Are you ready for the US Employment report this month? By now the excuses of harsh weather are over with.
Continue reading “US Employment Report – April 4, 2014 – A Historical Statistical Perspective”
Market Commentary – March 31, 2014
Has the sideways trading in the S&P 500 frustrated you? Perhaps it has saved you by keeping your mistakes manageable. Maybe you have been selling options to sell volatility to benefit from this range bound trade. Whatever the case hopefully you are not lulled into the trap of complacency.
Market Commentary – March 24, 2014
Last week the markets were not as interesting as the US College Basketball tournament known as March Madness. Will this week be any different?
Market Commentary – March 18, 2014
Beware of the ides of March, or in modern times beware of the news. It is easy to get wrapped into the drama of news and make irrational trading decisions expecting extreme events to occur. If you invest long enough you’ll come to realize that betting on extreme events more often than not leads to disappointing results. Most often when you are correct the payoff does not always make up for all the losing trades along the way. That is why we stress rational thinking here. Would wagering a weeks salary on lottery tickets sound like a good strategy? So how does this apply to the current events? Continue reading “Market Commentary – March 18, 2014”
Market Commentary – March 10, 2014
Now that daylight savings time has started, the extra sunshine should shed some more light on the markets. After the latest US employment report, and continued news out of Ukraine, the equity market continued its march along to all time highs. However the reaction was subdued. The real action was in US Treasury Bonds.
US Employment Report Preview – March 2014
This Friday the US jobs report will be the focus of the market. Since most of the economic reports of late have blamed less than stellar results on the weather, traders are probably numb like frostbitten fingers by now. A disappointing number will probably not surprise anyone. The way the market has been behaving lately, bad news will be good for the market. The risk may be that the number is much better than expected. That may spark fear that the Federal Reserve Board may speed up the pace of reducing the bond buying program which has settled and helped the market take off the past few years. With the market at all time highs, perhaps a good employment number will be the opportunity for traders to take profits and lead the market lower. Only to take it back up later. What matters is that you are prepared to ride the wave.
Continue reading “US Employment Report Preview – March 2014”
Market Commentary – March 3, 2014
Are you ready for a busy trading week? This week could turn out to be one of the more volatile trading weeks of the year so far. Either be prepared to act swiftly or make sure you have a strong stomach.
Market Commentary – February 24, 2014
Despite the break from the polar vortex, trading was frozen last week. Was the weekend warm enough to thaw the markets before the next freeze?
Market Commentary – February 10, 2014
Did you get caught in the bear trap? Listening to all the doomsday correction pundits?
Ready For the Monthly US Employment Report – February 2014?
The US Non-Farm Payroll report is a popular day for professional traders. The day usually brings a sharp move the moment the report is released on the first Friday of the month at 8:30 AM (EST). Traders usually like to take advantage of the sharp move and close out a position seconds, minutes, or hours later. However, if you hold on for too long, you might be disappointed, as the moves may come back to earth. Be prepared with some statistics for the ETFs that track the S&P 500 (SPY), Gold, (GLD), and US Ten Year Treasury Rates (IEF). The numbers below represent, in absolute value, the size of the moves of the given category. For example, the overnight move (Day Before Close to Open on NFP) for SPY (S&P500) is on average $1.78 up or down. So if you are making a directional trade or a volatility play, understand the size of the move you can expect.
| Ticker | Spot Price | Open to Close on NFP Day | Day Before Close to Open on NFP Day | Day Before Close to Close on NFP Day | Typical 1 Standard Deviation 1 Day |
| SPY | $177.04 | $1.30 | $1.78 | $1.35 | $2.15 |
| GLD | $121.20 | $0.80 | $1.60 | $1.25 | $1.59 |
| IEF | $101.75 | $0.24 | $0.35 | $0.26 | $0.46 |
Don’t let trades outlive their usefulness.
Good luck and trade rationally.