Bitcoin price today: gains to $120k, near record high on U.S. regulatory cheer
In last Monday's video I said stocks and bonds could rally starting Friday after the Facebook deal prices on Thursday night. While I expect Gold to keep rallying, US stocks are unlikely to. Why? My good friend, the late Ed Hart used to say “stocks will trade their way to perdition.” Ed Hart was the best thing on the old Financial News Network before it was assimilated by CNBC. Stocks trading their way to perdition means to me that regardless of long term reality, over the short term stocks can go counter trend, but only for a while.
Over the long term, the only reason markets can go up or down is the relationship between the total trading float of shares outstanding and the overall flow of money available to buy stocks. Nothing else. Studies have proven that earnings have never had anything to do with predicting future prices over the long term.
Short term lots of stuff can move prices for a while. Even borrowing to buy can keep a rally going, for a while anyway. However, long term it has to be about the money available.
Trading 101 says imagine if the stock market was a closed loop of shareholders with each holding say 5% cash and no money coming in or out of the loop. If someone wants to sell a stock to take money out of the loop, what happens is the seller hits the bid prevailing bid which by definition usually is below the market. Then the buyer, to maintain a 5% cash position would have to sell other shares via hitting a bid at a lower price. Prices would keep going down until someone thought that stocks are cheap and put more money into the loop. The same thing happens when more money starts flowing in, buyers have to hit the ask price and prices get marked up ever higher until the inflows stop.
The Securities Industry Association says that the stock market was created to raise money for industry. To me that is B.S. The stock market was created to allow corporate founders and entrepeneurs to cash out and grow their wealth. That is why watching what top management does both with their companies and their own shares; and money flows is what TrimTabs does every day. And that is why we have an edge.
I believe that I have been the first to offer market research and analysis based upon supply and demand of stock and money. I have successfully used that info to increase the odds of success in the trading world for my clients and myself.
How I generate a successful trading edge is to look at the actions of those who run public companies from the point of view that top management in aggregate care most about their own net worth. The company is second. When companies are buying back more shares then they sell, that means company officials believe their stock will be selling at a higher price in the future. Similarly, when companies are selling more shares than they are buying, they must think that prices will be lower in the future.
Starting this Friday after Facebook starts trading, to repeat what I said the other day, I think stocks will go up several percentage points quickly. The gain will be mainly due to the psychological relief that the forced selling to pay for Facebook is over.
But, unless companies start buying more shares then they sell, or the FED pumps another few hundred billion into the financial markets, stock prices have to trend lower longer term.
What is more, if Europe keeps on self destructing in an accelerating pace, then it is even less likely that US companies will be increasing float shrink any time soon.
Below You May Find The Video.
Over the long term, the only reason markets can go up or down is the relationship between the total trading float of shares outstanding and the overall flow of money available to buy stocks. Nothing else. Studies have proven that earnings have never had anything to do with predicting future prices over the long term.
Short term lots of stuff can move prices for a while. Even borrowing to buy can keep a rally going, for a while anyway. However, long term it has to be about the money available.
Trading 101 says imagine if the stock market was a closed loop of shareholders with each holding say 5% cash and no money coming in or out of the loop. If someone wants to sell a stock to take money out of the loop, what happens is the seller hits the bid prevailing bid which by definition usually is below the market. Then the buyer, to maintain a 5% cash position would have to sell other shares via hitting a bid at a lower price. Prices would keep going down until someone thought that stocks are cheap and put more money into the loop. The same thing happens when more money starts flowing in, buyers have to hit the ask price and prices get marked up ever higher until the inflows stop.
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The Securities Industry Association says that the stock market was created to raise money for industry. To me that is B.S. The stock market was created to allow corporate founders and entrepeneurs to cash out and grow their wealth. That is why watching what top management does both with their companies and their own shares; and money flows is what TrimTabs does every day. And that is why we have an edge.
I believe that I have been the first to offer market research and analysis based upon supply and demand of stock and money. I have successfully used that info to increase the odds of success in the trading world for my clients and myself.
How I generate a successful trading edge is to look at the actions of those who run public companies from the point of view that top management in aggregate care most about their own net worth. The company is second. When companies are buying back more shares then they sell, that means company officials believe their stock will be selling at a higher price in the future. Similarly, when companies are selling more shares than they are buying, they must think that prices will be lower in the future.
Starting this Friday after Facebook starts trading, to repeat what I said the other day, I think stocks will go up several percentage points quickly. The gain will be mainly due to the psychological relief that the forced selling to pay for Facebook is over.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads.
But, unless companies start buying more shares then they sell, or the FED pumps another few hundred billion into the financial markets, stock prices have to trend lower longer term.
What is more, if Europe keeps on self destructing in an accelerating pace, then it is even less likely that US companies will be increasing float shrink any time soon.
Below You May Find The Video.
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