There are so many crosscurrents in the market right now between Oil and Europe QE, Currency Wars, the threat of rate hikes, insane volatility. My account is undergoing massive swings again this year already and after a huge influx of profit cushion, today just dipped below the proverbial line in the sand that allows me to daytrade. I am very confused and tired right now. I got sucked into primarily swing trading positions again thinking that the bears finally stood a chance at sinking their claws into the market and the fucking bulls just rip us exactly where they needed to step in. Is the whole thing manipulated by Central Bankers? Yes. But am I going to take them on and fight them? Fuck no I can't do that. But I also can't bring myself to go long what is obviously a house of cards that could entirely collapse at any minute. Im stressed out right now, trying to separate what is important from what is white noise, a task that proves much more difficult than you would ever anticipate. Predicting the future is a tough business. It's scary knowing that I am right on the knife edge right now and any day could swing me towards ruin or vast fortune. This fucking market is chopping me up...
Today Mario Draghi announced a $1T QE bond buying program for the Eurozone. As far as i can tell this means Lower Euro, Higher Dollar, Lower Oil. This whole era in markets and central planning is really rather extraordinary. There are these currency wars going on with central bankers around the world and every nation is in a tizzy to debase their currencies and destroy the purchasing power of their citizens savings in the name of increased exports. Of course the real reason for this ideology is not because inflation is a good thing for everyone. It is however good for debtors who love inflation because as the value of the currency falls so does the extent of their debts. Many nations around the world have increased the role of their governments beyond that which they are financially capable of supporting. Basically entire nations are taking on debt to support themselves.
A person would never be able to get away with this, but because they are governments with central banks, they have the power to create money out of thin air. Under normal circumstances such massive printing of currency would cause rampant inflation as each additional dollar printed erodes purchasing power. However, right now everybody is doing it and lowering their interest rates and printing money and trying to debase their currencies by inflating their money.
These are interesting times right now in America. We just got done with three QE programs and have printed more money than anyone and right now the value of our dollar is increasing enormously! The price of Gold is also increasing as the value of just about every other commodity is in free fall. You have to realize that it's all relative. You also have to realize that these fiat currencies are all imaginary, mostly digital digits these days. The things that can be purchased with them are not but keeping in mind that money is imaginary helps put into perspective the lunacy of the market and price discovery.
The dollar is increasing in value and our assets are also increasing in value. Things are getting cheaper for us. This deflation is exactly what we want as savers. The issue of the debt is a real one but nobody seems to care about the debt. I don't think it was ever intended to be paid off.
I am fairly certain that because some sort of Eurozone QE is confirmed for March that means that the USDollar continues higher against the Euro, that and an increase of supply will continue to put negative pressure on oil prices. I suspect that oil producing areas of America will be forced to cut exploration and may soon be completely priced out of the market and be forced to cease operations and lay off employees. The shockwaves of that should eventually start showing up in the data. Of course the market may continue to ignore any negative economic data and continue higher with an increasing global money supply from Europe.
It is fun to speculate but when you break it down the entire monetary fiat currency system is all imaginary, the market is absurd and impossible to predict. This is what I make of the current situation. I am positioned for a drop in oil prices, a rally in gold miners, an increase of volatility, and falling equities prices. Stay tuned!
I made a brilliant short trade on them last year. I was happy to take a profit but it looks as if the smarter move would've been letting that winning trade ride. Trends: Once established become powerful.
There has been rampant maniacal speculative excess going on in China recently as their market broke out of a long term falling wedge and went parabolic. The Chinese people have been showing up to the party in droves opening up a record level of new margin trading accounts in a very short period of time.
Just today however, the market received a small dose of reality as Chinese stocks plunge the most in six years after regulators begin cracking down on margin lending.
'The Shanghai Composite Index sank 7.7 percent to 3,116.35 at the close, its steepest drop since June 2008.Citic Securities Co. (600030) and Haitong Securities Co., the nation’s two biggest listed securities firms, fell by the 10 percent daily limit after they were suspended from loaning money to new equity-trading clients and regulators said brokerages shouldn’t lend to investors with assets below 500,000 yuan. ' -Bloomberg
Underneath the mania of the stock market China is weakening. China has been seen as the beacon of global growth for a while now as the Chinese go nuts building new structures. Unfortunately their optimism of migrating the people from the farms to the cities isn't coming to fruition quite like they had hoped. In fact the Chinese have now ended up with the precarious situation of entire cities that are mostly vacant, Ghost Cities.
There is a massive supply glut of vacant property sitting in China right now and as a result, property values are beginning to decline putting Chinese real estate companies at default risk. 'Concern is mounting that increasing financial stress among builders could spill over into a broader credit crisis in China. New-home prices fell in 65 of the 70 cities monitored in December and were unchanged in four, the National Bureau of Statistics said in a statement yesterday.'
China is a net oil importer and I suspect that is partly why their markets have been doing well but it is wise to use caution as it appears as if China is in their own fragile bubble. The Chinese stock market has been gripped in a mania of speculative fury and the citizens all want in on a piece of the action. I certainly cannot predict the future but from what I have gathered historically we see this kind of psychology much closer to significant market tops than bottoms. China has a lot more vacant property now but it looks as if the only thing they have manged to build is a House of Cards.
