Yet another meaningless Monday erased from history.
After all of yesterday's excitement, the Futures have taken us right back to where we finished on Friday, 2,832 on the S&P 500 and 25,300 on the Dow – as if yesterday never happened. I'm not sure it will last as Europe is flat, not up and China was down yet again this morning so there's nothing really to get too excited about and 25,300 is a good shorting line on the Dow Futures (/YM) with tight stops above – if you feel like playing.
Wow, Oil etc went down hard and fast, good chance to get back in for the bounce off $66 on /CL and $1.99 on /RB (tight stops below).
I know, so complicated, right? How will you ever learn the jargon? Well, I would think our results would motivated you as those Gasoline contracts made a quick $1,000 each at $2.02 (and back to $2.05 this morning for another $1,260 per contract since) while Oil Futures (/CL) blasted back over $68 for a $2,000 per contract gain ($67.50 in yesterday's close was $1,500 per contract – also very nice!
Futures trading is the only kind of day trading I like to do as it's a nice quick way to take advantage of market stupidity without incurring a lot of trading fees and, more importantly, without consuming your attention. As Fundamental Investors, we KNEW $2 was too low for /RB (that did not stop it from hitting $1.98, of course) and we KNEW $66 was too low for oil with 2 weeks until a holiday weekend so it made good sense to take a chance at those levels and notice we waited until AFTER it bottomed – you don't get rich trying to call exact bottoms or tops in the Futures!
As I was saying in last week's webinar, trading is not hard if you simply learn to be patient enough to wait for the right opportunities. One of the biggest problems day-traders have is they sit down TO TRADE at a certain time and, if they don't see a fantastic trade set-up, they tend to settle on a so-so trade set-up, just because they don't want to "waste" their session. That would be like a fisherman brining home old shoes and rocks – because the fish weren't biting. You can improve your trading percentages dramatically by simply learning NOT TO TRADE more often than you do.
Turkey is still having a crisis and Turkey is a LOT bigger than Greece, with an $850Bn GDP vs. Greece's $160Bn when they collapsed and Greece almost took the whole EU with it so forgive European investors for being A LOT more cautious than US investors are being. And why not, we're also ingnoring Argentina ($550Bn GDP) who are now paying a 45% (not a typo) prime rate to anyone foolish enough to lend them money.
Despite what seems to be a tightening move from 40% yesterday, the Peso still fell another 3.5% this morning. Inflation in Argentina is "just" 22% so far this year, not even what this country calls a lot – as they have suffered two rounds of extreme hyperinflation in the past and, so far, their currency still has the same number of zeroes on it as it did before.
Oddly enough, as of last month, the people of Argentina think their country is only 4% more screwed up than US citizens feel about their own Nation and Germany, the UK, France, Spain and even Sweden in Europe think their countries are more of a disaster than the people of Argentina do. Chinese people are the happiest, with 91% of the population thinking their Government has things going in the right direction – even Russians are happier with their leaderhship than Americans are with theirs which is ironic – as it's the same guy!
Oh, and speaking of disastrous leaders who make poor decisions – guess what Argentina does that other contries don't do (or weren't doing until recently)? That's right, they have/had the highest tariff rates in the World and it was destroying their economy so their idiot President doubled down and put on MORE TARIFFS and the economy collapsed – can you believe the stupidity?
Maybe our own countries 25% tariffs will be good for Argentina, who become cheaper by comparison – as does any other nation not run by a psychopath…