Registered User
Joined: 4/18/2005
Posts: 4,090
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I see that as good news...
Most of my holdings are up today except MVL. Dropped pretty hard.
couldn't find any negative news. Other than Nerds of Narnia beating them in the boxoffice. I think it's a lie.. narnia was corny and the effects not that great.
There is a press release that Iron man 2 is being fillmed now, Hulk is due out soon and Iron man 1 had a great box office run.... DVD sales should b e wonderful. i could be wrong but I think Hell Boy is a MVL character as well...That is coming out this year I think. Pluss the various video game projects underway.
such an exasperating drop.. hope it's just a shakeout pullback. I really don't want to give up my core position here.
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Registered User
Joined: 8/6/2007
Posts: 73
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is it good news???
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Registered User
Joined: 8/6/2007
Posts: 73
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Unemployment rate jumps to 5.5 percent in May
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Registered User
Joined: 9/25/2007
Posts: 1,506
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The unemployment rate surges - highest in 22 years - usually a leading indicator of hard times ahead ...
Wholseale Inventories rise much more than expected --- this means that companies are still making product --- but they aren't selling it ... a sign of more layoffs ahead ...
Crude Oil jumps $12/bbl in 2 days ... up near it's all time highs ... possibly indicating that the inflation we have seen is likely to be persistent ...
What was the good news ?
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Actually, an unemployment surge of this rate may signal hard times ahead for the economy, but not for the market. The sentiment resources I use indicate that, in the last 58 years there were 20 surges this high in unemployment. These surges created a very positive environment for buying stocks. If the market is the S&P500 then going forward, on average:
1 month later +2.5%
3 Months later + 6.5%
12 months later +24%
I'm contrarian by nature and always trade the news in the opposite direction and it's worked out well in this crazy market. Here's to continuing to profit from panic.
As to those poor folks who actually are unemplyed, my sympathies go out to them.
David John Hall
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Registered User
Joined: 9/25/2007
Posts: 1,506
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QUOTE (davidjohnhall) The sentiment resources I use indicate that, in the last 58 years there were 20 surges this high in unemployment. These surges created a very positive environment for buying stocks. David John Hall
It's not just the past 58 years ...
Between the Fall of 1929 ... and the Summer of 1932 ... unemployment surged all the way to 23.5% ...
And created one of the most "positive enviroments" in history for buying stocks ...
I guess it's all relative ... eh ?
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Registered User
Joined: 4/18/2005
Posts: 4,090
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Though I look like an ass hole today! MVl got hit.. my darling position in STLD got hit AFTER buying the breakout this AM.. had the fleeting thought of taking it.. but figured I need to be consistant with my trading rule.. so I bought more. Unfortunately the base position and the pyramid wee the same size.. so I ended with a $14 loss there NOT the >$300 gain I had at 9:30 MVL.. while no pyramiding was going on took back all my gains as in an up trend I wanted to give it a bit more space. Ended that with a $40 gain. Then getting cooked in almost all my other positions PLUSS got bought on ELOS, PRAA, LL and RDC
My only short HOLX is now breaking eaven. Phew that is a reliefe.. all I need is a loss there to.
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Registered User
Joined: 6/6/2005
Posts: 1,157
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But you said "usually a leading indicator". 1929-1932 is once. As my edge is based on probabilities and not certainties, all I can do is trade the highest edge. The highest edge (from my data -- even if i were to include 1929-32) is that when unemplyment surges, over the next 1 month, 3 months and 1 year, the market tends to be positive.
That's not written in stone. Just what I'm looking at.
If you go short, when the market turns you'll get out with a small loss. If I go long and the market continues down I'll get out with a small loss. If you go short and the market continues down you will make money. I can either reverse my position and get on board or I can reveiw my original reason for looking long and see where I went wrong. If the market turns and my long position is profitable, you can do the same. So one of us is guaranteed a small loss, and one of us may get a big gain.
No doubt you know this. but some of the newer traders might get something out of the process.
Either way, it pays to be calm when everyone else is panicing. By remaining calm I can remain flexible. By looking at the data and letting it give me ideas I can stave off emotional reactions.
David John Hall
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Registered User
Joined: 9/25/2007
Posts: 1,506
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We're on the page here David ...
All fear is of the unknown ... so knowing what to expect, regardless of how you develop that information, is crucial to success ....
In that regard ... I found Sir Risk Controller's contribution to last evening's Worden Report quite meaningful ...
But ... when you quantify unemployment surges of the past ... from what point to take your starting data ? From the beginning of the surge ? Or it's peak ?
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Hi realitycheck,
It's a high relative surge for the month compared to prior months. So it's a month by month, average increase vs. abnormal increase which this month certainly was. The orignial study was not compiled by me but i am in the process of confirming it. If the charts are not copyrighted I will post them here.
David John Hall
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Registered User
Joined: 9/25/2007
Posts: 1,506
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Here's some info that you may find helpful David ...
Unfortunately ... the data only goes back to 1948 ...
dubya dubya dubya dot economagic.com/em-cgi/charter.exe/fedstl/unrate
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Registered User
Joined: 6/6/2005
Posts: 1,157
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Thanks Reality! That site looks great. I love looking at this type of data.
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Registered User
Joined: 9/25/2007
Posts: 1,506
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When you mentioned looking at the u/e rate from the standpoint of rate of change ...
I thought about the "transformations" that were offered as charting options on that site ...
You'll notice that transformations are offered on a periodic by periodic basis ... for both numerical and percentage change ... as well as a host of other options ...
And you can also overlay recessionary periods ...
I could spend hours just tinkering with all of the options ...
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Registered User
Joined: 4/18/2005
Posts: 4,090
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The reason I see it as good news is simple if you think about it. A high employment rate means the ballance of power is in favor of the employee. Employers have a narrower pool of skilled labor to choose from, must offer more benefits and probably higher wages for the same level of work. That pool grows and the laws of supply and demand allow them to trim back on the goodies some, saving money and probably requireing MORE work for the same expense. Bottomline improves. Stock price improves.
I could be way off base here.. but I know that most negative news seems to be possitively absorbed by the market. particularily things like layoffs.
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Registered User
Joined: 1/28/2005
Posts: 6,049
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"Employers have a narrower pool of skilled labor to choose from, must offer more benefits and probably higher wages for the same level of work."
--------------------------------------------------------------------------------------------
I think you are missing the demand side of the equation.
Lets say I have 10 employees at 50K per year. (500K)
The company sells 580K of product. I pocket 80K for
my troubles. (this assumes no other costs)
Next year because of a slow down the company is on
track to sell 400K. Obviously to maintain profit I must
cut costs somewhere. If I cant find it thru other means it will
be thru labor.
If a job market is tight or loose. I still need a reason to
hire someone.
Thanks
diceman
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Registered User
Joined: 4/18/2005
Posts: 4,090
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that is probably true also.
I'm happy to anounce that I haven't got an Fing clue but the reasons I stated above made sense to me.
This fall i'll be gettig back into college.. and changign my major from Biology to Economics. Actually an advisor suggested that I'd really like "Econometrics" still need to google that. We were both drinknig at a faculty picknic and I didn't wanna seem stupid so I acted like I knew what it was.
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Registered User
Joined: 9/25/2007
Posts: 1,506
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Scott ...
Basically it is qualifying and quantifying economic theories with statistical data ... and probabilities ...
I'm not sure that davidjohnhall couldn't teach the course ...
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