The IRREFUTABLE LAWS of Trading
Six STEPS Every Trader MUST KNOW to Succeed
Step 1. A move begins with the sponsors who have insider knowledge as it relates to a particular stock or futures market. This information will move a market up or down depending on the insiders information. (These buyers are very smart and recognize opportunities early.)
Step 2. Occurs days, weeks and in some cases, months after a move has started. There may be a mention in the electronic media (radio, cable, TV) that a market has moved. (Public hears for the first time and starts getting interested. Does not buy.)
Step 3. A blurb of information appears in the print media (yes, believe it or not, a lot of people still read newspapers and magazines). (Public begins to get interested and starts to buy a little.)
Step 4. Wall Street and LaSalle Street brokers go into full hype mode and hawk the market to their customers. (Public begins buying in earnest.)
Step 5. A full blown article appears about the particular market or stock in one of
the major financial newspapers or magazines. This can be six months after step one and after a market has shown its greatest appreciation. (Heavy public buying/possible frenzy as all media, brokers, gurus start to tout the market.) Remember the dot-com bubble?
Step 6. The sponsors and early insiders begin to move out of the market and take their profits off the table when Step 5 is underway.
It's always supposed to be different ... but it never is.
History repeats itself over and over again.
MarketClub not only gives you the tools you need to grab profits on the upside it also gives you the tools for diversification and money management, two key elements of managing your risk.
Here's to better and more successful trading.
Adam Hewison
Co-Founder MarketClub.com
was it ever thus the law of supply and demand are inmemorial and always will be
Adam,
Since you show the Barron's article are you saying we are now in stage 5 - the endgame of the commodities boom? As a retailer of heating oil I sincerely hope so!
Will sure put this in my "favorites" Johnnie Montpetit Montreal
Johnnie,
Thanks for your positive feedback.
Adam
GOLDMAN WANTS TO TOUT CRUDE UP TO $250 AND, STRANGELY, WHAT IT WANTS IT GETS. I'D USE CALLS HERE BECAUSE A SELL-OFF WOULD BE A DEVASTATING MARGIN-DESTRUCTION DEBACLE! PLUS, THE $250 CLZ9 CALLS ARE DIRT CHEAP, MUCH MORE SO THAN 15 LARGE PER CONTRACT! THIS TOUTING ACTION IS PROBABLY THE MIDDLE OF THE ABOVE CYCLE-PROCESS DESCRIBED. SMART WAS 2 YEARS AGO, MEDIA HYPE IS NOW AND SELLOFF IS DEC. 08 OR 09. NICE ARTICLE, SIR!
Nice piece Adam. I wonder if folk also realize that europhic participation in a market actually helps change the fundamental trend \'before\' the technicals change direction. A great way to demonstrate this is in a commodity.
When sugar is cheap no one wants to produce it, but because no one is producing it the fundamentals are changing behind the scenes, i.e. the supply is decreasing. Eventually as demand exceeds supply prices have to adjust accordingly, and the higher it goes the more people want to produce it. But the more people jump on board to produce it, the more sugar there is around, and so price must adjust back down.
I would say that currencies display this but on a lot longer time frame.
But the mother of all - the credit bubble - 60 years in the making. Credit affects everything. So I believe that supply and demand also affect the equities markets.
Keep it up
Thanks.
Adam
Adam,
I have to say that my hat is off to you (a figure of speech of which you are well aware...especially since I usually don't wear one!). Your latest overview of the "activities" behind a price movement and the general time pattern involved is very cogent and, considering how quick a read it is, quite accurate.
As well, I note that you rarely let much time go by before offering a fresh observation.
Once more... bravo!
My best,
Mike