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  • Archive for November, 2012

    Fiscal Cliff? Don’t sell due to the headline news

    Posted by Frugal on 28th November 2012

    As a general rule of thumb, whatever news that is in the headline news is not new anymore (for stock trading). In the USA especially, the traditional media all seems to flock to the same topic, taking the same side of the issues mostly. News in the US drives the emotion of the crowd, but smart capital knows better.

    The stock market probably hit a tradable low point already less than 2 weeks ago. I will be a gradual buyer here and scale in. The fiscal talk may continue to linger at the headline through December, creating more volatility throughout. However, I expect an okay-to-good first quarter next year. Two to three years out from now, I expect the stock market to break the high point since rising from 2009 low, while at the same time, the bond markets may trade lower. Mortgage yields may bottom this year or next year. Once it starts to rise, it will no longer serve the housing market by lowering monthly cost.

    The world economy sucks right now, but US will be the last domino to fall. It will fall nevertheless, but not just yet. The stocks will always reach the high and low points without the headline news people knowing. If it’s in the headline news everywhere, you can be sure NOT to bet on it (but the opposite trade is not guaranteed until it reaches the max swing).

    Best luck trading.

    Frugal at 1stMillionAt33.com

    Posted in Stock Market | Comments Off