So, will the market make it five days in a row? Is there enough gas in the tank to drive up the hill one more day? I don’t know, Fridays can be tough in an uncertain market environment. And what would be the reason for the market to behave well again today? Nothing regarding debt in Europe or the U.S. changed from yesterday. The global economy is, well, still flat, at best. So what gives? If I were me, I would suspect a shift in sentiment soon enough, and if recent history is a guide, that shift will probably be strong …
Volatility in equity markets is burning smart-money players, and even experienced traders are finding it hard to keep up.
So, it isn’t just me truly guessing which way the market will go? It isn’t just me thinking this market is tough to work.
A recent survey of hedge fund managers found that bearish sentiment rocketed in August to its highest level in a year.
So, this is it. Bearish sentiment is strongly on the rise. If you are a bear, then place your bets ladies and gentlemen. If you are a bull with contrarian tendencies, then open your wallet because this is an opportunity.
At roughly 12.5, the P/E of the S&P 500 is attractive, especially relative to Treasuries, and has room to grow.
I am inclined to the latter camp, as you well know, especially if European leaders can cut the loose chatter and seriously focus on resolving the pervasive crisis of confidence. As to the U.S. debt situation, the other paddle waiting to churn the market, I am hoping for true and long-forgotten statesmanship to win the day there. We will know soon enough if I get my wish, but in the meantime, keep in mind, although Europe and the U.S. are the biggest dogs on the block, other little pups are running around trying to make their mark.
While the developed world is strapped with heavy debt and an interest-rate policy that has been slow to take hold, emerging markets don’t share the same burdens. These budding economies, with their emerging middle class, are increasingly spending on computers, restaurant meals, cars, construction equipment, and other big-ticket items. For investors, increased consumer spending spells opportunity.
The point is no matter how tough the market is you must stay involved. You can pull your money and stop trading, but if managing your money is what you do, you cannot just walk away until things “settle down.” No, what you should be doing is paying close attention, learning what you can about market behavior, and, ultimately, looking for opportunity. Remember, the smallest part of successfully working your money is the actual trade itself. Are you with me?
Trade in the day – Invest in your life …
