The Coming Crash in the Bond Market

It is my contention that the 70-year debt supercycle has come to an end.

To put the current financial situation in perspective, here's a long-term history of the debt-to-GDP ratio, which reached a record high at the beginning of the current crisis. It was a dramatic change in 2009, unlike anything since the aftermath of the Great Depression. Continue reading "The Coming Crash in the Bond Market"

Cash is King

Please welcome Paul Judd to the Trader's Blog stage where he will present to you a very interesting trick...BONDS ARE GOOD! Paul should know as he's dedicated the last 14 years to treasury bonds where he's learned the in's and out's that we should all take a look at! So please read the article below, visit Paul's Blog here, and let the comments fly!

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I can take a position in the bond market prior to the release of an economic report. Once the report is released, I can close out my position and take profits. Cash is King!

Not so if you are a long-term investor in stocks.

A popular slogan used by many “salespeople” on Wall Street is to buy and hold for the long term. However, not only is your money tied up for years but also holding for the long term doesn’t necessarily mean you will make a profit.

For instance, if you had invested in the stock market in 1962 and held until 1982, you would have lost money.

The following are comparisons as to why trading bonds can be better than buying stocks:

Continue reading "Cash is King"

"Saturday Seminars" - Trading on Expectations: Pinpointing Trading Ranges, Trends & Reversals

One of the most important factors affecting the market’s supply-and-demand equation (i.e., selling and buying transactions in the market) is the expectations of the participants — expectations about where prices are headed, fundamental reports and the market’s response to news releases.

The Federal Reserve Board recently adopted an expectations model of the markets for economic forecasting, and now you can apply the same approach to your trading. In testimony before the Senate Banking Committee in 1997, Federal Reserve Chairman Alan Greenspan described the expectations model this way: “Participants in the financial markets are susceptible to waves of optimism. Excessive optimism sows the seed of its own reversal. When unwarranted expectations are ultimately not realized, the unwinding of these excesses can act to amplify a downturn, much the way they can amplify the upswing.” This session teaches you how to identify and take advantage of these waves (trends) of optimism and pessimism and their reversals. You will also learn how Brendan combines elements of the economic science used in the Chicago Board of Trade’s Market Profile and the Nobel Prize-winning theories of expectations (as expressed in sentiment surveys) to develop a method for analyzing and trading the futures markets.

Brendan Moynihan, a foreign exchange trader at First American National Bank (now AmSouth) in Nashville, Tennessee. During his ten-year career in the investment business, he has been a bond market and currency market analyst, a commodity trader and a cash government bond trader. He has also been a hedging and trading consultant for banks and brokerage firms.

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