≈ Try to set the night on fire. ≈
Fire and wind. Fundamentals and opportunities.
Wind feeds the fire but also puts it out. The difference between medicine and poison is the dosage.
The balance between fundamentals and opportunities drives the market. Market participants are constantly trading this dichotomy back and forth, left and right.
Investors buy good fundamentals and traders want opportunities. In a dialectical conversation, one feeds the other.
If opportunities take over for too long, fundamentals die. Without good fundamentals, opportunities are not sustainable.
In the long run, fundamentals should prevail: robust economy, sound inflation policies, healthy employment numbers, debt under control. The problem with this flat and calm surface is that it gives a false sense of security, hiding risks, leveraging egos and positions. The lack of noise leads to a comatose state.
In the short-term, opportunities reign. They are our everyday noise, providing a trend for swing and day traders and volatility for the Theta Lovers. We need the Elons and Trumps for Twitter, Theresa May & the Brexit Stooges, Kim Jong Un & His Little Friends, China & The Black Box. However, if they blow too hard and prevail in the long run, fundamentals collapse. Opportunities killing fundamentals.
Is there a way to profit from both situations? How to kill these two birds with one stone?
It is simple: Portfolio Design. Balance your account between wind and fire. Go long fundamentals until they change and trade the noise until it’s silent again.
You know that I would be a liar
If I was to say to you
Girl, we couldn’t get much higher
Chart of the Day
What’s the big deal with an inverted yield curve?
“When I was starting out on the trading floor decades ago, the older traders used to use an expression regarding yield curve inversions. They would say: yield curve inversions in the US bond market have predicted ten of the last five recessions. This expression meant that not all inversions led to recessions.”
This is an excerpt from the latest Forex Report, written by Coach Keith “The Don” King. If you are already a #TeamTackle member, you can access the report HERE. If not, sign up for a 15-day free trial HERE and gain instant access to the famous weekly Scouting Reports.
Video of the day
Why You Should Adjust Your Market Bias
Matt and Tim discuss their market bias and waiting for confirmation before they would adjust.
Today’s line up
Traders Lounge 11PM EST
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Halftime Report 12:30PM EST
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Market Recap
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
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