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The DOW Takes Another Beating

After last week’s 512 point loss on Thursday, it was able to gain back 70 points on Friday. Standard and Poors released a report Friday night as to downgrading the United States credit rating from it’s traditional “AAA” rating down to “AA” rating with a negative outlook. S&P stated that they feel that the politicians in Washington DC have shown their incompetence towards working together and saving the deficit from getting worse. Over the weekend, S&P’s remarks about if the federal government doesn’t get a grip on it’s fiscal irresponsibility, they (S&P) may feel to lower the credit rating again within the next two years.

After all the weekend news and the lack of President Obama coming out to speak about the report, Wall Street and investors alike realize that the economy recovery that Obama has been talking about for the last two years is nothing but a charade. The DOW took an even bigger plunge today falling 632 points after it was all said and done. The DOW closed at 10,809, down 5.55% just for today’s trading period. Since July 21, just two weeks ago, the DOW has lost nearly 16%. A drop like this hasn’t been seen since the recession started almost three years ago. NASDAQ has lost over 6% just today alone and the S&P 500 shaved off 6.66%.

I’ve been talking about this day coming for almost a year. Yes there have been some great moves in the stock markets over that time, but unless you took all your money out of the markets two weeks ago, you lost all that was made during that time. There are many that think that they’re not involved in the stock market, but as they will find out soon enough, what happened on Wall Street these past two weeks has caused many people a major portion of their retirement fund and/or their pension. trillions of dollars of wealth have been lost in just a short period of time and with the actions of our politicians, who really knows how long this crap is going to go on. Japan went through the same thing almost twenty years ago and they’re just coming out of it now. The sad part about that is the fact that Japan is small when compared to the value and size of the United States of America.

We will have people, many of them part of the baby-boomer generation wanting to retire and not being able to cause to the damage to their retirement accounts. they will (in many cases) have to continue working a few more years to make up for the losses they’ve been dealt in these past few years. In turn it will make it harder for the younger generation to find employment, especially since the economy is so bad, that it will keep the unemployment rate somewhat in the same range it’s been in since Obama has been in office.

For those of you that are wondering what to do, if you’re young, keep doing what you’ve been doing as to putting money into your 401K and retirement funds. If you are within retirement age (15 yrs or less), I wish I had all the answers. Each person’s life is different and their needs during the later years differs from one to another. For the next two years (at least) I recommend buying into commodities. The U.S. dollar is going to continue to lose value as the Federal Reserve tries to save the economy with another round of quantitative easing (QE3). Gold and silver are the best hedge when face with these types of economic woes.

All About Global Macro Trading

The global macro trading system can work effectively for every trader. If you have an already established system that works for you, why not expand it to participate in global macro trading?


If you have already been an established day trader, have you considered gravitating into a market that has more options such as the entire planet? Similar to a doctor attempting to diagnose an ailment, you have to search and then search once again to reach the end result. At times, the doctor will prescribe medications that just don’t seem to work, and you go back to the doctor to try something different. Well, it is no different in the stock market. You may think you are on track and it fails, so you attempt something different up until you find something that works.

If you are a stock trader, you understand this methodology. You have your system tweaked to the point where you know how to check your price to earnings and then price to book. You also look at the return you will receive on your equity, right? The better the system you have built, the better protection you have in the market thus improving your risk to rewards. The stock market is not an easy business. Sometimes it becomes a matter of trial and error. Eventually, we are fortunate and then other times, we tend to lose. The more educated you are the better a risk to reward you will have.


The global macro trading market provides an edge as it is worldwide, which means you can trade any instrument using the strategy you have developed globally. That means your chances of locating the best investment are greater. This market has really made a tremendous comeback compared to the last couple of years of trading. This is because a lot of people were trading long and leveraged. The macro traders however were shorting housing and financials then going long and doing some real interesting trading in short treasuries and dabbling in the commodities market.


What this really means is the global macro trading market provides a lot of options to test a variety of strategies. So if you set up your strategies to build on a model that you wish to invest, in you could be a real winner. This is a specialized market and the person who is new to stock trading might want to educate themselves before becoming active. If you are an active day trader that utilizes the same stocks day in and day out, you might not have an interest in global macro trading. However, anyone else that wants a variety and has a need to venture into a new market with a high variety, then global macro trading might be for you.

