If you have noticed most of the analysts on the news media try to forecast after the event has occurred and they come up with some vague number which is hard to believe.
2. After Gold started rising every analysts started saying Gold is reaching $ 2500 -$ 5000 and some said even $10000 by 2012
The most important thing to know in this market is understanding the correlation between S&P500 and VIX. VIX has an inverse relationship to the stock market. VIX provides us with the weighted 30-day standard deviation of annual movement in the S&P 500. A reading of VIX 20 would expect a 20% move, up or down, in the next 12 months. VIX of 18 and below is very bullish sign, betwen 18-29 its range bound flat sign, while 30 and above is very bearish sign. But if the correlation between VIX and S&P500 is broken and both goes in same direction like it happened in later part of 2008 suggest warning sign and something terrible will go wrong like it happened in October 2008.
Here are some of the examples;
1. When the Oil prices was rising in September, "Goldman Sach predicted Oil will reach $ 130 in 12 month." http://www.steelguru.com/middle_east_news/Goldman_Sachs_tips_oil_to_hit_USD_130_in_12_months/225637.html
2. After Gold started rising every analysts started saying Gold is reaching $ 2500 -$ 5000 and some said even $10000 by 2012
3. After Euro started falling and all the analysts started saying, "Euro is hitting 1.20" http://blogs.wsj.com/marketbeat/2011/09/15/pimco-euro-to-1-20-in-three-to-six-months/
4. Most recently after Gold started falling, analyst started predicting "It'll go down to $1000"
If you look at this event, the analyst predict AFTER the event has occurred or its near the peak or near the bottom and soon there is reversal, look at Gold, Oil and so on. You don't have to listen such analyst who can't predict ahead of event or accurately.
The first thing you need to do while trading is keep the volume low of the news channel and don't listen to those analysts.The news channel do get the breaking news which you need to consider but apart from that ignore the analysts prediction and don't get carried away with their analysis. Wall street analyst only try to create panic and confusion.
Look at the historical chart, real news and real data. Many times headline are manipulated to make it sound better. So compare it with previous year data for better understanding. I know sometime the market is pushed higher by hedge fund manager to fool people, like recently happened after EU summit, when the stock rallied 200 point. But soon it fell almost 450 point after realising nothing was done in the EU summit.
The most important thing to know in this market is understanding the correlation between S&P500 and VIX. VIX has an inverse relationship to the stock market. VIX provides us with the weighted 30-day standard deviation of annual movement in the S&P 500. A reading of VIX 20 would expect a 20% move, up or down, in the next 12 months. VIX of 18 and below is very bullish sign, betwen 18-29 its range bound flat sign, while 30 and above is very bearish sign. But if the correlation between VIX and S&P500 is broken and both goes in same direction like it happened in later part of 2008 suggest warning sign and something terrible will go wrong like it happened in October 2008.
If you have noticed, currently VIX and S&P500 has broken the trend which suggest there is going to be very big event in coming month, sometime betwen Feb-April 2012.
Anyways, you should always trust yourself and do your homework and don't loose your hard earned money by falling in the trap of this wall street analyst. The best analysts is YOU.
This is the only site which offer you best and accurate prediction of market ahead of time.
This is the only site which offer you best and accurate prediction of market ahead of time.
No comments:
Post a Comment