This Is Your Stock Market On Drugs.

I’m not the only bear out there.  This is your market. Yes, there are major issues as shown, but what if this guy is right?
There’s no way I agree with Tim Knight’s view, but it almost seems that way, doesn’t it? Remember, Tim is a huge bear as well.
 
Moving right along… we will NOT get a “sell, sell, sell” warning from Wall Street. Hell, we’ve been getting them for over a year from some of the biggest money managers out there- nothing so far.
 
Your charts are your only friend. Why? Because that’s real money moving in and out and you are paid on being right as to the direction (trend) of price movement. Yes, there are less and less stocks participating; yes, as the article points out, there are less leading sectors participating; yes, the smaller stocks (IWM) are lagging big time.
 
Still, if you’re paid to trade with the trend, even though, participation is waning, you have to trade with trend… albeit, as I suggest, smaller size while maintaining a known reversal trade ready to execute.
 
You are playing in a risk game. You are trying to understand economics (not exactly a precise science, in fact certainly not a science) in 2017 which in no way looks like economics prior to 2007. The fact is there are waaaaaaay too many variables to ponder and so we read what we can, understanding what we can, appreciating what we see divided by the number of articles read for the week, and place our bet. (I do hate using that word, but what else can it be called? Even a hedged bet has potential for loss.)
 
Now, why would I talk like that, stressing the risk? Because, unlike neophytes in this market, my first question is NOT how much can I make on this trade, BUT how much can I lose on this trade? I have a very clear understanding of working capital and preservation of same… without it, I’m out of the game altogether.  I’m VERY willing to risk it, but on my terms.
You see the indices trying for new highs. That’s nice. There’s only one thing wrong:
onething
Any and all markets, whether the indices, metals, and bonds are tradable over any time period. Do you know what you’re doing considering your time view?
 
Stalk your trade. Plan your trade. Execute your plan.

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Bovine or Ursine; Donkey or Elephant Dung: It All Stinks.

Here you are at the Wall Street Pirate looking for a prized nugget of Wall Street trading wisdom. You want a trade tip, maybe learn some trading tricks, or how to avoid traps, and/or you want new trade techniques.

But is that really why you’re here?

Maybe you stumbled onto this page searching for pictures of bulls, bears, donkeys, or elephants. My guess is that ‘looking for pictures of dung’ would be a long shot.

Aren’t you really here because you can’t find anything to read, anywhere, in any language or publication that does not contain the letters t, r, u, m, and p? That’s what I thought.

Now, as long as you’re here and for whatever reason…

In the stock market, we refer to participants as being either a farm animal, a bull, or a forest dweller, a bear.

It’s a simple concept. If you’re positive on the market, you’re bullish. Bulls fight by charging with lowered heads and then lifting that massive, horned head upward to strike their opponent.

In the market, the opponents of hoofed bovine are known as bears (furry-pawed ursine). These bears are not to be confused with Smokey, Yogi, or Boo Boo.

Every minute of every day the bovine herd fights off a sloth of ursine for control of the market. (Yes, a group of bears is called a sloth. Go figure.)

Market bears expect markets to go down. Lumbering bears can still be fast and are known for fighting by swiping their powerful massive clawed-paws downward.

On their respective Facebook pages, I’m sure bovine and ursine describe their relationship as “it’s complicated.”

It may be economic activity that jolts the market animals into action in one direction or another, but often that jolt comes from the actions of two other animals… another farm animal, the donkey, and a jungle animal, the elephant.

It does conjure images of stubborn Democrats and powerful Republicans respectively, doesn’t it? (Be my guest, transpose the adjectives describing either party.)

Why the donkey and elephant? “…cartoonist Thomas Nast used the donkey in his newspaper cartoons, helping to establish it as the symbol of the Democratic Party. And it was Nast who provided the Republicans with their elephant. … In an 1874 cartoon, Nast drew a donkey clothed in a lion’s skin – scaring off the other animals at the zoo.”

In the off-chance that you’re not aware of the stock market’s advance since the 2009 lows to present, and/or from the November 2016 election to present… the gains for the Dow Industrials are 241% and 24% respectively.

The market animals dance to the tune of the political animals since they control fiscal policy, how tax money is spent. It doesn’t matter to the donkeys and elephants that they are 21 trillion dollars in debt.

The market animals must keep bubbling the market upward.

The market gain mentioned is considered by assorted ursine gurus as “overvalued, and too expensive.” They await a market correction any day now. The problem is they’ve been in that expectation mode since 2015.

If you’re a market participant or market junkie, or if you’re a political news junkie that can’t get enough social media discussions, distractions, or if you’re just a gossiper of anything and everything… know this: Whether your animal is the bull, bear, donkey, or elephant whose respective dung looks like, well, a heaping pile of shit… it all stinks.

