LunaticTrader

Investing with the Moon

Archive for the ‘Market Commentary’ Category

Outlook for Mar 18

Posted by Danny on March 16, 2019

Outlook for world markets with my brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. It comes as a daily html file covering over 3000 stocks and ETF. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Outlook for Mar 11

Posted by Danny on March 10, 2019

Outlook for world markets with my brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. It comes as a daily html file covering over 3000 stocks and ETF. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

LT wave for March 2019

Posted by Danny on March 4, 2019

Stocks kept climbing in February. The LT wave did an OK job in calling the major swings. But in an ongoing uptrend the downswing tend to be short or shallow and that’s exactly what we got.

Here is the LT wave for March:

ltwaveMar2019

The wave projected February 1 to be a low followed by strength, which panned out OK. The subsequent weaker period only produced a few days of downside action and the S&P 500 rallied to 2800+ by the end of the next stronger period. The projected weakness in the final week led to sideways consolidation.

The March pattern projects weakness until around the 4th followed by a strong period until the 22nd, although this could contain a quick pullback around the 14-15th. The final weak of the month is weaker again.

For new readers: the LT wave is experimental, so we can’t give any guarantee that the projected patterns will materialize. We can be happy if it “works” about 60% of the time.

Posted in Market Commentary | Tagged: | 2 Comments »

Outlook for Mar 4

Posted by Danny on March 2, 2019

Outlook for world markets with my brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. It comes as a daily html file covering over 3000 stocks and ETF. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Why investing is like playing tennis

Posted by Danny on February 27, 2019

One of the first things a coach tells you when you pick up tennis lessons is to keep your eye on the ball at all times, and not to get distracted by outside noises. If you become good enough and make it to play tournaments your coach will start telling you not to watch the score too much. Play the point and still keep your eye on the ball while blending out distractions. And there will be plenty of distractions. The opponent may be receiving illegal coaching from the sidelines. A ball may be called out incorrectly. Spectators may be shouting things while you hit the ball. Or a phone may ring. Even the wind may cause you to miss an easy point… There will never be a shortage of factors that can cause you to lose focus: you stop watching the ball as much as you should and you start finding all kind of outside excuses for your bad results.

Investing is very similar. Instead of keeping your eye on the ball at all times you must keep your eye on “price” at all times and blend out all other noises. Is the stock you are trading going up or down? Of course you will watch price within the chosen timeframe you are trading. A daytrader will watch what price is doing intraday. A swing trader will keep an eye on day to day price movements. A longer term investor may only consider the weekly or even monthly moves.

And there will be plenty of outside noises that can keep you from doing that. You may think the Fed or Trump is doing illegal coaching from the sidelines. In the media you will be hearing all kind of spectators shouting their opinions on what and how you should trade. News items may be like the sudden phone call or burst of wind that causes you to panic out of your position, making you miss out on some good profits. E.g. president Xi has farted so stocks should go down. Or a commentator on CNBC is warning for a crash. Or the national debt is up again… I have been seeing that kind of news for over 30 trading years and it has never helped me to trade better. Whenever I let that kind of factors influence my trading decisions it has cost me money. If you can blend all those factors out and keep your eye on the ball/price you will give yourself the chance to play near the best you can. That’s why some people with average talent and average systems can do quite well, because they have become good at blending out distractions.

At some point a tennis player will also learn to anticipate the opponent’s shots, but only that much. If you anticipate too much or too early you will become too vulnerable to being wrong-footed.
In the same way an investor can try to anticipate what the market (=other traders) may do next. But if he anticipates too much that can become a distraction in its own right. Anticipation starts with observation. If the opponent tennis player is far outside the left of the court then you may be able to hit in the open court on the right for an easy point. But he may expect you to hit in the right side of the court, so he could be running in that direction already when you hit the shot. That could actually make hitting into the left side where he is coming from the easier way to get the point. This is the game of anticipation and how it can backfire.
In the market you may observe that a lot of traders are bullish (right) or bearish (left), but that doesn’t mean you will get to easy gains by hitting to the other side. So you can anticipate a little, but keep the eye on the price because it’s important to confirm if you anticipated rightly. You will need to react quickly if price tells you that your anticipation was wrong.

A good tennis player also needs a game plan if he is to beat equal (or even stronger) opponents. In trading that means you use some kind of method. A game plan/method should be chosen with your own personal strengths in mind. Of course, your game plan can evolve over time, as you get better and more experienced.

Bottom line: blend out market noise. Watch the price. Anticipate a little, but be ready to reverse course as soon as price tells you your anticipation was wrong. And stick to your method.

Good luck.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Outlook for Feb 25

Posted by Danny on February 23, 2019

Outlook for world markets with my brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. It comes as a daily html file covering over 3000 stocks and ETF. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Outlook for Feb 18

Posted by Danny on February 16, 2019

Outlook for world markets with my brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. It comes as a daily html file covering over 3000 stocks and ETF. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Is gold really outperforming the S&P 500?

Posted by Danny on February 15, 2019

I saw this tweet, which tries to show that gold has been a better investment than stocks:

I will shamelessly repost the chart it uses to make the case:

gold_vs_stocks

That looks very convincing, but there are a few problems with this:
1 – The starting point of year 2000 is quite conveniently chosen. Stocks were at a major peak in early 2000, while gold was at a generational low.
2 – To make a fair comparison we have to include dividends. Here is a good calculator that gives you the total return for S&P 500 with dividends reinvested: https://dqydj.com/sp-500-return-calculator/. From Jan 2000 until Dec 2018 the total return for S&P 500 with dividends reinvested is 157%, more than double the 70% used in the above chart.
3 – If an investor kept all his savings in physical gold, then he would probably have used storage or insurance or both. That would have reduced the given 345% return quite a bit.

Gold would still be the winner over this given period, but not by as much as this chart suggests.

To have a more fair comparison that has both gold and stocks go through a few bull and bear markets it would be better to take 1971 as the starting point. That’s when gold was decoupled from the dollar and started trading freely.
If we use $37.50 as the 1971 starting price and $1283 as the closing price for 2018, then we get 3,321% gain for gold since 1971.
The total return for S&P 500 without considering dividends was 2646% from Jan 1971 until Dec 2018. So, it looks like gold wins.
But with dividends reinvested an S&P 500 portfolio returned 10,813%. That’s how much difference a little bit of compounding can make over a longer time period.
Conclusion: the stock investor is almost 3 times richer than the gold investor over this nearly 50 year period.

Does this mean stocks will again outperform gold in the next 50 years? I don’t know. Some people will probably see this as a reason to believe that the price of gold must multiply by three to catch up with stocks. Who knows?

Posted in Market Commentary | Tagged: , , | 2 Comments »

Outlook for Feb 11

Posted by Danny on February 9, 2019

Outlook for world markets with my brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. It comes as a daily html file covering over 3000 stocks and ETF. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

Outlook for Feb 4

Posted by Danny on February 2, 2019

Outlook for world markets with my brief comments for next week.

Click the “Expand” button (bottom right) to watch in full screen mode.

If you have any trouble to see the presentation below, then click here.

For shorter term trading and more optimal entries there are daily reversal levels, which are available by monthly subscription. It comes as a daily html file covering over 3000 stocks and ETF. Instructions for use are included. Give it a try.

Posted in Market Commentary | Tagged: , , | Leave a Comment »

 
%d bloggers like this: