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Staying In Touch With the Market
A lawyer once told me that laws can be viewed as "living breathing" things. Meaning that how lawyers and judges interpret them is an ever changing process...a dynamic process. The same can be said about the market and the economy for that matter.
Markets are never static. They are always shifting, constantly reallocating wealth. Rigid systems of investing can work for short periods of time in an “agreeable” market, but long-term success depends on recognizing that the market is ever-changing.
The problem is, most investors fail to recognize this fundamental truth.
What most investors have in common is compulsive short-sightedness… a hyper-focus on one particular asset or equity type… and, later, a near missionary zeal in prophesying their view of a second coming for their favorite asset class.
This, my friend, is the death of profitable investing.
Because while they remain focused on one particular asset class, life (and profits!) passes them by. Here's what I mean.
A colleague of mine, a well-known bear market analyst, makes most of his money when the market is doing poorly. But in a bull market, his system falls apart.
In fact, at one point in time, he was down 42% – making his the worst-performing financial advisory of the more than 160 financial newsletters rated by Hulbert Financial Digest! All because he failed to change how he approached making money...and failed to see early on that the market itself was shifting direction.
It's All In the Movement of the Money Supply
These shifts aren't always easy to detect. Sometimes they are subtle movements...while at other times, they are as easy to spot as an elephant walking down a city sidewalk.
So that you fully understand what I'm talking about, let me demonstrate it this example. During the market recovery that took place in the second half of 2003, the dollar amount of Federal Reserve repurchase agreements declined considerably.
Why is this important? Because there is a strong correlation between repurchase activity and the 2003 rally in stocks.
To reach its monetary policy objectives, the Federal Reserve will frequently purchase – or sell – securities on the open market.
For instance, to temporarily expand the money supply, the Fed arranges to buy securities from non-bank dealers.
When the Fed pays for these securities, the dealers deposit the money in their commercial bank accounts, thereby adding to the reserves.
In return, the dealers have to sign a repurchase agreement that commits them to buying back the securities within a specified time.
In the second week of August 2003, the Fed’s repurchase activity totaled $48 billion. A week later, the total was $35.25 billion. Go to Big Charts and take a look at the NASDAQ for the same period. What you'll notice is a 100-point rally in the NASDAQ. What this really tells us is that for a mere $83 billion, you can create a 100-point rally in the NASDAQ.
Notice the rally comes from a shifting of money supply. How long could the Fed continue to feed the stock market’s addiction to liquidity by purchasing securities so dealers who have money to put in their commercial accounts and into the banking system?
Well, in late November and early December 2003, the DOW and the NASDAQ reaped what the Fed had sowed… the NASDAQ briefly blipped above 2,000, and the Dow traded at above 10,000 for a week.
Do you see what's happening here? Through it's repurchase agreements, the Fed actually contributed to the rise in both the DOW and the NASDAQ. Had you uncovered this piece of information early on, you could have made a ton of money.
An Early Alert System
Here's the thing, spotting these movements takes a considerable amount of time, effort and research. You can do that work yourself, or you can take advantage of that very work being done by an experienced team of analysts and researchers. In this case, I'm talking about the Taipan Financial News' group of market experts.
And you can find out what's happening in the market on a regular basis by signing up for any one of our free daily e-letters and daily e-alerts. As a reader of our daily e-letters and alerts, whenever a change in the market is about to happen, you'll hear about it...and probably in advance of everyone else.
In other words, you'll never be out of touch with the movements of the money...and ultimately the movements of the market.
In fact, our alerts will put you one step closer to being "in the money."
That's because our team of analysts have each developed their own set of proprietary indicators that clue them in to shifting money patterns. With more than half a dozen proven systems based on recognizing the market is a dynamic, changing entity, we aim to put readers in a position to profits.
Each e-letter or alert takes no more than about five minutes to read. They're concise, to the point and packed with useful information. What's more, you can choose from a variety of e-letters including:
- Taipan Financial News' Dynamic Market Alert: is the radical free financial investment advisory that anticipates the real forces behind the stock market movements. Written by J. Christoph Amberger, Founder and President of TaipanFinancialNews.com, this innovative e-service can help you interpret the stock market indicators, so you profit from that ever-changing market long before the investing herd does.
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- Taipan Financial News' American Capitalist: As profit opportunities can come from all different directions, the American Capitalist includes every kind of expert imaginable. By reading American Capitalist, you're plugged into opportunities in the technology boom and the digital revolution...in emerging markets...in gold and commodities...in small-cap companies about to take off. This free e-newsletter gives readers the straight dirt on the news you don't hear in the mainstream media, teaching you how to profit from it before it hits the wires. Our diverse group of stock experts scour the globe to bring our readers exclusive financial information before the opportunities happen...even giving profitable stock picks absolutely free.
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- Taipan Financial News' WaveStrength Market Report: isolates powerful investing and trading opportunities in individual stocks, exchange traded funds and broad market indices using a unique set of indicators, including Japanese and Western technical formations, Trendline Historical Data and Oscillating Signals.
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- Taipan Financial News' Fear and Greed: Have you ever wondered why the market suddenly dropped and you lost thousands of dollars? Better yet, have you wondered how you could have prevented losing years worth of savings? We're willing to bet you have. Taipan's Fear and Greed e-newsletter covers topics like these and more. You'll receive insight and market commentary on how you could be making money off of the latest trends and news headlines. You’ll learn exactly what is going on with the market and where the next potential huge profit-makers will come from. Taipan's Fear and Greed e-news signup.
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