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Difference Between Forex Day Trading And Forex Swi...

Forex Trading offers two very different kinds of trading opportunities.  One is Forex Day Trading.  The other is Forex Swing Trading.  Many people use one or the other of these.  There are a number of ways these are different from each other.  One is the time frame used.


Profit is measured in Pips.  The amount of potential profit on each of these is different.  Day Trading uses a lower time frame.  Often Day Traders use charts showing the action on 30 minutes, 15 minutes or 5 minutes.  Swing Traders usually use hour charts, 1 hour, 4 hours or 8 hours.  The market will move a larger distance in an hour than in 5 minutes, therefore Swing Traders can make more pips on their charts.
Before taking a trade, most traders will set an amount of pips they are willing to risk or lose.  Day Traders risk fewer pips than Swing Traders.  Day Traders use smaller time frames and have less profit opportunities.  However, Day Traders can make more trades than Swing Traders because of the smaller time frames.


The amount of time the trader is in a trade is different also.  Typically, 30 minutes to 4 hours is the time a Forex Day Trader is in a trade, again because of the shorter time period.  In swing trading, a trader may be in a trade from 4 hours to a day or longer. Both traders used Technical Analysis to find and leave trades.  The more information a market has, the more accurate it is.  Therefore, the results of technical analysis in Swing Trading are more reliable than the smaller time periods used by Day Traders.


Both traders have specialized indicators that offer technical information.  A favorite of Day Traders are Support levels and Resistance levels shown by Daily Pivot Points.  Each person is more comfortable using one of these methods.  Take the time to discover which one works best for you.

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What Are Bull Markets And Bear Markets?

Just in case you are new to stock market investing, there will be two terms that you will hear thrown around quite regularly.   These are “bull market’ and “bear market”. These two terms will remain in your thoughts once you have survived a day in the stock market world. These two terms are important, that is why you need to familiarize yourself with them.


Here is a brief overview of the two terms, the “bull market” and the “bear market”. Let’s start with the bull market. The bull market is when most traders feel that they have felt something positive about a certain stock market and they want to buy stocks. This will usually happen during a long bull markets period that the stock market would keep going up and up.


As for the bear market, the bear market is actually the opposite of the bull market and it is when the stock market is constantly going down no matter what a trader would do. This will usually happen during the times that a trader loses sleep and if they continually wonder whether they should be selling their stocks.


However, most of the time the market is placed somewhere in between the bull and the bear market. Normally, the better stocks would go up over time and then the stocks of the companies doing poorly would go down. It is always considered wise to always try to pick a stock of company that is doing well or will do well when the time comes.


Now that you know the difference between a bull and a bear market, what does it mean for you.  Many times an investor has no control over what is happening in the world that affects the stock market.  If the market is experience a downward turn, it is a good idea to invest in defensive stocks.  Find those stocks that experience little volatility.  Another idea, is to go the sidelines and wait it out.  The problem with this trading technique is, you may miss the rally.

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NYSE (NYSE: NYX)

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photo by k conners

The NYSE Euronext (NYSE) reported their earnings today, but didn’t live up to the street’s expectation. They post a jump 17% in the second quarter as a result of the volatile markets during the same period, excluding the merger expenses. Unfortunately 3 cents shy of the 78 cents that the analysts were looking for. When merger costs are included the net income is actually 73 cents a share.
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NYSE Euronext stated that American Stock Exchange members approved the proposed merger.The deal is planned to be finalized in the third quarter of 2008. The merger is expected to operate at a loss for the remainder of the year, but save them $100 million.
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“Beyond the cost saves, we are also committed to investing in growth, which includes broadening our product and service portfolio in both core businesses and new ventures. Our capital allocation will be appropriately balanced between investing in our future and returning capital to our shareholders, as evidenced by our $1 billion stock repurchase program,” said NYSE Euronext’s CFO, Michael Geltzeiler, in a statement.
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Earlier this year, I started investing in NYSE. After dropping over 10% since I bought into the stock, I did dumped it. I advise anyone who may be thinking of getting in to sit out until the next quarter to see how they’re performing. I expect with the condition of the markets that they will be in good shape by that point.

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