Posts filed under “Trading”

The Bull Market Ends (or Is It Just a Correction?)

We awoke this morning to see futures deep in the red. Over the past two weeks, markets seem indecisive, unable to make much progress. Lots of days began with positive trades, only to roll over and fall into losses. Several days that began in the red closed negative, though usually off their worst levels. Last week’s big ugly Monday is still fresh in many traders’ minds.

Might this be the start of the long-awaited, overdue correction?

There certainly have been plenty of catalysts that could hasten a 10 percent drop or worse. Earnings season has begun rather inauspiciously. There have been several high profile disappointments — IBM, Best Buy, Intel and Citigroup come to mind.

On the other side of the world, China is slowing, with January manufacturing Purchasing Managers’ Index falling to a 6-month low and breaking 50 (49.6). New orders, exports, employment and backlogs all showed declines. On top of that, HSBC reports that China continues to face a cash shortage within its financial system (why does that sound so familiar?).

All this takes place against the backdrop of the U.S. Federal Reserve taper. The first step toward removing the bond-buying program was put into place last month, with the next step possibly coming as soon as the two-day Open Market Committee meeting next week. An unusually accommodative monetary policy is beginning to come to the natural end of its unnatural life. Indeed, the degree of stimulus has been so enormous that it might take three full years or even longer to fully unwind it. Congress has exhibited no interest in post-recession fiscal stimulus — unlike in prior recessions -– so perhaps the FOMC ‘s slow withdrawal is a mixed blessing.

 

Continues here

Category: Data Analysis, Investing, Technical Analysis, Trading

Crashes, Corrections & Sentiment

On Monday, we saw a sell-off of more than 1 percent across major U.S. markets. Europe and Asia followed suit the next day. Judging by my e-mails I received, this was it, the beginning of the end, and “you unrepentant bulls are finally going to get what you deserved.” Except not quite yet. Tuesday and…Read More

Category: Apprenticed Investor, Markets, Trading

Happy New Year: You Are A Useless Moron that Sucks

Over the holiday vacation, I try to kick back a bit, unwind, recharge the batteries. But I still scan my favorite media sources and blogs for interesting ideas. One that stood out was a short post from Greg Harmon of Dragonfly Capital. Titled “We Are All Useless Morons that Suck,” it actually made me laugh…Read More

Category: Investing, Psychology, Trading

Greg Harmon: We Are All Useless Morons that Suck

Let’s face it you suck at investing. Your adviser sucks at investing too. If you had picked the best stock to buy every day you could have turned $1000 into $264 billion by mid December. That is a 26.4 billion percent return. Did you even get a 1 billion percent return? How about 1 million…Read More

Category: Cognitive Foibles, Psychology, Think Tank, Trading

Take Responsibility for Your Stock Losses

I wrote this a decade ago, and if you keep only one resolution this year, this is the one it should be. It will open a cascade of improvements for your finances . . .     Take Responsibility for Your Stock Losses Barry Ritholtz RealMoney.com, April 12, 2005     “He who blames others…Read More

Category: Apprenticed Investor, Trading

Huprich: Wisdom Comes in the Smallest of Packages.

We previously published Art Hurpichs’ Market Truisms and Axioms back in 2011.  Art is a CMT with Day Hagan Asset Management, and he returns with an updated set of Stock Market Rules to Remember. Enjoy. ~~~ As you are reading this, we are in the process of moving our “youngest” to Virginia, as he prepares for…Read More

Category: Rules, Technical Analysis, Trading

Investment Fads and Themes, 1996-2013

Another year in the books and I’ve updated my Investing Fads and Themes by Year guide accordingly. It begins with 1996 because that was my first summer working on The Street and my earliest exposure to the market. I do this every December because I agree with the eminent philosopher Bob Marley when he reminds us “If you…Read More

Category: Humor, Investing, Psychology, Trading

S&P 500 Intra-year Declines vs. Calendar Year Returns

Click for larger chart Source: JPM Guide to the Markets (updated by me)   For today’s chart, I wanted to look at something unusual: the intra-year pullbacks of the past few decades. As this chart (via JPMorgan Chase & Co.) shows, there is an average market drawdown of 14.7 percent. That period includes a few…Read More

Category: Markets, Trading

A Closer Look at Hedge Fund Under-Performance

  “The $2.5 trillion hedge-fund industry, whose money managers are among the finance world’s highest paid, is headed for its worst annual performance relative to U.S. stocks since at least 2005. The funds returned 7.1 percent in 2013 through November, according to data compiled by Bloomberg. That’s 22 percentage points less than the 29.1 percent…Read More

Category: Hedge Funds, Trading

Guide to Stock Market Corrections

  The S&P 500 hit 1709 a few weeks back and has since been dropping precipitously, we are now down roughly 3.7% from that level in a short period of time. Heading into today, we’ve been negative 4 days straight and have seen losses during 9 of the last 11 days on both the S&P…Read More

Category: Cycles, Investing, Trading