As I said last week and the week before, and several times before that, the Europeans would find a salve for their festering wound sooner rather than later. Well, I guess one’s view of time is a relative matter, but I think sooner has arrived. This week, perhaps today, an announcement about a grand plan seems imminent. Merkel and Sarkozy have been spending lots of quality time together, but still their political “relatives’ are working hard to break them up. No matter, as always, we will see. In the meantime, I have one reader’s statement and another’s question. Both are, well, fascinating and quite unexpected.
I cannot understand anything from your writing; it appears like a first grade student who is unsure what the right answer is. He will guess, so his answer like will be this way or that way. Please write firmly about whether you think the market will be bullish or bearish for next two months. This will give a better impression of TraderPlanet.
This is a first, well, since, first grade for me. No one has since then, at least until today, compared my writing to that of a first grader’s. Actually, now that I read it closely, the reader’s comment is not really about the competency of my writing (phew!); it is about my competency as an oracle, a soothsayer, a fortuneteller, an analyst, if you will. The reader wants me to state firmly what I think the market will do in two months, and he has a point. After all this is what analysts do, right? They firmly tell you what they think will happen to the market in the future.
I am not an analyst in this sense. True, my role is to analyze, but I don’t see my role as firmly divining the future, even for two months. No, my role here is to track data, analyze that data, and then to conclude likely outcomes based on that data. I deal with probability, not prediction. Sometimes, as the reader suggests, my conclusions are a guess, a fifty-fifty belief in a particular future, and so I write it that way. Sometimes, as in the case of Europe, the probability of arriving at a particular outcome is 80-20 or higher, so I write it that way. Here’s the kicker. Whether it is a technician, a fundamentalist, an economist, or Warren Buffet, it is always a guess.
Another role I have is to educate, and part of that is to motivate folks to get out and do what I do – track data, analyze that data, and then to conclude likely outcomes based on that data. The reason is simple – I don’t believe folks can on their own (without luck) make informed decisions about how to work their money unless they understand the big picture – the macro worldview right on down through the micro of a particular market. As to TraderPlanet, well, the site is doing just fine with or without my viewpoint because it offers a wide variety of excellent market analysis from an collection of folks with long market experience and much market wisdom.
Well, it appears I have run out of room today, so the fascinating question I said I would answer is coming tomorrow. In the meantime, I will leave you with has become my good news finish.
Italy’s technocrat cabinet approved the mix of tax rises, pension reforms, and incentives to boost growth, opening one of the most crucial weeks since the launch of the euro more than a decade ago. Markets reacted enthusiastically, with the yield on Italian two-year bonds plunging 85 basis points to 5.78 percent. This was far below the yields of over 7 percent last month.
Trade in the day – Invest in your life …
