The markets have been acting very interesting these past couple days. It finally seems that Greece had “solved “all its issues (or at least for a couple years…..fine….couple of months) and the market doesn’t budge; actually gives up some of its gains.
Through my conversations with other traders, we all want the same thing….VOLATILITY. (Options trading works great with volatile markets...)
Why volatility? Because Bulls and Bears make money. (Bull, a trader who believes market will be increasing, Bear, trader who thinks market will decrease.) At the end of the day all traders want is volatility. Volatility gives you the opportunity to move in and out of a trade and fast, hopefully for a profit (Investors don’t want volatility, they like steady growth)
Word on the Street is that Bernanke and his boys at the FED wants to do some more easing ( the Obama administration would like this as well), they want the market to steamroll through the election year so 401K’s look good, everyone’s happy, and they keep their jobs. However there is ZERO justification for more easing right now. Im not saying the economy is great, but all the last couple Fed interventions led to higher commodity prices (think energy and food). Interest rates (what bank charges you to lend/what you earn when you deposit in a bank) are at RECORD LOWS. Money is flowing freely. If you’re not making money off of interest from the bank you go to the stock market or other risky asset classes, inflating their true value, forming a bubble. Think Dot Com bubble in early 2000’s and real estate bubble fro 2006-2008
Another thing you should all be aware of is the price of Gasoline and OIL. Gasoline is at record high prices for this time of year. Seasonally it increases during the summer months….As for oil…..it’s now at $106 a barrel, that is not a healthy amount, that will slow down growth., Don’t be fooled the economy RUNS on oil, prices are too high to grow. High oil and gasoline prices make everything cost more…because input costs, such as shipping, increase for everything. This is why high gasoline prices are considered one of the greatest taxes placed on consumers…
Be back soon………….
PLEASE DON’T HESITATE TO REACH OUT TO ME WITH COMMENTS?QUESTIONS/ARGUMENTS
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