Market On Open, Thursday 1 May
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And … Boom!
by Alex King, CEO, Cestrian Capital Research, Inc
Yet another day in the lifetime telenovela of capital markets. I love capital markets. Did I say that already? Capital markets are endlessly entertaining as long as you don’t take them seriously. If you believe (as you have been taught by, you know, everyone) that capital markets are a weighing machine, a mechanism to reward the patient vs. the impatient, the knowledgeable over the ignorant, a rational way of allocating capital to the most deserving issuers, etc, then you are in for disappointment and, most likely, losses. For this is nothing more than a casino, but it is a casino with laws, customs, rules and norms. Which can be learned, rehearsed and put into practice.
Here’s a prime example. Terrible Q1 GDP print this quarter - right?
If you dug deeper into the GDP numbers, squinted, stood on your hands and sang Play Misty For Me then you could probably convince yourself that in fact the bad number was a good number and so on and so forth. Doesn’t matter. This is all that matters:
If you want to make money from markets, you have to learn how markets actually operate, not how they should operate according to Capital Markets 101 that they teach to the naiive in the hope of keeping them naiive in order to take their money for a lifetime. In our work at Cestrian we work very hard to stay focused on what is, not what should be or what may be.
On the subject of which, whether you trade ETFs or futures, our ’Trading With Van’ service continues to see a slew of profitable trading ideas whether the sun is shining, the rain is raining or the world is ending. Van provides the world’s simplest trading framework. Long the Nasdaq here; short the Nasdaq there; always be looking for profits on the long and short side and paying no heed to the outside world, since that is merely distraction. This is an all-business service. You can learn more here:
Alex King
Short- And Medium-Term Market Analysis
If you want this daily dose of pattern recognition, and you aren’t yet a subscriber of course, you can read about and choose from all the subscription services that include this note, here.
US 10-Year Yield
I think we may now see a short-term move back up in the yield prior to another drop - schematic below.
Equity Volatility
Disclosure: No position in volatility-linked securities.
Now, for our paying subscribers we move on to bonds, the S&P500, the Nasdaq, the Dow, and key sectors.