The Market Coalition

The stock market is driven solely by human emotion. Nothing else really matters. Human emotion is driven by perception, and perception is jaded by expectations. If your expectations are not met, than your perception is that this is bad. So if your expectations are high, chances are you will be disappointed. The trick then is to gauge the expectations that stock traders have at any given moment. Unfortunately there is no reliable measurement that I know of to gauge expectations.

Much of any days movement can be attributed to the daily news. And most of the time it can be narrowed down to the day’s economic news. There are of course non-economic events that shape the trader’s expectations. Politics, war, disasters, etc., but barring any unusual activity in these areas, the economic news is the driving force of most trading day’s activity. The notable exception is during ‘earnings season’, but we will be writing a whole article covering this at a later date. Suffice it to say however, earnings are the epitome of our theme presented here. Traders usually have scenarios in their heads, expectations if you will. They expect inflation to fall or rise, interest rates therefore will either fall or rise in lock step fashion with inflation. Indicators are used to predict inflation such as productivity, employment, consumer sentiment etc. And traders, have expectations of all these figures as the month goes on. They use their expectations to gauge whether these numbers come in as good news or bad news. In high inflationary times, a report on higher unemployment actually becomes a positive. Because higher unemployment means consumers have less money, thereby inflationary pressures will ease. But if the economy is perceived to be in a recession, than a report on higher unemployment is seen as negative, because we are not likely to pull ourselves out without people working.

And then to add to the confusion there are times when the numbers come in better than expected and the market still tanks. What gives to all of this confusing melting pot of expectations, perceptions and emotions? Well, one thing I can tell you, don’t read too much into the standard market reports given at the end of the trading day. They are valuable in that they are nothing more than a report driven by the same emotions that drive the market. However, their downfall is that they fail to recognize this. Daily reports report the exact condition of the human psyche, without ever recognizing that the psyche is the market. They can’t separate the two, and therefore their weakness is, that the psyche is an ever changing environment, and rarely stays the same two days in a row. Unless there is that rare and exceptional event that the whole world is focusing on. Sometimes the market just sells off, because it is time to. Sometimes it rallies because is just time to. If our expectations are that the market will go higher, because the economic data points that way, it will. But there will come a time, when the economic data fail to, or when our rosier than rosy scenario, shows a chink somewhere in that shining armor. And viola, nobody buys that day, or two days or week. Nothing in reality has changed except our emotions.

The trick to making money off all this is, watch the expectations. Watch the perceptions, and then watch the technical factors of the market, and the industries. If there is a bull move in housing say. And the underlying factors are there for home building, i.e. low interest rates. And the industry is moving along just fine, without speculative fever. This is the time you watch it, and wait. There will be some bad news along the way. Maybe even just a pause in housing permits, maybe an uptick in interest rates, for a very silly reason. And watch the band wagon empty out. This is when you buy, not while it is falling, but when it stops falling. This is the easiest band wagon to jump on. One that is stopping at the bus stop. Don’t jump on the moving bus, wait for it to stop. Likewise that is when you jump off too, not after it has gone into reverse. But when it has stopped. The easiest part of any move, is the middle part. The beginning is hard to see, the end is full of unpredictability and wild price changes, but ahh that middle. The boring old middle, full of narrow trading days, and small incremental price jumps. Nobody prints articles about that, it isn’t sexy or romantic. It is just profitable.

The other nice thing about the middle of any move, is it is backed by solid economic data in its favor. Any time there is unfortunate reports, people jump off slowly. The uptrend stops, not reverses. Because speculation hasn’t hit yet. Expectations are not unrealistic. And it doesn’t show up in the daily reports yet. The daily reports are filled with information about sectors that are either at the bottom or the top of their speculative run. Because without recognizing it they are reporting on the sectors that have the strongest emotions. And the two strongest emotions driving the market are none other than fear and greed. And when are fear and greed are at their most prominent, at the top and the bottom.

Trade without fear and greed, and you will trade well.

Now what to do about those daily reports? How to trade off of them? You trade opposite them. Not the day they are printed. When oil or housing are booming out of control and EVERYONE is talking about it. You put large cap oil and housing stocks on your watch list and wait. A month or two or three it isn’t exact science here. Dealing with human emotions never is, just ask Freudians. But you wait, until they stop making news highs, until they start making lower highs, then you short them. Or vice versa when techs crashed. You wait, and when they stop making lower lows, you buy them. But not just any stocks, large caps, quality stocks with real value, like earnings, assets, maybe even a dividend or two. Shorting large caps makes sense too, as they are easier to borrow, and they pretty much follow the trend, in fact in many industries they are the trend.

Trade without fear and greed, and you will trade well. Think for yourself and you will trade well. I encourage you to read my daily blog at http://livingonlargecaps.blogspot.com

For real time trading following these and other common sense principles.

CT Larsen has been trading stocks since 1990. Now trading large cap stocks exclusively. He has recorded three straight years of greater than 50% annual returns. You can read his blog at http://livingonlargecaps.blogspot.com

Sarbanes Oxley Act falls under ‘Corporate and Auditing Accountability, Responsibility, and Transparency Act’ or ‘CAARTA’ act which was passed by the US Senate Banking Committee with the support of President Bush. This act was passed to strengthen corporate governance and improve investor confidence. Sarbanes Oxley Act ensured the accuracy and reliability of disclosures from the corporate world. This came into force to avoid any financial scandals from corporate giants.

Sarbanes Oxley Act is more often known as SOX or Sarbox but is actually officially termed as Public Company Accounting Reform and Investor Protection Act of 2002. It is the single most important piece of legislation that affects the corporate governance, financial disclosures and the practice of public accounting. Sarbanes Oxley Act prevents the large corporate giants to commit and financial frauds. This act also punished such corporate that showcase irregularities in their financial accountings. After the Sarbanes Oxley Act came into affect is strengthened investor confidence as this law bring the defaulters to justice and protects the interest of workers and shareholders.

According the Sarbanes Oxley Act the large companies need to meet the financial reporting and certification mandates for any year end financial statements. This act is organized into 11 titles but in actual case only subset of these titles relate to the compliance to the complete law.

Sarbanes Oxley Act established new standards for corporate boards and audit committees. This law implements criminal penalties on large corporate companies for defaulting and sets new accountability standards. Sarbanes Oxley Act gives more freedom the external auditors to set new standards of governance. This act also issues accounting standards and oversees public accounting firms.

With the increase of regulatory norms, more and more companies are coming under the scrutiny of Federal government. Those companies that specially obtain lists and store personal information come under special scrutiny of Sarbanes Oxley Act. Lately, there had been review stating that Sarbanes Oxley Act has been too stringent on the companies. The most talked about section of the Sarbanes Oxley Act is the Section 404 which seeks to enhance reliability of internals controls over financial reporting. These tightened internal control implemented as a result of Sarbanes Oxley Act has lead strains on companies as well as the accounting firms.

A proper regulatory framework with more stringent rules and a company with proper internal regulatory body delivers the most accurate and transparent financial reporting. This law is administered by Securities and Exchange Commission. This body sets rules and deadlines for the compliance and published rules on the requirements.

The three rules of Sarbanes Oxley Act regulate the management of electronic records. The first rule refers to the falsification, destruction and alteration of records. The second rule states the retention of records by any company so as to how long the records should be stored. The third rule refers to the type of business records that need to be stored.

A total comprehensive study of the Sarbanes Oxley Act and its implementation by the corporate bodies deliver the most transparent and factual financial records for the company.

Earl Powers, US Lawyer and Sarbanes Oxley Compliance expert - focusing on Sarbanes Oxley Bill and Sarbanes Oxley

What Does Surf For Money Really Mean?

If you’ve been in any internet circles within the last eight years you’ve probably been approached by an eager “surfer” wanting you to register for a surf for money or surf for cash program. What exactly are those and are they profitable? Let’s see.

Basically surf for money programs are advertising programs that allow their members to participate. The member makes money by watching the advertisements in a surf rotation, and makes a commission from doing so.

In most of these programs, the member also makes an income from telling others about it, and they then can sign up, using the member’s referral link.

Do members have to actually open the advertised sites, or just watch them appear?

In some current surf for money programs, the advertised sites do not necessarily have to be viewed, however the catch is there are oftentimes sites of interest that may not be a nuisance to learn from - or be entertained by.

With more advanced scripting in use, viewers are given the option of opening any site of interest in another window while not losing their place in the site rotation so the quota for the day can be reached.

Auto-surf is a new option in some control panel menus that allow the member to “visit” websites with a new site automatically loading every 20 seconds. No clicking involved.

After the member has finished surfing, the member’s page is refreshed manually and credit is placed on his/her account. Depending on the level of investment, more or less sites must be surfed involving more or less time of the member.

Reputable surf for money or surf for cash programs disallow pornographic sites or those utilizing pop-ups or abusive language.

How is the Surf For Money Member Paid?

Often these programs use third-party gateway payment systems such as Paypal and still others use an in-house payment processor.

Additional Surf for Money Concepts

Members who have their own commercial interests to promote can also accrue advertising “credits” towards free “hits” for other surfers in the same program to visit. This allows people to
advertise their sites to an audience of potential customers for
free or at a low cost. When a site is listed, it can be placed
into a rotation system. There’s also the option to buy more credits and banner ads.

But Are Surf For Cash Programs For You?

It can’t be denied that anything associated with referral marketing has been given a bad name because of greedy administrators and even greedier users who try to spam the system in one’s favor. In fact, one popular surf for money program has been in internet news for failure to process pay-outs. (Sorry, it can’t be listed for legal reasons).

However, the concept of surf for money is solid and when properly employed can earn a member a few coins. Especially if the integrity of the company is sound - but remember that principle applies to any business venture.

The popularity and feedback from enthusiastic users of surf for money programs attests to its potential and has helped more than some meet their advertising goals. And reputable surf for cash companies allow a money back guarantee. The Terms and Conditions are to protect both parties and to ensure everyone knows what their obligations are.

So there you have it! If there’s no investment and the risk is low, perhaps surf for money is for you.

About the Author

Reggie Andersen is a prolific writer, author and speaker. She makes it easy to create a prosperous lifestyle, quickly & easily. Learn some of the methods she’s used for years by signing up at Surfing For Money