Morning Update: July 10, 2014

1-855-RWT-0008

Random Walk’s Motto:

Success through integrity and care. The law of abundance means we can all win.

55 Days in a row where the market has not made a >1% move. Unsustainable? YOU BET

Happy Day!

Yesterday and Today

Yesterday

A quiet and slightly positive day until the Fed spoke.

LESSON: What is CNBC great at? Besides Art Cashin and Rick Santelli, they are good at creating a Lot of noise. That noise is great WHEN you listen to the anal-cysts talk about their views because they are seldom right, but they are convincing. They present an awesome argument for something and people believe it.

Yesterday and today I was listening to them talk about their fears and concerns about the Fed tightening faster than the $10bln a month they have been doing. That, I am convinced, is a good part of 

the reason we were down 117 yesterday. People were afraid about the “What if the Fed…..?”

Truth be told, there is no mature and logical reason to think the Fed would do anything other than what they said they would – taper $10 bln until the end of October. The economy is not cooking strong. As a matter of fact I think we are weaker than the time leading up to the POP of the housing bubble. The only thing good in the numbers is unemployment, and that is only if you are looking for a job at the counter of Bed, Bath and Beyond of McDonald’s.

Middle class jobs where a husband (or wife) can support a family are not in short demand. As a matter of fact many people who had one good job 7 years ago now have 2 or 3 lousy ones. So some people (50 million of them if keeping score) are not even looking for jobs. 10,000 of them alone showed up in Washington to watch the first Pot store open, and this was during normal business hours. Obviously they were not going to work.

So KNOWING that the economy is doing average (not burning on all cylinders), there is no reason for the Fed to even taper fully, let alone faster than $120 bln a month. But the fear of it tapering possible $15 or $20 was a reason for the fall (at least partially).

So listening to CNBC as an observer to compliment with some common sense is good. To find trading ideas is bad. We obviously bounced after the Fed announced that they were doing exactly what they said they were going to do.

Today

I had a very strong suspicion that the market sell off was a joke on Tuesday, which is why we demonstrated getting long when the market was down 100. Now? I can’t see us not going through 17,000 again, but I am not committee to it anymore. 

POT is held each Wednesday night at 7:00pm eastern.

Contract the office at 1- 855 – RWT – 0008 for more details. 

Too True To Be Funny

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