Most people talk about the economy like it’s something that exists separately from them. Like it’s a hot-air balloon floating up in the sky. That’s us, here on earth, feet on the ground, and there’s the economy – up there, see it?
Economy expands, economy contracts; economy enjoys cheap labor and dislikes high interest rates. And lately, “Economy is not responding to the Fed’s economic stimulus.”
But just what IS economy?
Economy is people. Us – you, me and that guy over there. “Economy” is all of us getting up in the morning and going to work. Without us, there is no economy. If we feel like working, and earning, and borrowing, and spending, the economy hums along and maybe even grows a little. If we don’t feel like doing any of those things, the economy stalls.
Same goes for “the markets:” They are also made of people – traders and investors.
That’s what came to mind this morning as I was sipping my coffee and watching CNBC. Right now, the people sitting around the table were saying, “markets” are not feeling like taking on any more risk.
Translation: Traders and investors are feeling scared. Have you noticed that market sell-offs are usually faster and stronger than rallies? That’s because fear is stronger than greed, markets’ other engine. And they are wondering why the Fed’s interventions are not working?
Just what, exactly, “markets” are so scared of is another subject. Fear aside, for stocks traders the question always is – are there any potential trades right now?
Of course. There are always opportunities – as long as you feel like putting money on the line. Understandably, most of those have been on the short side lately. Just today (March 13), for example, Elliott Wave International's Prime Stocks Flash service issued an update for GDX, Market Vectors Gold Miners ETF, and supplemented it with this chart (some labels have been erased for this publication):
Right now, says Prime Stocks Flash, the top Elliott wave count for GDX strongly hints that the recent price action "can be an ending diagonal." If you're familiar with Elliott, you understand exactly what this implies for the trend.
There are two other potential interpretations of the wave pattern in GDX. Read about them in detail and see all the charts online now – just look below for fast subscription steps.
(Editor's Note: Other recent Prime Stocks Flash updates include: RIG, AMAT, SSRI, GS, PRU, HPQ, DZZ, Sox Index, Retail/ANF, EEM, PAAS, Oil/Oils/OIH, NDC/DJI and GS.)