Something is very wrong with the markets and the animals know it.

Something is very wrong with the political system and the animals know it.

Still, the largest animal herd of all, the sheeple (whose own dung apparently does not stink, just ask them) have yet to smell it all for what it is… bull, bear, donkey, and elephant shit.

And it all stinks.

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Stock Market Paradigm Shift

“I care not what puppet is placed on the throne of England to rule the Empire, …The man that controls Britain’s money supply controls the British Empire. And I control the money supply.” Baron Rothschild advice given to the ECB and FOMC.

 After today, a paradigm shift in our market has occurred, in my humble opinion. Not just any old shift, a paradigm shift. I’ve always understood that by adding the word paradigm it somehow makes it seem incredibly different, incredibly important. We’ll see.
We are seeing the end of central bank support in Europe, which started the selling today, as well as the posturing of our Fed to hike rates, as Mr. Lacker says, as soon as November. You saw the market reaction… stocks, bonds, gold, currency, all down.
I’ll go one opinion further and say that I believe a November rate hike is exactly what we’ll get, after the election.
Since both GOP and Dem candidates have been forecast to cause a correction (crash).. what better plan can the Fed ask for: raise rates in November, allow the crash (correction), blame it on the politicians.
You can day trade, swing trade, or position trade… but you have to be in the market to even have a chance at making money while putting your money at risk. Oh, and when you’re in the trade, you have to manage that trade.
It all makes sense at some point since there is method to the madness.
Posted in black swan event, day trading, economy, Fed, FOMC, interest rates, janet yellen, market direction, market gurus, paradigm shift, psychology, rate hike, Stock Market, stock market direction, stock market trading, swing trading, think outside the box, trading, Trading Stock Market | Tagged , , , , , , , , , | Leave a comment

U.S. Steel Corp. Is Too Heavy

Summary

Even next week’s Organisation for Economic Co-operation and Development meeting regarding global steel capacity and pricing won’t help.

All steel manufacturers are not created equal. Management, operations, and technology combine to make a difference.

In the end, earnings and management do matter. U.S. Steel Corp. is a short.

Originally submitted on April 17, 2016

Since 1901, U.S. Steel Corporation (NYSE: X) has evolved its operations into three major segments: Flat-rolled steel – for use in automotive, consumer, industrial service, and mining markets; U.S. Steel Europe – for construction, container, appliance, oil, petrochemical, and transportation; finally, the Tubular segment goes to oil, gas, and petrochemical markets.

Recent Upside in The Steel Industry – Demand or Luck?

So far this year, U.S. Steel Corp. stock is up 200% from the February low. That’s considered pretty good when a company is, you know, actually making money. U.S. Steel Corp. is not, so what gives?

I believe the recent upside is luck.

See the full article at SeekingAlpha.com.

Posted in earnings, economy, Short, speculation, Stock Market, stock market trading, swing trading, think outside the box, trader psychology, trading, Trading Stock Market, U.S. Steel Corp. | Tagged , , , , , , , , , , , | Leave a comment

Bear Toast To Bull Boast- 1995 Redux

The Baltic Dry Index measures the rise or fall of fees charged by shippers to move raw material. Why would shippers feel they could charge more unless things were improving?

The shipping company stock charts are trending up on those higher fees.

Charts are unemotional, unbiased, non-opinionated… real money moving in and out leaves a trail shown on the charts as a trend. What do we see?

You cannot see my grimace as I smack the keyboard with bandaged paws. My bear paws were burned, stomped on, and gored by bulls that frankly I thought were running solely on Fed supplied hopium. How else could we explain so many “V” bounces in the last three years?

In the end, does it matter why it happened? I think most market participants will point to the Fed and zero interest rates; the end result was too many too hot to handle flaming “V” bounces.

At this point, however, I want to explain why, when these bandages come off, I hope I’ve morphed and see hooves rather than paws.

See the full article at SeekingAlpha.com.

Posted in day trading, economy, Fed, market direction, position trading, Stock Market, stock market direction, stock market trading, swing trading, trader psychology, Trading Stock Market | Tagged , , , , | Leave a comment

The Inviting Stock Market Rabbit Hole

“There is a place. Like no place on Earth. A land full of wonder, mystery, and danger! some say to survive it: You need to be as mad as a hatter. Which luckily I am.”- The Mad Hatter from Alice in Wonderland.

The rabbit hole metaphor has been used by teachers and authors to demonstrate the adventure of learning. One’s comfort level during the trip notwithstanding, it’s all about the lesson(s) learned.

