came across this morning. I know, I know, there is more than enough advice out there, but if you are beginning or have not found your sea legs yet in the market, then you really can’t get enough good advice.
- The best traders focus on doing one thing well. The best traders identify a trade, or possibly two trades, that work, that jives with their personality, and they execute over and over and over. They specialize in doing one thing very well, and they completely ignore everything else and they resist the temptation change.
- Successful traders specialize in being great at one thing. Unsuccessful traders constantly jump from one strategy to the next.
Define your strategy carefully for the current market, whatever that is, and stick to it. If it stops working for the market, define another for the new market.
Trade in the day; Invest in your life …