The Swiss Central Bank out of the blue removed the Euro Cap to the Swiss Franc and the Swiss Franc Exploded 18.22%. For Forex, something that barely moves 1% on a very volatile day a move like this is extreme. Forex is insane in that you can use something like 100x leverage on your money. I guarantee you that many forex traders blew up on this rocketship, as well as many making fortunes.
The market is breaking down. The SPY is getting weak and I am playing for the already weak Emerging Markets EEM to roll over and break down further from the bear flag.
Oil remains extremely weak.
GPRO is getting massacred.
I hit my target price in KING and covered the short position for a nice win.
There is fear in the markets as the VIX is elevated.
The Market is acting like it is topping out. Be careful.
Before approaching any venture it is imperative to have a well-thought plan. Making the plan is the easy part. The second you put money on the line you will be bombarded with a dizzying array of information that is designed for one purpose: Shaking you out of your position and stealing your money.
We're humans, we reason, we think, we are creative beings that come to various conclusions about the same thing. That's the market, a competitive public voting mechanism where the victor gains the spoils.
What I'm saying is that in order to succeed it is easy to know what to do. The difficulty comes in having the discipline to follow your own rules.
Here is an example of when incorporting information irrelevant to my Plan and Altering my Strategy lost me money.
The past two days I have been watching oil. Oil has been crashing and suddenly the setup for a quick pop to the upside started to look attractive. I began purchasing shares of UWTI the levered long oil etf. This morning I had bought various oil stocks as well just feeling that oil was ripe to pop. Suddenly I get news that an oil inventory report was being released. I had not even known about this report before I had acquired my positions which was probably a lack of sufficiently planning the trade, but that's the market you never know what's coming and in my strategy a macro report did not matter, only the technical setup. Anyways, I learned of the report and put in tight stops suddenly worried that this report could drastically affect the movement of oil. The report came out and showed a big excess of oil supply and was bearish. I immediately reacted and closed out all my oil longs. I then rashly thinking that if it is wrong to be long, then it must be right to be short shorted oil via the SCO ultrashort crude etf. The move initially proved wise as oil did drop a bit. I was up a good amount on the etf but was thinking in a swing trade timeframe when I should have been thinking in a DayTrade scalping timeframe. The position fell back to break even then rallied once more. By this time it was midday chop and deactivated my stops worrying that they would be ran in the chop. Well randomly midday, actually after the pit close which was odd oil started ripping to the upside in the move I had originally anticipated this morning. I had deactivated my stops and so wanted to wait for oil to come in more, well it kept ripping and draining me. I ended up covering half on the flag and am holding half thinking that was just a quick pop. I was only going to play it for that pop and get out, but sure enough I got shaken out on information irrelevant to my plan, lost discipline, didn't lock in gains, was thinking in the wrong time frame.
It is important to know what to do. It is imperative to block out the white noise and follow your plan.
Watching Intraday charts day after day; Certain patterns emerge. The trading day is divided into separate blocks of time.
Pre-Market/After Hours : This is the Grey Zone: Very Little Liquidity, Massive Position Altering Moves often occur in the grey hours.
Initial Move: Stocks usually get a big thrust first thing in the morning as Buy/Sell orders flood the tape
Secondary Move: Often times there is some sort of reversal as Overnight Speculators take profit on Winning Positions
Mid-Day Chop: Alot of the liquidity from the morning tends to dry up in the middle of the day. Alot of traders take the middle of the day off and eat lunch. Stocks like to chop around in the middle of the day and also run stops. Trading during this time period tends to be slow, and prone to whipsaws.
Power Hour: Trading begins to pick up again as the end of the day nears and people begin re-positioning. Oftentimes but not always the direction that it closes into will presage a gap in that direction the next morning.
Final Minutes: Just like procrastination in life: Many people wait until the bell is about to ring to alter positions.
Knowing where you are in the trading day can help you make better trading decisions.
I'm at the mercy of the market. Trapped in turbulent seas. GPRO is my vessel and I am hoping that it gets destroyed. It's times like these that there really is no other option but to reflect upon what sequence of events transpired to get hitched to such a ludicrous situation.
This all goes back to every mans inherent desire to have control of his destiny. The belief that through intellect you can gaze into the crystal ball and accurately anticipate that which is unknown. That unfounded belief is the heart and soul that drives the market, the delusion that binds everything together.
Even though it is well understood that the future is unknowable; Driven by inquisitive minds nothing will stop people from speculating. Sometimes you are right and it turns out like you anticipated. All available information is there for you to absorb and disseminate however you envision. Was it luck or did you strike a fountain of brilliance? I'de like to believe that you can anticipate what will happen, you can make your own destiny. I'de like to believe that you can consistently pull money out of the market after you have properly evolved your strategy. I don't want to have to rely on luck and fate to live a predetermined life.
Unfortunately, the desire to have some semblance of a clairvoyant does not change the hard fact that the future is unknowable...
Here I sit, waiting for my vessel to sink deep into the dark so that I might once again float to the surface and climb to the top with a more disciplined approach.
It's up to fate. The irony.
R. J. Sullivan IV