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I just finished reading a premium post over on ZeroHedge (which seems to toggle from bullish to bearish on a daily basis in recent weeks) which made a big stink about how this was a great time to buy stocks, because they have found support at the 200-week moving average. Well, it’s true, ever since the printing presses went white-hot following the financial crisis, the 200-WMA has indeed been an important bounce zone.
When I was driving home from the airport last night, I passed a large billboard for a mortgage broker which has an electronic sign showing their best interest rate. I had grown accustomed to seeing it at levels such as 2.3%, so even though I follow the markets on a daily basis, I was still shocked to see the rate approaching 7%. You can see on this chart how rapidly the 15-year rate has increased:
Before you take my head off, I am well aware that for any trading strategy, they say having a bias is a profit killer. But what I’m referring to is how I develop a directional bias for each trade. The reason I need a directional bias is because at the end of the day, trading is inherently biased. Every time you buy, you are bullishly biased. You expect your purchase to appreciate in value. Vice versa for shorting. The big question that would affect your disposition is fundamentals and timeframe.
As with all my posts, I am going to speak from my own perspective and how I take this into account in my own trade plan. Some of you may disagree wholeheartedly, and that is fine. But I hope you learn something that helps you in development of your own trading plan.
(more…)The insane ping-pong of this market continues on, and it’s getting really tiresome. The reason for this morning’s strength? Liz Truss this. British Gilt that. Apparently the Charles Dickens economy has taken complete hold of all global markets, and the making-it-up-as-we-go-along government in the UK keeps toggling whether markets are roaring higher or plunging lower.
Because of all this recent volatility, it really screws up intraday charts. If you look at this minute bar chart, the insane action on Friday makes this morning look like a pancake.
