Daytrading to earn a living: Speculative driven greed.

FINANCIAL and economic news is surely laying a positive flavour pretty thickly of late.
Stunning corporate results from the majority of companies have sent stock markets surging in recent months.
Global equities, based on the MSCI World Index, are up 52% since their low in March on the back of a confluence of factors that also include more companies raising their earnings guidance.
The surge in global markets might have been made possible by the cheap money that is sloshing around.
With interest rates around the world on average at historical lows, risk premiums too have dropped – looking at the Chicago Board Options Exchange’s volatility index close to a year’s low.
As good as people are feeling now, they need to take a step back and examine the bubbling optimism.
The recently announced drop in the rate of unemployment in the US was due more to people dropping out of the job market than people actually getting hired.
In some industries, profit was driven up by companies cutting cost to the bone by slashing their workforce and benefiting from low raw material prices. The pick-up in production and exports is due to restocking and whether that continues beyond the replenishment of inventories and translates into medium-term demand is important in getting consumption up and running again.
In other words, the situation will take some time to return to normal.
While companies have done their best to cut the fat, it appears governments around the world are behind the curve as the worst global recession in living memory has not been a bitter enough lesson for many governments to carry out urgent regulatory reforms.
Greed and excessive speculation appear to have escaped with a slap on the wrist as they continue to fester in the world of commodity prices.
The latest example is sugar. Sugar prices have been rallying since July to hit a 28-year high on news that the monsoon has wrecked India’s production and Brazil, a leading exporter, is slow to harvest sugarcane.
If such activity is left unchecked, the multitude of problems that high commodity prices would create, as it demonstrated not too long ago, would soon return to rear its ugly head.
So while a few do benefit from high prices, especially the producers and traders of such commodities and derivatives, the man in the street would be left worst off as a result.
In fact, speculation on oil, rice and now sugar should have been evidence enough that there is no place for people sitting in plush offices to buy such products if they are not the end user of producer of such goods.
Tracking the Dow on Wednesday,12/08/09.(7 days to Dow Futures Expiry)
Nikkei Expiry:14/08/09 (2 days Left)
Asian markets index futures expiry 31/08/09.

9:30am:--A bullish spinning spike up.

The June trade deficit grew to $27.0 billion from a $26.0 billion deficit in May.

10:30am:--First hour session high with bearish spin holding.

Financials are the primary source of strength in the early going.

11:30am:--Still holding at 2nd hour hour high with intermittent bears.

Gains by stocks have leveled off so that the major indices are now moving sideways.

12:30noon:--A small bullish harami at near session high.

Stocks have drifted slowly off of session highs, but gains remain healthy.

1:30pm:--A new high with slight pullback but holding above bull pivot.
Market participants await a couple of key announcements, starting with the results from a $23 billion 10-year Treasury Note auction, which are due imminently. On the horizon is the latest FOMC announcement (2:15 PM ET).

2:30pm:--Bearish spike down on FOMC news.

The FOMC has left its target range for the fed funds rate unchanged at 0.00% to 0.25%. The Fed said the interest rate will remain exceptionally low for an extended period.

3:30pm:--A spike up o find the day's high.

A positive tone in the equity markets and a weaker dollar combined to provide support to commodities this session.

4:00pm:--Bearish engulfing.
Last minute Profit taking.

The usual 8 days before any index futures expiry will see a bullish play not necessary with economic news.