Larry Levin's Blog (68)

Jobs Part 2

Help-Wanted

Friday’s NFP number (non-Farm Payroll) report was better than expected. At 171,000, it was better than even the highest estimate by economists…by a wide margin.

Some economists thought that hurricane Sandy would negatively impact the NFP results, but they were wrong.  The Bureau of Labor Statistics (BLS) had finished gathering its data before the storm struck.  It will surely, however, impact the next reading on…

Secret Trading Tip #16

Buyers or Sellers



A question I often receive is, "How can there be more buyers or sellers at one price? Isn't there a buyer for every seller and a seller for every buyer?"

The answer is yes, but people are forgetting one important thing. There is a bid and an ask (or offer), and only one of them can be traded at a time.

A bid is an expression of willingness to buy at a price; an ask (or…

Land of Oz

ruby-slippers-wand

Friday the preliminary look at Q3 GDP came out and "beat" expectations of a 1.8% print, with a 2.0% reading. That seemingly sounds positive, but since its “election season,” we need to delve deeper into the data to get the real story.

When you pull back the curtain, you of course see Mr. Wizzard manipulating the numbers. Because of the 2.02% annualized increase in GDP, over one third, or 0.71 %( compared to a deduction of -0.14% in Q2), was…

Secret Trading Tip #3

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A Little Lesson in Lingo

The world of trading has many parts that seem a little foreign to new traders. There are plenty of catch phrases, symbols, and other banter that can be intimidating or even confusing at first. One of the biggest sources of confusion includes the shorthand that you see for many markets. Understanding what you are reading is important, and learning the basic lingo can come…

Earnings Misses



Whether stocks have missed analyst expectations, missed on their respective top line growth estimates, or warned for future revenue misses, when they release their statements they are punished.



For several days it seemed like the overall market would focus on Bernanke’s QEternity buying spree and ignore high-profile disappointments, until Friday.  Like all bad news on Fraud Street; it is ignored, until it can’t be ignored any…

Secret Trading Tip #14

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Getting Technical

If you know your way around a price chart (Tip#5) then you are ready to learn a little more about technical analysis. This kind of analysis is defined as an attempt to try to forecast price movements based on patterns observed in price changes on charts, or other changes that are not rooted in fundamental observations. …

Add 10 Zeros

It was yet another week of off-kilter markets and unexplainable reactions to economic data and macro-events. It’s hard to tell if we are in a bad is good or good is good or everything is bad cycle?  

The one thing we can be sure of is that while you have just read this sentence, the national debt has increased by some ridiculous sum. For all the numbers that I consider on a daily basis, this is the one that is tough for me to wrap my brain around. How can we…

Understanding Candlestick Patterns - Harami

I've already covered some of the better known patterns like doji (Tip #18) and engulfing (Tip#19) – now it's time to add harami to your candlestick chart pattern arsenal. Let's take a look at what this technical signal looks like,…

Friday’s employment data was interesting; wasn’t it?  I think it’s safe to say that it shocked everyone but the politicians.  Like Santa Claus delivering presents to children, the Bureau of Lies & Statistics (BLS) delivered a shocking present for politicians before the election.



The Bureau of Lies &…

Trade with a Plan – Using a Stop Loss



In my opinion, every trade you consider should be laid out ahead of time with a roadmap. A complete map should have an “off ramp” or a place where it makes sense to enter the market. It should also have exits for your destination…

Recession Data

This morning’s data was bad – worse than recent poor macro data; however, the market got yet another “stick save.” Thursday morning’s economic news was, in a word: RECESSIONARY.

Durable Goods data was stinky…New orders for manufactured durable goods in August decreased $30.1 billion or 13.2 percent to $198.5 billion, the U.S. Census Bureau announced today. This decrease, down following three consecutive monthly increases, was the largest decrease since January…

Secret Trading Tip #9

The Double Stop Reversal



Stop orders are often used to try to protect profits. Take the stop order to another dimension and use it to reverse your position and open another trading possibility!



When you place a stop order, it is only activated if the market trades at or through the stop price. These stop prices are often key technical levels.



If…

As traders came into Thursday’s open and then shortly thereafter, they were deluged with bad data.  Whether it was from the US, Asia, or Europe – the economic data was in a word: horrible.  



Because of this bad data the US indices opened lower.  Yes, a lower open is shocking, but that didn’t last long.  Although the ensuing waves of bad news hadn’t even…

Healthy respect for the markets

Markets are powerful things. When you first start trading, you are likely to hear a lot about the risk that comes with the potential opportunities in trading. Don't just pay it a lip-service. It is important that before you risk one dollar, you…

Knowing your way around a chart   



For most traders, charts are like their road maps to potential trades. Technicians see potential patterns, key clues that they interpret for trading opportunities. Fundamentalists see confirmation of news stories or supply and demand dynamics playing out in the price fluctuations. Charts are indispensible to traders



Understanding what a chart is telling you is paramount for traders

We are going to…

Is this a new normal where little-to-no job growth is, well, “normal?”  Friday’s employment data was very sub-par again.…

Trade with a Plan – Setting Your Limits    

  

I think trading with a specific plan is one of the most sensible things a trader can do. It helps you learn and identify key areas to watch for in a market. More importantly, it helps you avoid sabotaging yourself because it helps keep your emotions in check. One of the key components of a trading plan is knowing your exits. One way to close an open trading position is with a limit order.  …

I thought it was unusual that nobody in the Lame Street Media mentioned the recent momentous accomplishment of the Obama administration: it has already racked up enough (current) DEBT, when added to the prior DEBT, equates to a sickening $16,000,000,000,000.00 (that’s trillion$) in the red.  Yes sir, like Fraud Street, Congress just keeps kicking that can down the road that never seems to end. But when it might, Congress decrees that another 10 miles of road lay beyond the horizon…jut…

There isn’t much left to say before the J-Hole symposium.  The market is dead, there’s no volatility and little volume.  Whether Bernanke green lights QE3 or not, one still wonders if there will be better trading ranges.  Only time will tell and time is running out.



The following is Morgan Stanley’s take on it…



Vincent Reinhart, Morgan Stanley: The Message from the Mountains



We have had low expectations for significant…

Do you like poorly crafted movie sequels? It seems like there hasn’t been an original movie blockbuster in forever. The money making formula in Hollywood appears to be: take a movie that made money on the first go, slightly change the plot, and then release the sequel, the prequel, the 3-D version until they’ve milked every last dollar out of the original idea.  “Finding Nemo” in 3-D would be the latest version.



Sadly things aren’t all that different in the markets. Friday’s…