What can be more adventuresome than trading the stock market?

For that matter, if you’re new to the stock market and trading, is there a seemingly deeper rabbit hole than learning how to trade once you enter? A new student’s life flashes before him as the market’s rabbit hole reveals deepening entryways with tangential pathways.  A look over his shoulder reveals more doors amid hallways with stairways up and down to more levels.

The stock market rabbit hole (SMRH) is not as shallow as the one seen in Bugs Bunny cartoons. Elmer Fudd would stick his head down the hole and voila, there sat Bugs in an easy chair chewing his carrot. A second or two later we’d hear, “Eh, what’s up, doc?” Mr. Bunny’s residence did not have hallways or split-foyers to give Bugs’ home depth.

To a beginner, the stock market rabbit hole (SMRH) appears to have more permutations, twists, turns, paths and tunnels than Boston’s Big Dig. The SMRH expands, contracts, twist and turns in and on itself as traders seek a rewarding adventure.

Rabbit hole travelers, whether scurrying through a mind map, subway map, process map, or stock market finance map follow twisting paths in search of a truth, knowledge, or the nature of things. The “nature of things” in the SMRH means profit. SMRH travelers search for truth, knowledge, and profit.

The function of the stock market is referred to as price discovery. It “discovers” price every minute of every day as it accounts and then discounts all relative data affecting stocks, bonds, and future cash flow.

A new SMRH traveler gets a taste of the market’s fickleness, volatility, fear, and greed as price moves sharply through well-considered but doomed calculations that logic (or was it the Chesire Cat?) declared valid.

The rabbit hole becomes crowded with bulls and bears clogging up the hallways and stairways. Paws are slapping downward onto rising horns with both taking positions as opposing armies might on a field of battle.

The stock market’s rabbit hole is multi-leveled and multi-chambered according to size and economic significance. The bond market, for example, may not be as splashy as the stock market but it is easily two to three times the size of the stock market.

Furthermore, the way market participants move around (trade) within each level, within each chamber makes for the bull-bear drama that makes day to day headlines.

It’s the Mad Hatter’s tea party and the Queen of Hearts croquet game in progress simultaneously. All participants are, like poor Alice, changing in size, significance, and outlook.

Some time later a cry is heard: “Eh, what’s up, doc?”

Startled students reach out and turn the page of their book, “How to Trade Stocks,” Chapter Two.

Posted in culture, day trading, economy, Fed, FOMC, game plan, lifestyle, market direction, problem solving, psychology, speculation, Stock Market, stock market trading, trading coach, trading for a living, Trading Stock Market | Tagged , , , , , , , , , , , , , , | Leave a comment

Wall St. Shrinking Workforce- Not Good

Oh really?
One thing I’ve learned over the years of being on, around, with, under, on top of, and at the bottom of Wall Street’s markets: when brokerage firms start laying off brokers, traders, and staff, there is a major slowdown coming (recession?). Bank of America is preparing big layoffs in investment banking and trading, oh and there’s more, lots more, here.
What do you see from clicking that ‘here’ link? Right. Wall Street firms are laying off, thinning payroll because they expect less business. Those firms hire in advance of business booms and layoff in front of big slowdowns. You may not like Wall St. firms, but they are not stupid.
Here’s why that’s important to me: I’ve been trying to make a relatively bullish case in the Trading Room pointing out rising industry ETF charts and so on. In other words, as bearish as I’ve been all along I recently could find reasons to think bullishly until that latest Bank of America headline. It reminded me simply of previous bank downsizing in recent years. As a result, I’m back to being cautiously optimistic realizing that the market always gives us a last chance to exit before a breakdown.
Pull up a 20 yr. daily SPY chart. Follow the chart action paying particular attention to: 10/21/97, 7/22/98, 8/25/98, 9/1/2000, 11/7/2000, 12/10/07, 9/19/08, 12/1/15, and 12/16/15. Notice that last rally that failed to get back to previous highs?
How about Friday’s bearish candle (2/26/16) or will it be 2/29/16 that tops out? If you draw your downtrend line from 12/2/15 maybe SPY moves to just under 200 but can’t break above and rolls over. I certainly don’t know how it will play out but my bearish antennae are on full alert going into March even though I know Mr. Draghi will pull the trigger in March…. just when I thought it might make sense to sharpen my bull horns.
(Once again, why do I write out chart data I want you to examine rather than just show you the chart… because when YOU do the chart work you’ll remember it, it will mean something to you. If I just give you the chart, you look at it and shrug… and move on.) Come on, learning to trade means you have to do some work.
May we live in interesting times…. oh, wait… we do! Meanwhile, trade what you see while preparing for what you don’t see.
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