Tuesday, July 12, 2011
I always find myself laughing at how full of you-know-what the stock market is. I could give endless examples but I want to keep this specific posting relatively short.. I wish to demonstrate using a quick example, how verbal reasonings and rationales as to why a market moves one way or another in a trading day, is nothing more than empty words.
Yesterday July 11th, the Dow closed at 4pm at 12,505 It had fallen compared to Friday's numbers by about 100 pts. based on investors' concerns over Europe's debt crisis. That was the official rationale posted in all the media outlets.
OK.. now fast forward 17 hours later to the start of the Tuesday trading day. For the next few hours there's bumpy trading but eventually it spikes up about 60 points at 2:15p. What caused the spike? Did Europe suddenly get its debt crisis under control? Did the debt ceiling debate get settled? Some really good job numbers?
Nope. "Stocks got a lift after minutes from the Federal Reserve's June meeting hinted that the central bank could be open to more stimulus."- CNN Money
Cockroach Investors sensing the message is being sent by the Fed that QE3 is on way; free money for the little piglets to suck off the financial teat at expense of everyone else. No different from a panhandler or begger wanting a handout for doing nothing in return. Investors and traders are really no different than bums except dress nicer and hit on the government for cash instead of you directly.
Anyways.. So 15min later, stocks drop quickly and ultimately finished the day at 12,446.88 (-58.88). The reasoning? "Ireland's credit rating was cut to junk by Moody's Investors Services, serving as yet another reminder of Europe's ongoing debt troubles." (CNN Money)
In other words, investors knew the economic situation in Europe is bad... enough so to drop 100pts on Money, and yet not bad enough to prevent a spike at middaybased on rumor, and respond with pretend surprise at Ireland by running from the market by today's end.
Real investors put their money into opportunities which will provide a good rate of return for both the short and long term. They aren't frantic people prone to every news headline to sway them one way or another, and they're not followers and cowards. Real investors are leaders with a good understanding of markets who possess foresight. The vast majority of investors today are greedy, soulless neurotics. They are the ones that make the markets go up and down violently for no consistent rhyme or reason.
The truth about today.. why did the market go up then go down? The investors are reacting like frightened puppy dogs.. can't decide where to run so going back and forth. They need to invest.. Need it like you and I Need breath in our lungs, and can't figure where to put their money. What to exploit? Where to profit.. Must Profit... And so you had a choppy session as traders are panicked as where to put their money to give them the biggest and quickest bang for their return, and there's too much uncertainty all around..
Ulimately 99% of the time the market goes up or down on a trading day has little to nothing to do with the reasonings given by the media. The markets are constant movements.. algorhythms.. professional daytraders.. It is a Dangerous place to put your money unless you are in it for the Very long haul.
Posted by Susquehanna at Tuesday, July 12, 2011