Trading in a government sponsored market bubble

The rally’s speed has left savvy investors in a quandary. While few are willing to bet against a rebound that has steam-rolled most forecasts, we are concerned the market has become detached from economic reality by expectations of unlimited support from the Federal Reserve and U.S. lawmakers. We are not fundamentalist in our rules of trading. But this market has …

READ MORE

Trading during a recession period

This pandemic is likely going to be the most disruptive financial and social event in decades. The financial wealth decline will have a major impact on consumer spending globally. The restrain on spending in future years to rebuild savings, especially since the crisis caught a lot of middle-income families at a time of high debts and low savings. We are …

READ MORE

The current stock market isn’t correctly pricing in the economic deterioration

The unprecedented actions by the Federal Reserve and other central banks are helping to keep investors numb for now. This is the first consumer and labor market down-cycle in 11 years. The consensus view still appears to be a quick recovery, but recessions tend to linger far longer. It took equities on average 18 months to record the final low …

READ MORE

Trading must go on, long or short

In order to feel confident that the stock market fundamentally has found a bottom, three criteria must be met: The viral spread in the United States must begin to slow, so that the ultimate economic impact of the virus and containment efforts can be understood. There must be evidence that extraordinary measures taken by the Federal Reserve and Congress to …

READ MORE

The purging has only just begun

The 2020 meltdown has already earned a spot amid those high-water marks. In fact, it’s already in a league of its own. Don’t bet on a V-shaped rebound once the stock market’s coronavirus-driven plunge finally hits bottom. Before the market can get on the road to recovery, the current bear market needs to run its course. The average S&P 500 …

READ MORE

Equity Market haven’t bottomed yet

We don’t think today’s rally of 1000 plus points in Dow is the turn around. Choppy markets and investors getting whipsawed is the way of trading for now. Professional day-traders are having a blast. Last month global Covid9 outbreak ended the market’s old “buy-the-dip” dynamic. Then on Monday, crude oil price war between Russia and Saudi tanked the markets and …

READ MORE

Markets Have to find a floor before buying starts

During every period of stock market losses, financial pundits tell you to buy as much stock as you can because everything is on sale. It’s too soon to know if the recent global market roller coaster is a blip, an overdue correction at the end of a historically long bull market, or the beginning of a full-blown global recession. It’s …

READ MORE

High valuations, and overdue market correction

This sell-off has more to do with overvaluation than the economic impact of coronavirus. There is a much wider set of anxieties around stock prices. The virus fears will have longer-term economic impact due to china’s slowdown. But for now, we are focused on taking advantage of a long position and exploiting and taking advantage of the herd running for …

READ MORE

We admit missing the January rally

So, ETF Trade Advisor and Eric missed the January rally. Our bad, and we admit it by taking full responsibility. Lessoned learn and it should not happen again. I must say that we miss-read the power of the recent rally by a long shot. These days the market vividly remind me of the 1999-2000 feeding frenzy. We all know what …

READ MORE

Looking forward to the year ahead

“Uncertainty” was the word that dominated the U.S. and global economic landscapes in 2019. The anxiety about a U.S.-China trade war and uncertainty about Brexit was the fear of 2019. Indeed, the pervasive unease roiled global financial markets, and eventually led to a wave of interest-rate cuts by central banks. The cuts had a calming effect on the chaos. Now, …

READ MORE