Wade Assurance
  • Home
  • Speculation
  • The Pit
  • Resources
    • Futures Contract Specs
    • Tools
    • Terminology
    • 2020 Trade Performance
    • About
  • Disclaimer
  • Subscribe

Anatomy of the Stock Market Cycle

4/26/2020

Comments

 
My wife sends me 4 leaf clover pics all the time.  She spots them from a mile away.  It takes me a while to spot a 4 leaf clover if I am looking for one though.  I have traveled in cars with hunter types of people who can spot a turkey or a coyote hundreds of yards away, yet I never noticed it.  Their eyes were trained to spot the wildlife.
Picture
Look at this ES futures chart and think about what it is you see?  it takes years of trading for your eyes to begin recognizing opportunities on a chart.  I am still learning myself and will probably keep getting better at it the rest of my life. 
Picture
Trading is never 100%, but if you do not have an expectation why would you take a trade in the first place?  Trading cycles allows you to see opportunities and to set expectations.

The easiest cycle to trade is the stock market.  Stock indices tend to continue to move higher over time.  The Fed helps prop up the market which creates a lot of stability.  Except for the occasional financial crisis or pandemic, stocks have done well over the last 80 years.  Stocks are where we need to devote most of our time and resources to really make a lot of money over time.  

Below is the same ES futures chart the way I see it today.  This diagram shows what my eyes see when I look at a chart.  This chart shows how the stock cycle was used to get us into the position where we find ourselves now and how we will use the cycles to exit and perhaps re-enter again later.  Heads up..... it could be mid summer before we buy stocks again.
Picture
Gold is about half way through an 8 year cycle.  The Bank of America estimates gold could reach 3000 over the next 18 months and I tend to agree.  A 1200 point gain on a gold futures contract would be worth $120,000.  Once the price of gold breaks above the $1923.7 all time high, gold will not have any resistance.  Once gold enters this phase I think silver will do a lot of catching up to gold.

Metals are kind of the wild west of trading but over time do have dependable cycles.  The metals sector is sometimes manipulated by bullion banks and hedge funds.  The Fed has no reason to inject money into gold since governments around the world have fiat currency and not gold backed currency any longer.  
Picture
Agriculture commodities do have cycles but they are nearly impossible to track in real time due to all the forces in play that create volatility.  Seems like there is a USDA report, or a weather report, or something going on in South America that creates unforeseen volatility.  Last weeks dive in crude oil for instance destroyed ethanol demand which directly impacts corn.  There are just too many working parts for cycles to be useful with ag commodities.​
Comments
comments powered by Disqus

    This Page

    The Speculation page is used for educational purposes and to talk about our opinion on trades and what is going on in the market.  All trade recommendations are made in "The Pit".  This is also a blog page where you can ask questions, post your thoughts, or ask for help.  Be sure to use an anonymous name. If you have any questions feel free to reach out to us via email.

    Archives

    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    December 2017
    November 2017
    October 2017

    RSS Feed

Steve Wade and Tyler Wade of Wade Assurance are associated persons for AgDairy LLC.

                           Commodity Risk Disclosure Statement

The risk of loss in trading commodity futures contracts can be substantial.  You should, therefore, carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

Wade Assurance is an equal opportunity insurance provider.
CONTACT US
Steve Wade
swade@wadeassurance.com
​
Tyler Wade
​twade@wadeassurance.com
Picture
270-234-6074
  • Home
  • Speculation
  • The Pit
  • Resources
    • Futures Contract Specs
    • Tools
    • Terminology
    • 2020 Trade Performance
    • About
  • Disclaimer
  • Subscribe