| Monday, July 22nd, 2013 | | | | | |
 | | | | Only Idiots Make Money with Stocks | | | - Lizard brains and stock market gains
- Being right vs. making money
- Plus: Gold's oversold bounce is finally here…
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| | | Greg Guenthner coming to you from Baltimore, MD...
 | | Greg Guenthner | You're a moron for profiting from this year's powerful market rally.
"The vast majority of America's 95 million investors are trapped in this bubble of denial chasing stocks," writes MarketWatch columnist Paul B. Farrell. "Tune out your lizard brain, and tune in to your rational mind."
Sorry, lizard brain. That money you made in stocks this year? It was earmarked for an idiot just like you...
How could you act so stupidly? How could you buy stocks earlier this year, only to watch them pile gains on top of even more gains?
These statements might seem like the ramblings of an insane individual. And I suppose they are, in a way. After all, they're the smug rationalizations of the folks who were just plain wrong about the market's trajectory so far this year…
"What's insane is warning about an impending crash all the way up, and then thinking that you're correct every time the market takes a pause," says Jonas Elmerraji (who was kind enough to dig up the "lizard brain" quote for us this morning). "Farrell has been 'warning' about downside in stocks since January 1. Counting dividends, the S&P 500 is up 19.7% during that time.
"How do you miss a 20% rally in stocks and then accuse anyone who actually made money in 2013 of being a 'lizard-brained' simpleton?" Jonas wonders. "This, my friends, is the difference between being right and making money."
[Ed. note: Lizard-brained traders can make money with Jonas by clicking here]
Sure, stocks could take a break and move lower from here. With investors pouring more money into stocks now since the financial crisis, a shake-out that sends the broad market lower isn't off the table.
But I don't believe this equity inflows story is going to go away anytime soon. A lot of analysts were ridiculed back in January when the "great rotation" discussion began regarding investor's appetite shift from bonds and commodities to stocks. But now it appears the shift is really happening. And, of course, there's still a lot of money on the sidelines.
I told you last week that equity fund inflows will help propel the market during the second half of 2013. So if you ignore the noise and keep riding stocks like a slack-jawed fool this summer, you're on pace to have a great year...
| | |  | | | | Rude Numbers | Targets, Predictions and Wild Guesses
| | | | $375 | is the average price of a smartphone, down from $450 in the beginning of 2012, according to Bloomberg. "That drop has already threatened revenue growth and profit margins at Apple and Samsung," Bloomberg continues, "and could further squeeze companies like Nokia and BlackBerry that were counting on new products to revive sales." | | 68% | of all stocks listed in the U.S. are now trading about their respective 50-day moving averages… | | 1.5 billion | billion barrels of crude are sought by Houston's Noble Energy Inc. more than 4 miles below the Mediterranean seabed. If successful, it will be the deepest well drilled in Israel's 65-year history, according to Bloomberg. | | 1,691 | is where you'll find S&P futures early this morning. The broad market looks to open slightly higher to start the week. Meanwhile… | | $1,320 | marks the spot for gold futures this morning. Precious metals are enjoying a solid bounce this morning, and gold has reclaimed $1,300 for the first time since late June. | | | | | | | | Rude Trends | When to Buy... When to Sell
| | | One week ago, I told you gold was quickly approaching the most important potential pivot point it had faced in more than three months.
The scenario is simple enough: I identified $1,300 as the magic number that could trigger a snapback rally. And that's exactly what happened last night… Gold jumped higher late last evening. The yellow metal is now trading at $1,320…
"My bet is on failure at $1,300, bringing us one step closer to my $1,000 target" I wrote last week. "But I can't let my biases cloud my judgment. Same goes for you…"
Now, we're looking at gold's first significant oversold bounce since it started crashing in April. Extremely bearish sentiment worked in gold's favor, producing a nice short squeeze that propelled the spot price above resistance.
So where will the metal go from here?
The next important resistance level I'm seeing is in the $1,340-$1,350 range. Remember, until it proves otherwise, gold is still in middle of a countertrend rally. The overall trend is down. That doesn't mean a move much higher isn't possible—but there remains plenty of resistance to clear before gold can get back on track.
If you're playing the countertrend move, don't take anything for granted. Keep your stops tight and one eye on key resistance levels.
[Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]
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