Stock-market

Avoid this book and move on, priced to high and information in this book can be found in much cheaper books on daytrading.

This book, pamphlet really, should be titled, "A very basic and general introduction to day trading," and as such, it would be fairly priced at $8.95 or $10.95. At $34.95, however, it is nigh-robbery. Do not expect to find anything in the way of tactical or strategic advice that you can use to actually evaluate potential trades. What you will find instead are all the "handle with care" warnings that form the introductions to the other by now well-known books about day trading. The latter, needless to say, offer far better value. I repsect the fellows at Pristine Trader a great deal and it was on their advice, in an amazon review!, that prompted me to get the book. I am at a loss as to what they saw in the book.

I received this book today, but will return it tomorrow.

I have yet to read the other books on this kind of trading. I heard this was the first so I figured it was the best place to start. I am amazed that I don't hear more about microtrading and the direct access kind of trading championed in this book in the press. It is pricey but I think I would recommend it nevertheless. Particularly to people who are just learning about microtrading.

This is a well-informed and very readable book on the informational value of the financial markets. However, this is not a how-to book on stock picking. What Mr Insana is concerned with in this book is not so much what price movements can tell us about an individual stock, but the macro information that the financial markets can tell us about the economy, geopolitics, major news events etc. There's almost no advice on individual stock picking based on price movements (too noisy), but there are advices on how to choose a job, time the purchase of a new home, move cash in and out of the market etc. based on the message of the markets.

In retrospect, some of the messages from the markets identified in the book are quite prescient. A good example is the rapid deterioration in the A/D line at the height of the Internet bubble. Of course that phenonmenon did not go unnoticed by the market pros. I clearly remember numerous analysts assuring viewers on CNBC that the stock market was not over-valued (and therefore in no danger of collapsing) because so many stocks were in the doldrums!

The book was filled with anecdotes about how major economic and geopolitical events (from Fed rate cuts to border wars between Egypt and Libya) are foreshadowed by unexplained market movements. Had Mr. Insana focused on the rationale behind these movements his argument would've been a lot more convincing. Instead, the book had a tendency to ascribe a sort of magical, oracular power to the market and the "smart money" that makes the market. Of course the real reason is a lot more mundane. Sometimes it's rampant insider trading (as in the oil futures mkt). At other times anyone who has bothered to read a newspaper would have seen it coming from a mile away. A good example is the collapse of the Thai baht. Any regular reader of the Far Eastern Economic Review would not have needed the markets to send a msg - for months the magazine was filled with dire warnings of imminent collapse in its op-ed pages.

Another issue that Mr. Insana did not address is the very important question of how to separate the signal from the noise emanating from the market 24 hours a day. As someone who had (foolishly) dabbled in the futures market, I know first hand that wild swings in the market can be triggered but nothing more dramatic than a 1/2-hr T-storm in downtown Chicago. (I always susepct that if I wait at a 2nd fl. window at the CBOT and sprinkle water on the head of a particular trader as he leaves the building, I can make a killing in soybeans.) In the days of old when the market was almost the exclusive domain of the Smart Money in the know, the msg. of the mkts was probably a lot more reliable than today, when the unwashed masses can steamroll the smart money based on the most ludicrous rumor posted on Pump-n-dump.com. How to separate the grains from the chaff is something we'll have to leave to another CNBC author.

BTW, there really is a web site called pumpanddump.com.

Those other reviewers (as well as CNBC, Amazon and financial experts) are right. SIMPLE MONEY SOLUTIONS by Nancy Lloyd (a Federal Reserve Board economist who I see frequently on CNBC and read in the New York Times Sunday Business) and this book by Ron Insana are all I needed to finally make sense of my personal finances and begin making good investment decisions for my personal portfolio as well as my 401(k) plan.

By using the outstanding, original and easy-to-follow advice in these two books my net worth has actually risen into the high six (6) figures!!! Not bad while the market is stagnating or dropping.

My friends, whose portfolios have been plunging in value, are in awe of my newfound financial savvy and skyrocketing bottom line.

And I owe it all to the information I picked up in these two incredible books. Ron and Nancy should patent this advice. It beats anything I've read elsewhere.

