My most successful friends are day traders.
When the market is terrible (like now), their fortunes shine compared to morons like me, who actually think they can pick stocks.
Their key is to buy dips and sell “highs” and get out before the end of the day.
Never, ever stay in a stock overnight. That’s when all the bad news happens.
Look at these charts. They’re yesterday. There are lows and there are “highs.” You’re looking to make maybe 15 to 20 cents on a trade — and be completely out by the end of the day.
Clearly you ought to know your stock. It ought to be big, have good management, have a relatively stable business, and not be prone to surprises, e.g. Valeant.
Pick three big stocks. Study their movements for a few days. Then see if you can pick a low and pick a high.
You can play this game also with the S&P 500 also. Here’s yesterday:
There is much talk of a rate hike in December.
Rate hikes are traditionally not good for stock prices. I know little about Casey Daily Dispatch (which somehow I get). But this morning was pretty good. Here’s an excerpt (my bolding)
Why Higher Rates Could Kill the Bull Market in Stocks
Markets are nervous about the Fed’s plans.
The Bureau of Labor Statistics released its October jobs report on Friday. It was the strongest monthly jobs report this year.
The U.S. economy added 271,000 jobs in October. That’s far more than the 180,000 new jobs economists were expecting. It was also the largest one-month jump since last December.
On top of that, the unemployment rate fell to 5% last month. It hasn’t been this low since April 2008. Plus, wages grew by 2.5%. That’s their fastest growth rate since 2009.
Despite the good news, stocks fell slightly on Friday.
And on Monday, the S&P 500 lost 1%…its worst day in six weeks.
The market’s bad reaction to good economic news is a sign that investors are worried about the Fed.
Regular Casey readers know the Federal Reserve has held its benchmark interest rate at effectively zero since 2008. Rock bottom interest rates have made it extremely cheap to borrow money. Americans have followed the Fed’s lead by borrowing trillions to buy houses, cars, stocks, and commercial real estate.
In addition to holding interest rates at effectively zero, the Fed has flooded the U.S. financial system with easy money for the last seven years. Through its quantitative easing (QE) programs, the Fed has pumped $3.5 trillion into the U.S. financial system. QE is “central banker speak” for money printing.
The one-two punch of low rates and money printing has fueled a historic rally in U.S. stocks…
The current bull market in U.S. stocks started in March 2009. At 80 months and counting, it’s now 30 months longer than the average bull market since World War II.
The S&P 500 has gained 211% since this bull market started. But stocks haven’t risen much since the Fed stopped QE in October 2014. The S&P 500 has only gained 6% in the 13 months since then.
For now, the Fed’s key rate is still effectively zero.
But investors are worried that the Fed will see the strong jobs report as evidence that the economy is doing well. And if the Fed thinks the economy is doing well, it’s more likely to raise rates at its next meeting on December 15-16. It would be the first time in nine years that the Fed raised interest rates.
In a healthy economy, markets should go up on good news and down on bad news. But markets aren’t healthy today. They’re addicted to easy money. In this “Alice in Wonderland” economy, good news is bad news.
Jeff Gundlach thinks the U.S. economy can’t handle higher rates…
Gundlach is one of the world’s top bond experts. He runs Doubleline Capital, an investment management firm that manages $81 billion. This year, Gundlach’s bond fund has outperformed 94% of similar funds.
In an interview with Reuters last month, Gundlach said the U.S. economy looks a lot like it did 2007. which was just before the financial crisis started. He told Reuters that raising rates would be a mistake.
If the Fed raises rates against this backdrop, it just makes things worse.
Gundlach reiterated his stance last week at a conference, where he said “the Fed should not raise rates in December.”
Like us, Gundlach thinks the U.S. economy is very fragile. He’s worried about declining profits for U.S. firms. He also sees weakness in the stock market, as Yahoo! Finance reported on Thursday:
Interestingly, Gundlach said that perhaps the single most important indicator for the Fed may be the S&P 500, which plunged in August and September, prompting the Fed to refrain from moving on rates. Now that the index has recovered, it “appears vulnerable to another pushback down because earnings are not there,” he said. “The S&P 500’s trailing 12-month P/E is 19; that’s not cheap.”
Things I learned about health recently:
+ Mixing drugs is bad. A friend took a beta-blocker on top of her blood pressure reducer. She collapsed, hit her head on concrete and ended in hospital for the weekend.
+ Cataract surgery has unforeseen consequences. It wrecked my right eye’s eyesight which is only now improving with four-times a day drops.
+ You don’t need rotator cuff surgery.You need rest, movement and benign neglect (also called BN). Unless you really wrecked it, the body will repair itself by scarring over. Mine did.
+ You’ll get old if you stop exercising and keep eating excessively. Only eat half what they put on your plate. Take the other half home for tomorrow.
+ Don’t do stupid. Like lifting heavy stuff. Do not garden.
+ Check your skin every six months. You were stupid when you were young and stayed in the sun too long. now you have incipient melanoma.
Travel stuff
+ Priceline is the cheapest way to rent a car. Bid low. Raise your bid a bit. Keep raising it. Until you you get the cheapest.
+ Do not rent cars through your friendly car company. Beware of being a Gold Number 1 member, or whatever they call them. They’re an excuse to overcharge you.
+ Booking.com allegedly has more houses and apartments to rent than AirBnB. Priceline owns Booking.com.
+ Check Expedia, Kayak and others for airline prices, then buy directly from your chosen airline.
Email stuff:
+ Emails are good for confirming appointments or arrangements.
+ Emails are excellent for showering compliments.
+ Emails only work with one item. Nobody reads the second item, unless it’s a compliment.
+ If you want a reply to your email, put a question on the bottom: Is that OK? Please confirm. etc.
+ Text messages work better because people actually see the message instantly on their locked smartphone. In contrast, emails only “bing” a phone. Your recipient doesn’t see the email or its content on their opening screen. To see an email, you have to unlock your phone, go to “Mail,” then inbox, etc. It’s a pain reading emails on a cellphone.
+ Phone calls work even better. Face-to-face meetings work the best.
Do not see this movie: It’s stupid. You’ve seen it a thousand times before. Worse, you can’t make out the words for the mumbling.
See this movie instead. It’s great.
Two great actors: Tom Hanks and Mark Rylance.
Good goal:
Harry Newton who’s better this morning, marginally. This cold/bronchitis stuff sure hangs around.
I work with groups of high school kids. The high achievers who aspire to excellent schools and carry 4.0+ grade averages. Email is dead to them. I put four students together in a workgroup. Two said they never check their email. A third put her email address into my phone with an error.
Additionally, Facebook is pretty much over for them. They will check Instagram and sometimes use SnapChat. They weren’t aware that YouTube had chatting and “Channels”. For them, YouTube is just a video server.
They text. Of course, they still Google like crazy. Don’t short Google, but don’t be REALLY LONG on Facebook. Microsoft Windows is dead… it just hasn’t fallen over yet.
Don’t try to reach the current younger set with (shudder) email blasts. It’s a waste of time and effort.
I have had to change my way of working. No choice.
I like Booking.com…use them often also VRBO.com…both often have best deals in Europe and USA with lots to chose from. Very easy to work with. Avoid Gites de France unless you are very conversant in French…they say they speak English then put all documentation in French.
Harry – suggest a different approach re: emailing with question at the end. BLOT. bottom line on top. start your email with the question, then fill in the details below.
Agree on Spectre. The franchise is dead.