There's plenty of the usual financial news to think about this morning, but let's start this market overview with something more important than money.
By Vikram Rangala
Wednesday, March 11, 2015
Google CFO Patrick Pichette, after seven years at his current, very hard job, posted on his Google+ page, "I will be retiring from Google to spend more time with my family. Yeah, I know you've heard that line before."
TIME IS MORE THAN MONEY
He tells the story of hiking last fall on Mt. Kilimanjaro, where he took in the sunrise “on top of Africa.” His wife, Tamar, asked him a question that eventually led to this day.
“Hey, why don’t we just keep on going?” she said. Africa, India, the Himalayas, Everest, Bali, the Great Barrier Reef, all of it. “Antarctica, let’s go see Antarctica,” Tamar implored.
When he told her, “I would love to..." but "there is still so much to do at Google, with my career, so many people counting on me/us,” she hit him with the kind of question that changes lives: “So when is it going to be time?"
In a time when we're still recovering from what some men on Wall Street, claiming to be doing "God's work," did to the world by choosing money over other things, it's nice to know Google has a Chief Financial Officer whose life isn't chiefly about finance. "Don't be evil," indeed.
Google co-founder and CEO Larry Page, posted it on his G+ and said, “it will warm your heart.” A gracious move for someone who just lost one of his best people.
I mention it in this market overview not just for the feel-good reason, but because I know from my own trading and what I've learned from great traders that the only way to be good with money is to know what's more valuable than money.
Money is a lot like people that way: it finds you most attractive when you aren't so needy for it.
WHAT TO FOCUS ON
As for the morning highlights, we have a mix of extremes that make it hard to know what to focus on:
- Extreme highs and lows for currencies, with the euro and dollar headed for a 1:1 parity and maybe even inversion.
- Greece's sluggishness in enacting reform is annoying many in Europe and worrying investors. Meanwhile, Greek internal politics has taken some odd turns. Greek PM Alexis Tsipras said that he is going to investigate whether Germany has fully paid its reparations for the Nazi occupation of Greece. This is both deaf to the history of German war reparations and unlikely to help the Greek economy or its relations with Germany. It's a cheap way to bring in the word "Nazi" and feed some red meat to Tsipras's supporters. It also shows an extreme loss of focus.
- Of course, the major financial news in Europe, meaning the actual flow of money, is the bond-buying by the ECB as it begins quantitative easing. The changes in the EUR/USD, yesterday's drop and today's recovery in European and other stock markets—all of these are partly reactions to the big money flow of cash and credit. Fundamental traders should view stocks and currencies in that context. Economies aren't built on stock and currency values, but on mutual trust, ie credit.
- Yesterday's large drop in the stock market has some analysts still expressing anxiety over next week's FOMC, which I've previously written is probably a done deal: a rate hike "on the table" starting next week but no hike until at least September to give Europe a chance to recover and Greece to get on track.
Stocks recovered slightly overnight, as you'd expect after what was largely an algorithm-driven short-selling spree. In other words, it was program selling largely by institutions, running the sell stops set by those who were still long.
I and other technical analysts had called support in the S&P 500 March futures at 2040-2045. The market dropped to 2041.25, did a second bounce at 2043.75, and sits at 2051.00 as of 6:15 AM Chicago time.
For technical analysts and trend-followers, the news is often noise. It is interesting and helps us understand our world. But for trading, it's often best to just draw lines on a chart and look for the long-term and short-term trends and trust them.
In fact, it's pretty much always best to do that.
In a way, it's like what Pichette did. You ignore what everyone is saying and trust what you know is always true. In trading as in life.
For a short-term, limited risk way to participate in the EUR/USD market, look at Nadex binary options. The short-term trends are often easier to trade than longer ones when the markets are choppy and volatile. Nadex also offers binaries based on the DAX, FTSE, and major US indices.
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