I was in Phoenix for a meeting this past week.
Usually, the highlight of a trip like that entails desert vistas. This time, however, I had a chance to visit the stadium where the Pro Bowl and Super Bowl was held (and thanks to some friends at Infusionsoft, got to see a game there too).
It was kind of cool to watch a celebration of those just a little better than who they play against.
There is always a way to be a little better!
Déjà vu?
Here are some of the posts that caught my eye. Hope you find something interesting.
At this point, the S&P 500 is up over 200% from its March 2009 low.
This bull market has lasted 68 months, which seems like a long time ... until you compare it to the length and strength of other bull runs.
This chart shows the history of Bull and Bear Markets in the U.S.
via @jerrykerns.
Hope you are having a Happy New Year!
Here are some of the posts that caught my eye. Hope you find something interesting.
I visited the trading floor of the CME this week with Bobby Schwartz.
Notice his badge number. He used to be one of the largest volume traders on the exchange.
While there, Bobby quickly slipped into his old rhythm, and I had a chance to experience his old persona. He showed me the hand signals he used on the floor. It was complex, fast-moving, and cool to see.
On one hand, the mastery was undeniable. On the other hand, it's a reminder how fast things change. It doesn't matter how good you are, or what your edge was ... times change, markets change, and so does what a trader must do to make money consistently.
Bobby is a great example of that. He now runs one of the largest IBs and has shown, many times, that adapting quickly is the way to survive - and thrive.
No matter how you look at it, big stock market sell-offs happen regularly.
For example, we've seen two violent sell-offs in the second half of 2014. The first came when the S&P 500 quickly tumbled 9.8% from its then all-time high of 2,019 on Sept. 19 to as low as 1,820 on Oct. 15. The second came when the S&P plunged 5.1% from 2,079 ion Dec. 5 to 1,972 on Dec. 16.
Buy and Hold investors must stomach significant drawdowns to get their returns — even in 'good' years.
This chart shows S&P 500 intra-year declines compared with calendar year returns. The bars represent year-end returns since 1980, while the purple dots mark each year's market low.
Business Insider via JP Morgan Asset Management.
Basically, you have to understand that 10-15% pull-backs are normal (perhaps even healthy) for the market.
For reference, here are market correction averages and their historic frequency. Since 1900, we've seen:
Importantly, these big sell-offs often occur during years when the markets head higher.
Despite average intra-year drops of 14.2%, annual returns have been positive in 26 of 34 years.
Bottom line: Sell-Offs happen. And sometimes they're big ... But they're normal. So, stay calm and carry on.
Best wishes for a Happy New Year!
Is a Leading Indicator of Economic Activity Drying-Up?
If you are looking for insight into global supply and demand trends, the Baltic Dry Index is one of the purest leading indicators of economic activity.
It offers a real-time glimpse at global raw material and infrastructure demand, as well as the supply of ships available to move this type of cargo.
The low is troubling because this Index is often interpreted as a reliable indicator of demand. The Index moved higher from 2003 to 2008. Since then, we have seen a series of lower highs and lower lows.
The only positive I see is the divergence of the momentum indicator (at the bottom), which is higher - even though price is lower.
However, with stock markets around the world near all time highs ... and demand for bulk commodity movements at all time lows, the paradoxical position is staggering.
For commodity followers, low prices are one thing but some of that can be attributed to a soaring $USD.
The Baltic Dry Index tells us how much demand there is for movement of the commodities. It is clearly indicating global weakness and the Central Banks around the world dropping their interest rates ahead of the analysts in almost every market suggests all is not well.
Posted at 02:12 AM in Business, Current Affairs, Market Commentary, Trading, Trading Tools | Permalink | Comments (0) | TrackBack (0)
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