The commodity markets lead the bond markets, which leads the stock market, most of the time. The commodity markets include precious metals and currencies. Also, I agree that too much has been made of the bond market. As stated above, there are intermarket influences. Also there are economic type of reports that influence the market like the CPI and PPI and unemployment stats and then there is the Fed which can have a dramatic short term influence on the markets. Greenspan burps, and so go the markets.
Then there are influences of the investor themselves on the market in terms of where they move their money to, particularily the institutional investor. Or if the individual investor is placing large amounts of money in or taking large amounts out of mutual funds, this will impact the market. Oh, we cannot forget the traders themselves which have the most dramatic day-to-day impact on the market, which includes program trading which is a form of spread arbitage to profit from the differences between the S&P Cash and the S&P Futures above what is considered "fair value".
Now isn't the stock market a very complex, but interesting place to be? I see the market as an equilizer. I have the means and as much of a chance making money in the market as the next guy. There are as many ways to profit from the stock market as there are different types of people. And I do not need to borrow lots of money to make money, an innovative product, a rich uncle, or just plain luck in being at the right place at the right time. Still, luck does help the investor.
Now what was that question?? ;)
Bob Graham |
