| Friday, June 14th, 2013 | | | | | |
 | | | | How to Ignore Wall Street's Worries | | | - Trouble or no trouble? The summer chop takes us higher this time
- A little drama for the market goes a long way
- Plus: Armchair economists vs. market players
|
| | | Greg Guenthner coming to you from Baltimore, MD...
 | | Greg Guenthner | Once again, all of that worry for nothing...
Remember Wednesday? I told you that for the first time in months, a majority of stocks were below their respective 50-day moving averages. The market looked terrible. But in fairness, it kept its head above water (and above its all-important 50-day moving average).
Thursday was different. Everything bounced back in a big way. Right at support. Again.
Markets surged. Japan even took a breather from its elaborate skydiving maneuvers. We will see whether or not the parachute fully opens soon enough.
The weekly data dump was also surprisingly pleasant. Retail sales beat estimates. Initial jobless claims remained near five-year lows.
But the real worry du jour is the Fed. Will it continue to maintain short-term rates?
"The market is saying, 'The fundamental economic outlook really hasn't changed much, but we are getting more worried about Fed policy,'" chimes in chief Goldman Sachs economist Jan Hatzius in the Wall Street Journal.
So investors are starting to doubt the Fed's commitment to keep short-term rates down. As far as I'm concerned, this is noise investors need to ignore. File it under "fiscal cliff" and "sequester". If you're trading off of Fed policy scuttlebutt, I don't think you have much of a chance at seeing the markets very clearly… In fact, making quick, radical decisions in this tape will just wear you down. You simply have to take a wider view of the markets. Buying and selling at every turn will only make you crazy (and broke).
As I told you earlier this week, this particular bounce off support has been different from what we've seen so far during the current rally. Stocks did not immediately rocket back to new highs. Instead, we got to watch a little back-and-forth drama in stocks for the first time in many, many months.
But if there's one thing you should've figured out by now, it's that you can't lean heavily on the short side as the market approaches support. That's a surefire way to get burned.
Sure, there's plenty to worry about (there always is). But until price tells us otherwise, we have to respect the trend. | | |  | | | | Rude Numbers | Targets, Predictions and Wild Guesses
| | | | $1,381 | is where you'll find gold this morning. The yellow metal has remained stuck in a tight range all week… | | $101 | is the price of a Bitcoin today. The crypto currency also remains stable (boring) this week. | | 334,000 | was the initial jobless claims number that beat expectations yesterday. It's still the lowest level we've seen in five years… | | 1,648 | is the magic number for the S&P. If it can crack the June highs, we'll probably see another rally. | | 76% | of all stocks moved higher yesterday—a complete 108-degree turn from Wednesday's bearish action. | | | | | | | | Rude Trends | When to Buy... When to Sell
| | | "Your uptrend is at risk of being violated," warns a reader. "If the trend holds then all is well with the stock market but if it gives you have to wonder if rising Japanese yields are going to kill the economy and send stocks into a tailspin. Could just be a minor correction, just as gold might be in a minor correction rather than your belief it is a secular change. Corrections are healthy but painful if you ride them out… Play the trend but your overconfidence regarding stocks vs. gold will eventually bite you."
It's cute that you're trying to speak my language here. But you lost me when you tried to play economist. If you haven't already figured it out, economists usually make lousy investors. They tend to get too caught up over what they believe should happen, as opposed to what's going on right in front of their faces…
And why my uptrend? I don't pretend to claim ownership of the ebb and flow of the markets…
You must have me confused with someone else. I'm not some cheering market spectator drooling over every swing higher. I'm here to make money—and to help you do the same. The market speaks, I act (and if you play nice, I might even translate some of the more nuanced messages for you).
By the way, gold's "minor correction" is officially a bear market. It has been for weeks. That's not my opinion—it's a fact. By definition, that's a secular trend change. Burying your head in the sand can't change that.
Look, I'll make you a deal:
You keep playing your little armchair economist game, while I (over) confidently play my trends. Come back and a year and let me know if you have any money left…
[Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner] | | | | | | | Ignore At Your Own Peril | Today's Must Read Links
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