Putting my original belief aside {regardless of debt ceiling negotiation crap} that market will crash sooner than later because of fundamentals, I believe this scenario is rigged. Market is going down 50 points because there is no deal so it can go up 400 points if there is a deal. By the way we have learned to dramatize everything in US. In the movies bombs are detonated in the last second. The results of basketball games are known in the 7th game. Congress will also come with a deal in 7 minutes before default so we can all thank their hard work and wisdom
Dunno, but 55 points in the last 3 trading days on the S+P over nothing but rumors is quite hilarious to me!
OK, so this is a sincere and genuine question. Do you actually trade this way? I mean do you come up with theories and say, I think this is going to happen so I'm going to get short or are you just making conversation. I wish all ET'ers when they start these type of threads would say if they are making conversation and want to chit chat or do you actually put on short or long term trades based on this stuff. If anyone is trading off this stuff, I would really love to hear how they do it. Because without some kind of quantitative framework, I just don't see how that is sustainable. But I'm willing to listen.
People are conditioned to expect patterns to repeat. We have a pattern of this type of political staredown causing market breaks, followed by rallies when there is inevitalby a solution. In a way, the more dire the crisis, the better because it will cause a bigger break and some sort of resolution is essential and therefore predictable. The smart money seems to be betting that a resolution of at least the debt ceiling occurs in the next couple of days. A wild card is the emergence of a sizeable group of sceptics, who think Obama and Jack Lew are lying about default.
Sincere answer. Yes i do. That may or may not be the reason i am a failed trader". Now, understand, i am not a trader and do invest in 401k's at work, but....... I do put a ton of time into a wide range of issues regarding the economy, currencies, commodities, stocks and a fair ammount of time into system testing. I have general strategies and methods that if followed do fairly well in bullish conditions for the given product or market. I do try to figure out what the market will do and base buy and sell decisions on that. Possily the only soluion to this for me is to STOP everything else except swing trading two mechanical systems i have on the sp500 universe of stocks and dealing with the results.But i have been here and like a bug to a light...... No response at all from anyone required. Coming clean and losing some ego here. It is my opinion that 90% of short term trading amateurs fill these forums, and, i have no doubt that guys like Cutten etc... can trade off of information, maybe longer term, and make money. Of course i know Maverick is the real deal. Anyway you asked.
You gave a great answer and I appreciate that. I wasn't trying to berate anyone, just something I was curious about. I have my opinions on this of course but I wanted to hear other people's thoughts about it. Only because you see so many of these type of threads. I respect the fact that some people only come to this forum to shoot the shit and chat about hypotheticals. But making money from it is an entirely different animal.
Interesting point. I would not exactly describe my trading as being that way, because almost all of it is quantitatively driven, but I do put on trades based on stuff like this. Like the market went down over Syria, I thought rubbish and bought calls. There have been a few such, including single names earnings where my understanding of what was happening in the sector pointed to a different outcome from the consensus estimates, so I put on the contrarian play even when price was moving in the 'expected' direction. I don't bet the farm on these plays, but I must say the return is pretty good so if I spot the opportunity, I'll put on the trade. In the current situation, I don't have a view one way or the other. The market just seems to want to go up, so if good news comes an initial selloff on the news would not surprise me, but then expect it to go up again.