Making money in the stock market is not easy. My guess is anyone who actually has been making money consistently over time will agree with me, but you never know. Anyway, consistently successful traders/investors will tell you success means work. Nevertheless, if one is working, over time, aspects of the work start to get easier. One of those for me is timing.
When I say timing, I mean it in the broadest sense. I am not an intraday trader or a day trader, as both of those disciplines require the ability to “time” in a very tight frame. No, over the last eight years or so, I have taught myself to “see” the broad market, to assess its broad movement. A big part of that is the work I do to understand the global economy, something readers of this column know well, as I always write about the specific and generalities of the global economy.
In any case, over time, the way I strategize has changed to reflect my broad perspective, and it is working. Most of the time, I hit the mark about where the market is going. For example, as I watched the market climb week after week recently, I suspected a pullback was in the offing. I waited for it, got it, and then waited some more for the market to turn back up, which it did today. My order was ready to go this morning, and as I write, the market is holding its gains and my trade is as well. True, the day still has a ways to go, and the end might be more like the opening than the upside now, but no matter, I feel as if I got in at a good price and I feel my “buy” will climb with the overall market this fall.
I am writing about me not because I think I am special; rather I write about me because I am my own frame of reference. I write about me quite objectively and I do it because I believe it is good advice for you. As well, what I am telling you is not original, nor is it a certain way to be successful in this game. It is just good advice.
Specifically, my advice is that you understand it takes time to learn the craft of trading, but it takes experience and awareness to learn the “art.” The art of trading derives from an intuitive understanding of the market. My intuition comes from understanding global economic movement, and I deem that important because I believe the market ultimately cares about one thing more than any other – corporate profit; and corporate profit depends on markets and economies moving forward. Despite the perception otherwise, the last three years have been solid in this regard. With the exceptions of Europe’s recession and China’s purposeful economic cooling, markets and economies have moved forward, especially the US economy. In this election cycle, if one did not know better, one could think the last three years have been economically horrible, and that, my friends, is simply not the case. In fact, the US economy is still moving forward.
Strong demand for civilian aircraft bolstered durable goods orders, which rose 4.2 percent after a 1.6 percent increase in June. Last month’s increase was the largest since December and beat economists’ expectations for a 2.4 percent rise. Orders excluding transportation fell 0.4 percent, dropping for a second month in a row. Overall orders last month were buoyed by a 14.1 percent jump in transportation equipment as demand for civilian aircraft surged 53.9 percent. The aircraft surge was complemented by a 12.8 percent increase in motor vehicle orders, the largest increase since July of last year. Unfilled orders for overall goods increased 0.8 percent, indicating factories will remain busy for a while.
Keep your eye on the big picture and the intuition will come, over time that is …
Trade in the day; Invest in your life …