CNBC anchor Ron Insana's second book on the stock market, "The Message of the Markets," follows "Traders' Tales" in 1996, and does an excellent job of selling you on the idea that the market does send signals for anyone who's interested in looking for them. Using Insana's words, "Many times the prices of stocks, bonds, and commodities accurately anticipate or forecast future events. "But what is a "market?" If a market is where buyers and sellers come together and agree to exchange assets - stocks, bonds, futures, options, wheat, oil, gold, cloth, Beanie Babies, guns, drugs, etc., then the "message" of the market has to be the PRICE resulting from that exchange. That price level conveys enough information that if you know what you are looking for, you will be able to anticipate future events solely on the basis of price and its trend. Why? Because there is what Insana calls "smart money" and "dumb money."Smart money belongs to insiders, those closest to the action who see and know what is happening. They act on their knowledge, leaving their tell-tale footprints of transaction prices for all to see. Then there are the outsiders; the ones who wake up one morning and read about something that just happened, realize that it is significant, and decide to catch the obvious trend already in progress, invariably buying from those same insiders who got in months ago anticipating exactly that outcome. What Insana doesn't say is that without smart money to indicate the way, all markets would be chaotic, panic-driven price spikes in either direction as everybody tried to react to the same thing at the same time. He is particularly correct when he warns to watch out for the price move "with no apparent reason." It can signal momentous events on the horizon.The real message of the book thus becomes that if you learn to track where the "smart money" is going, then in addition to profiting along with the insiders on the various price moves, you can also make more intelligent business, investment, and career decisions. Insana uses the interest rate yield curve as well as popular averages to predict the onset of recessions; market internals (Advance/Decline Line, diverging Dow Jones Averages, etc.) to predict the stock market; and commodity price movements to predict geopolitical events.
He gives industry/sector group relative strength rotation credit for frequently predicting the economy's strengths and weaknesses and cites ways in which this can be used in selecting career paths as well as suggesting business trends. He uses commodity price moves as signals that foretell future events such as Chernobyl, the Gulf War, the Egypt-Libya potential war, and other geopolitical upheavals.  However, I believe he makes too much of the market selling off just prior to the announcement that JFK had been shot. There is a story about a certain well-known network newscaster in Dallas making the call back to his NY newsroom, then ripping the pay phone out of the wall to keep other reporters from using it to get to their newsrooms. So there may have been real reasons for the news delay. Anyway, the market was shut down with the Dow suffering only a 3% decline. After remaining closed one additional day, the market continued its upward climb for the next 3 years. While a member of the Pacific Stock Exchange, I witnessed the same momentary "front-running" when Reagan was shot on March 30, 1981. On that day something "felt" amiss when we suddenly got hit will an avalanche of sell orders. Minutes later, the news tape announced that the president had been shot. But like in the Kennedy situation, the market dipped momentarily, then continued its rally. In these two cases, the message was inconsequential, financially speaking. After giving numerous examples of what market signals are and how they've fared over the years, Insana asks his most thought-provoking question: "So why was it that most investors, all the world's politicians...failed to notice trouble signs on the horizon? Once again, it was the failure of many observers to pay attention to the market's ominous message."  The implication being that the rain clouds were forming but nobody took notice. The answer is simple yet unsatisfying: As long as we listen to what "they" say instead of watching what "they" do, we will always fall victim to "their" market. What Insana is making a case for is a market discipline termed Technical Analysis. It looks at market action, valuing above all else the constant interplay between the supply and demand for a any tradable entity, and considers Fundamental Analysis (Wall Street research) as so much hot air. It is not a particularly popular stance, but it is much closer to allying yourself with reality than anything else.

This book is just plain horrible. I am a trader and a cyclical investor. I am also an engineer with Engineering Mechanics background, and very familiar with the complex math explained by Ehlers. But let me tell you, for people without any background in math this book is an absolute waste of time.

The most important thing that Ehlers should have focused, he simply forgot or ignored. The book fails to show real life examples with buy-sell signals using the indicator. It goes on and on along the theoretical lines of cycle analysis and it stays at that throughout the book.

It would have been much more entertaining to explain the indicator and show real life examples. But from my experience as a researcher and writer of research articles, people from this field tend to embelish and emphasize the theoretical size while completely ignoring the pure and simple aspects.

A simple cycle analysis done with moving average detrending as explained by Pring is much easier. Also, a simple look at the charts and the drawing of a simple cycle lines is all that it takes to show you the turning points.

The broad trading public has been slow to recognize John Ehlers work to apply cycles methodologies (from the sciences) to trading markets .... which is good for those of use who have discovered Ehlers' work with MESA (Maximum Entropy Spectral Analysis).

The first edition of this book is still the clearest and most concise discussion of applying cycles theory to markets I've ever read. This new edition retains all of the content of the first edition, but updates it with a lot of new and additional information from Ehlers' recent research into cycles and his development of trading indicators and tools.

Many are familiar with the J.M. Hurst classic: "The Profit Magic of Stock Transaction Timing". Ehlers goes far beyond Hurst's pioneering work. Ehlers is an original thinker, applying new techniques and research using MESA to the market. Hurst was using a multi-million dollar mainframe in the 60's .... all of us have 10,000X more computer power sitting on our desktops than Hurst had .... Ehlers techniques can help the serious trader and investor turn all that "horsepower" loose on the market today, making it accessible to even us small traders.

Hurst was also constrained to using Fourier Analysis for cycles detection .... Ehlers' MESA overcomes the need of Fourier for long data spans to compute cyclic content.

If you're serious about the markets, this book needs to be part of your library .... along with Ehlers other book: "Rocket Science For Traders"