Random Walk Trading.com

Thursday

December 11, 2014

1-855-RWT-0008

Prepared by the good people at Random Walk, LLC.

VEGAS

I bought 4 extra tickets to Cirque Du Soleil “O”. The first 2 couples or 4 singles enrolling in the class get them.

I don’t want to penalize those enrolling online for “at home” viewing, so anyone who has not taken advantage of the early enrollment price will get $100 off UNTIL THE TICKETS are given away.

Almost Sold Out

This class is going to be three days. During the Maui ’14 class (second session) the markets fell like a rock and people asked I stop teaching the material just to trade. We were told that this was the best day ever, and people wished they had a class of just this. They enjoyed hearing me think out loud as I walked through every trade.

That is why we are having this class. The third day is Q/A. Write your questions so we get an early warning and can prepare slides if necessary to explain the answer. Who would not want this?

Great Morning !

Closing Prices From Yesterday

Today’s Number(s)

Yesterday and Today

Yesterday

!No Mas!

The markets gave up yesterday on NOTHING. Oil falling $3 is not suppose to take the market down 268 Dow points. Yes, the fall of oil does hurt companies such as XOM, but it helps other companies such as United (UAL) inversely.

Why did we really fall? How do I know, I didn’t see it coming. Yes there currently is the mentality that falling oil prices are bad for the stock market, but there are times where it works the other way. Maybe people in commodities had to liquidate stock positions to meet margin calls? Maybe people were expecting the market to move higher because it is December and they all capitulated simultaneously?

It doesn’t matter.

Most every December the market sells off 2-5% in the first half of the month and then advances after, usually more than the selling. I thought we ended falling yesterday after the 220 point down open, but oil falling another $3 was more than people could stomach.

TODAY

I suppose we are held hostage to the whims of oil traders today. This stupid lockstep with oil prices will eventually end, and then people will be grateful. They will be grateful for lower gas prices and the ability to buy stocks a 17,500 (instead of 18,000).

If I had a gun pointed at my head to pick a market direction, I would say we are done with the 500 point sell-off (for now). I am thinking we are near a bottom and the next couple of weeks will look the opposite of the last two weeks.

BUBBLE

6-12 months

In the future, which is rapidly approaching, the bubble will pop. Only two things destroy a bull market – rising interest rates or a declining economy. And that is coming.

I am doubting it will be rising interest rates. The Fed has $4 trillion reasons not to want rates increase. I do think it will be a declining economy. Yes, the Dow is at all time highs but that is the only good thing happening. Four trillion in bond buying is equal to the stock market going up $4 trillion since QE started.

I am even seeing television commercials where a $180 product (coffee maker) is being sold in 12 equal payments of 14.95. This same thing happened in the mid-late 1920’s.

People must be maxed out on credit cards or they would just put the 180 on plastic.

People can not gt a home loan unless their credit is perfect, and even then they have to go through a body cavity search to get it. Low rates with no money being moved around is no advantage.

Unemployment is at 5.8% but only because people have given up on getting their $100k job back, and are now working at Starbucks and Costco to get insurance for their family.

Bottom Line

Obama doubled the deficit in the first 2 years in office. It was not until the government shutdown did the hemorrhaging slow to a gushing stomach wound. The Fed bought $4 trillion worth of bonds which did NOTHING but cause the stock market to rise by $4 trillion.

If the economy can’t get better with that much help, nothing will. This $13 trillion equates to 39,394 per person (over 100k per family) for everyone in this country. Had the government just given everyone $39,000 for every man, woman and child in this country I KNOW the economy would be cooking. Hell, families of 4 could have bought a home in some neighborhoods outright for that amount. That would have propped up the housing markets, given more disposable income, raised home values so municipalities could solve their economic problems, etc.

All we have is all of those shovel ready projects we heard so much about, and double the cost of our affordable health care. This is the end of times in the near future. This is a BUBBLE (in my opinion). But just because it is a bubble it doesn’t mean it can pop until too much air is in it.

So buy a coffee pot for $180 with 12 easy monthly payments, or save that $180 for puts that will make you a house when this thing finally collapses.

Overseas
It is happening already slowly in Venezuela, China, Greece, Spain, etc. Those countries are not popping yet (just hissing air) because the US sends its money (trade deficit) everywhere around the world, which helps prop things up (for now).

POT LAST NIGHT

Below is the schedule for the month.

Last night we discussed the trades that need to be rolled for Dec2 expiration, what happens to PNL when a very good hedged position tests a market sell-off, and getting a long call 1-5 trade.

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

Too True To Be Funny

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Attorney Stuff

DISCLAIMER (Seriously!) All data above is provided for informational purposes only. Random Walk makes no guarantee as to the accuracy of the data.

Trading is almost as much fun as black jack in Vegas, but without all the annoying distractions of free drinks, Broadway shows, gorgeous people with low morals, and free buffets. It also has about the same odds of success, so when you lose all your money you wont have to walk past a smiling pit boss. Even Bruce Wayne lost everything with options in The Dark Knight Rises, and Superman keeps his day job at the Daily Planet newspaper.

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