Today's market action started tilting the balance in favour of the bulls even though I was sounding pretty fearful myself yesterday. Whilst the world is supposed be teetering on fear of the US trade ceiling negotiations and a potential European default, prices on certain European stocks are still trading above last year's lows and bluechip retailers like AMZN are posting strong profits against the backdrop of job cut announcements just days ago from companies like GS and RIMM.
Let's look at Deutsche Bank for instance. I've mentioned DB as a good buy last year and I'm wondering if prices on DB could be taken as a measure of just how risk averse the market is rather than only looking at major currency movements. In a truly fearful environment, even the strong will get sold and DB share price appears to be holding its own. And although I almost always use forex as a key indicator in my trading, I think in this case, the BFF Forex Traders may actually cause my perception to be skewed. Of course currency markets would move whilst potential defaults are the centre of attention. When else would they move? So if I look only at the currency markets as the sole market driver now, my trading decisions will be similarly biased.
There are a few different ideas I'm playing with, but most of them have to do with going long. Would that surprise anyone?
I'm going to think about this a little more, but the most unlikely thing occurred with my SBA today with a boost from a penny stock of all investments:
+1.23% SBA
-0.57% Roth IRA
-0.73% DJIA
-0.10% Nasdaq
-0.41% S&P
+0.47% Nikkei
Notice Nikkei was up today and has been floating above 10,000 for a few days now, which makes me think out loud: are my NMR and MFG buys from the Japanese Earthquake era finally going to get a day in the sun?
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