The days and weeks I spend analyzing and participating in market activity, I view it as an education more than anything. Our current situation is a great example. What is going on here? Does Goldilocks warrant this type of maret response? Furthermore, if rate increases are realized marketwide 12-18 months after they are levied, then I say we have seen about a 3% FED Funds Rate so far.
After an unsuccessful short attempt based upon the fact we are slowing, and entering a seasonally weak time period (October November selling), I have decided to watch this unfold, rather waiting to short when we realize Goldilocks did not want to sleep in this bear house.
Until then, feed upon these terms and their definitions. Some may be helpful.
Dumb Money
Also known as Retail Money, Momentum Money, the process of allocating funds solely based upon the recent performance of an asset class, with the notion it is acceptable due to the fact it not only works but it is the prevalent topic in the media.
Economic Slowdown (Soft Landing)
Growth slows to a point that recession is avoided, as is inflation. See Goldilocks.
Raging Bull
See Dow Industrials.
Key Reversal
Pattern that signals a reversal of the prevailing trend. The reliabiity of the pattern is tied to the strength of the prior trend. The stronger the trend, the more reliable the pattern. For a key reversal after an uptrend:
1) The open must be above the prior day’s close
2) The day must make a new high
3) The Close must be below yesterday’s low
Overbought
A market condition wherein a stock, sector, or index has extended outside it’s normal range to the upside. Often accompanied by increased vloume and a string of consecutive positive sessions, the condition implies a near term reversal is likely.
Smart Money
Money bet or invested by experienced investors (especially those with inside information)
VIX
The CBOE Volatility Index (VIX) is a key measure of market expectations of near-term volatility conveyed by the S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world’s premier barometer of investor sentiment and market volatility.
Mid Term Elections
2006 General Elections for Governors, U.S. Senate, and House.
ARMs 5/1
An adjustable rate home loan with a 30 year term. The interest rate remains the same for the first 5 years, then changes annually thereafter.
