[chasleo]

David - as you know, sometimes the market exhibits very unusual behavior.

For example, Israel recently directed war tests against Iran and the crude oil market did an abrupt turnaround in one day - rocketing the prices of crude back upwards from the previous days low.

Most logical people would assume upon hearing this news that in reality, this was only a 'test' and probably has no 'real' implications. However, the market moved in a nanosecond at this announcement.

Anyways - that's neither here nor now - but just used as an example.

Today, June 22, 2008 - OPEC and Saudi Arabia had a meeting regarding the increase of oil production. Their answer to increased prices was that the problem didn't lie in their hands, but mostly upon speculators and taxes. The agreed to a slight increase in oil production.

How am I supposed to take the news come tomorrow? Will oil prices continue to increase as investors 'shrug off' this release as inconsequential or will the market turn slightly around based upon this news?

[David Waring]

Hi Chasleo,

These are both good observations that are definitely worth a discussion.

As far as Israel carrying out a test of bombing Iran I think that many both in and out of the market feel that this is a precursor to an actual military strike. As Israel has made similar strikes in the past I think most also feel that they are most likely not bluffing here and that if Iran does not halt what Israel considers to be activity aimed at building a nuclear bomb, then they will bomb those facilities.
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When you combine the seriousness of this with the fact that the oil markets are already on edge over pretty much everything and you can see why oil would move on an announcement such as this.

The think that I feel it is important to remember about the markets is that the markets anticipate news so generally if the outcome of a particular event is as the market was expecting it to be then the market will not move. If however the outcome of a particular event is different than was expected and the market considers that even important, then the market will generally move as a result.

From what I have seen so far the only real difference that came out of this meeting that the market was not already expecting was that the Saudi's said that they may increase production over and above the extra 200,000 barrels per day that the market was already expecting.

So, theoretically you could see the market sell off as a result of this but in my opinion this was not a major deviation from what the market was expecting so the market may not move at all as a result of that.

Hope that helps. Please feel free to post any other questions or comments.

Best Regards,
Dave

[chasleo]

Well, I also assume that the US is in no position to really be backing any other country further in wars with the economy not doing so hot - although you never know what our president will do when push comes to shove.

So you're speculating (no pun intended lol) that it may make some headway but probably not make any major difference in the long run. That's sort of what I was thinking but I honestly don't know what to think anymore as the market makes some unexpected turns.

I suppose that interpreting the news is something that comes easier over time with you as you've done this for so many years. Your experience must really help out.

As a day trader, have you found the market to much more difficult lately or do you also (as I do) find yourself trading mostly in the current positive industries? Have you abandoned this altogether and moved towards currencies? Does all this even matter to you much as you probably can swap quickly from long to short when the market's trending?

[David Waring]

Originally Posted by chasleo

Well, I also assume that the US is in no position to really be backing any other country further in wars with the economy not doing so hot - although you never know what our president will do when push comes to shove.

So you're speculating (no pun intended lol) that it may make some headway but probably not make any major difference in the long run. That's sort of what I was thinking but I honestly don't know what to think anymore as the market makes some unexpected turns.

I suppose that interpreting the news is something that comes easier over time with you as you've done this for so many years. Your experience must really help out.

As a day trader, have you found the market to much more difficult lately or do you also (as I do) find yourself trading mostly in the current positive industries? Have you abandoned this altogether and moved towards currencies? Does all this even matter to you much as you probably can swap quickly from long to short when the market's trending?

Yes I would say that interpreting the news as with anything becomes easier over time.

I am more of a swing trader than a day trader and in general I tend to stay away from individual stocks and focus more on currencies, indicies (particularly the S&P), oil, metals and things such as this.

As you have seen there have been lots of interesting moves in all of these markets lately so I find that the increased volatility makes things easier not harder for me personally.

Best Regards,
Dave

[chasleo]

Ah okay - I noted you had several videos on Youtube regarding Forex, currencies, and also that your charting often reflected monthly values versus intraday.

Forex has gotten my interest because I noted that the individuals who have made the most recently on CNBCs Million Dollar Portfolio Challenge were trading currencies.

I have no clue how to do this, but I would be very interested in learning step by step and if it's possible to start with an Ameritrade account.

[David Waring]

It sounds like you have seen a few of my forex trading videos which I post on Youtube but not the whole forex trading course which is here.

That course was designed to walk people who are new to the market through the process of getting up and running so I think that may be what you are looking for.

Best Regards,
Dave

[chasleo]

Brilliant. I'll check it out in a little bit - I'm still on video 47 of your Youtube series going down them one video at a time...