In afternoon trading, the Dow is up a tenth of a percent, the NASDAQ composite index up more than half a percent, while the S&P500 index is pointing upward by 0.33 percent. Most Asian and European indexes closed up. Tokyo’s Nikkei ended the day up more than a percent, while the Hang Seng in Hong Kong moved up 0.62 percent.
In Europe, London’s FTSE100 added 0.12 percent, the CAC40 in Paris gained 0.36 percent, and the Xetra DAX in Frankfurt moved up 0.23 percent.
Some of the key items in the buiz news Tuesday: China raised its interest rates for the fourth time this year as Phils Stock World vividly explains referring to the Wall Street Journal:
“China … raised their lending rate 0.18% to 7.02% and is also increasing the 1-year rate paid on deposits to 3.6% from 3.3% effective Wednesday. I mentioned this would be inevitable… as Chinese inflation is clearly way too high and now, according to the Journal: “Accelerating inflation had fueled speculation that the PBOC would raise rates again. A surge in food prices pushed Chinese inflation in July to its fastest growth in a decade. China’s National Bureau of Statistics said its consumer-price index was up 5.6% in July from the same month last year, the highest rate of increase since 1997. Food prices were the main culprit, led by a 45.2% rise in poultry and meat prices.”
Central Banks continue to prop up the fiancial system with the Fed’s latest cash transfusion capping a total of $100 billion. There was a Federal get-to-gether in Washington with a meeting of the minds – Ben Bernanke, Henry Paulson, and Chris Dodd. Dodd’s reassurances that Bernanke is absolutely willing to use all his tools to offset market turbulence, did little although reports indicated that stocks rallied for a short while.
Phil: “Paulson is on TV NOT saying the Fed will bail out SPECULATORS (let’s start calling it like it is) who bought stock, homes and oil at the top of the market because Jim Cramer (and I now see he is being scapegoated!) told them to BUYBUYBUY.”
Bond yields are falling as investors are flocking to Treasurys in search of safe-haven investments. Some analysts are speculating a rate cut is in the making as the Fed gets uncomfortable with the state of the markets.
Here’s a test for studying random entry trading systems. See if your’s match the following criteria.
AfraidtoBlog.com: “…for the sake of simplicity, your system will be deemed better than a “random entry” trading system if the following conditions are met:
- The overall profitability and ‘expectancy’ is larger (winners larger than losers)
- The %win (or correct trade) rate is higher than the random entry system (though this is not as crucial as the first two)
- The length of a drawdown period of your system is smaller than the random system
- The severity (deepness) of a drawdown period of your system is less than the random system
- Your system takes fewer trades (less commissions) to achieve similar or better overall results”
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