Article What to do When Prices and Fundamentals Just Don?t Add Up

T2W Bot

Staff member
1,454 55
This is one of the most frustrating situations for a trader. You think you understand the economic back-drop and you have a brilliant case for why a currency or a stock should move in a particular direction and then they move exactly the opposite way. 
The summer rally is a prime example. Who would have thought that the markets would be poised to rally if Spain was to request a bailout? Now that the ECB has put in place its bond-buying OMT programme the markets have decided that a Spanish bailout is a risk positive event even though Spain has the fourth largest economy in the currency block, its growth is in free-fall and the Eurozone’s creditors have no firm grasp how large Madrid’s liabilities will be. Likewise, public policy uncertainty is close to an all-time high in the US. The fiscal cliff is fast approaching and yet the SPX 500 is at a 4-year high and the Nasdaq is close to its highest level since 2000. So what is a trader to do: do you follow the crowd or risk losing all...
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nunrgguy

Established member
656 118
All of that analysis to scalp 2 ticks over spread.
"But the funnymentals said it would tank"
If your head is a mess, let it rest.
 

NVP

Legendary member
36,782 1,882
so the fundamentals dont add up ?

1) check your analysis of the fundamentals - you may be missing something
2) check your analysis of the market - you may be missing something
3) Wait for the Catalyst that sends the market the direction of your fundamental analysis

regardless of fundamentals the market is ALWAYS right .....if they are not gelling....then walk away till they are...and always ensure your fundamental analysis is rock solid ...as most people miss important stuff..otherwise we would all be millionaires....?

N
 

carlosd

Active member
107 3
No offence but basing overall market sentiment on just 2 companies like Apple and Starbucks is probably why your fundementals dont add up.
Apple has sold off, and the market has marched higher.
Im no expert on fundamentals, but I would have thought there are far more important issues that are effecting market sentiment other then coffee and iPhones.
 

carlosd

Active member
107 3
It's a sign the big players are pulling out. Soon, they will leave you holding the baby, while they play shooting fishes in a barrel.
Granted.
I might have misunderstood the article, but 2 companies don't reflect overall market sentiment.
There are problems at Apple ranging from losing its founder, lack of products and huge competition from companies like Samsung.
Without even looking at the technicals these would be a good enough reason to get out of the stock especially coupled with the fact it was hitting its all time highs in my opinion.
I saw the date on the article its some 4-5 months old, so this is all a mute point now.
 

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