Fundamental Blather
Alan Farley, of RealMoney.com, offers today at Yahoo Finance:
“Now is a good time to ask yourself whether things are getting more or less bullish than they were a month ago. At this point it’s obvious that things are getting incrementally better. First, traders have already priced in a higher rate environment. Second, the terror influence is losing its fear factor. Third, the key June 30 date for Iraq and the FOMC meeting are approaching quickly. Most analysts think that particular day is very important to the markets, but traders know better. They’re focused squarely on the time period leading up to the date because the markets discount major events before they happen. So we should see buying and selling activity next week based on traders’ assumptions for the rest of the summer. Students of the 1990s may recall that many rallies began just as the Fed announced rate hikes. Those booming markets illustrated the absolute dominance of certainty over speculation when it comes to fiscal policy. In other words, a timely rate hike can put the conjecture and worry behind traders so they can concentrate on something else. The “something else” in this case should be the quality of second-quarter earnings. The news on that front may be outstanding because we’ve seen few negative preannouncements, although we’re right in the middle of confession season. I think the problem is that everyone is so fixated on world events right now, they haven’t noticed that American companies are firing on all cylinders.”
How can one deduce from this writing when to buy, when to sell or how much to buy or sell? How can one measure objectively any of his statements to actually use them as part of a trading system or plan?
