​There is no end to the television shows about buying a rundown house, repairing it, and selling it for a profit.  It’s like day trading internet stocks in 1999, everyone is quitting their day jobs to get into the racket. 
 
And just like in 1999, these people do not understand about the risk they are taking, where the trouble might come from, and what reward they should expect for taking these risks.
 
Real estate is doing well, but not all parts of the sector.  In the commercial space, offices and retail are getting hammered while warehouse, distribution and logistics centers are trending higher. 
 
The genuine star of real estate, however, is the residential group, specifically single-family homes.  Large rental divisions are not keeping up because of COVID-19 related moratoriums on rental collection.  It is the American dream to own a home, and that dream is reflecting one of the hottest markets in the global economy today.
 
Possibly from the beginning of human economic activity until recently, real estate went up during inflationary times.  Inflation simply means rising prices, which can take place in specific pockets as well as the big picture. 
 
Internet stocks experienced inflation in 1999 while everything else was deflating.  The last time the US economy saw broad based inflation was the 1970’s as oil prices shot up and everything else from food to real estate pushed up.  Real estate has always been a way to protect and profit during periods of inflation. 
 
Well, not anymore.
 
As long as America avoids a full-scale war with China or seeing it’s dollar crash, we will not likely see another period of rapidly rising prices in the stuff we buy to survive.  I realize this is a shocking statement to some of you, especially if you worked during the 1970s. 
 
But carve my words in stone, bury them in a time capsule, dig it up every 10 years for a century and I will still be proven correct. 
 
If inflation is dead (for the time being), why are residential real estate prices going up so much lately?  Interest rates.  The market is being entirely driven by the all-time low interest rate environment we have been in since March.  I know a lot of people attribute it to COVID. 
 
Work from home is spiking home related projects.  Lower spending on entertainment and other areas is increasing spending power for the house.  None of that matters nearly as much as interest rates. 
 
If 15-year mortgages were five percent instead of half that amount, the residential market wouldn’t be this crazy. 
 
I think it might be all about the low interest rates. 
 
Don’t believe me? Here is the proof.
 
Global interest rates are primarily set by the US government 10-year bond.  The 10-year is the benchmark that everything else pings off.  America was paying just under two percent in January to borrow money for 10 years.  That rate crashed to less than a half a percent in early March as world economies came to a stop. 
 
Interest rates then began to fall in every corner until a few months ago when people could get a 15-year mortgage at less than three percent.  Free money to buy a house, and that is exactly what people have been doing.
 
Housing related stocks have soared since March as the tide has lifted every boat in the group.  Home Depot stock has doubled.  ITB, a basket of home building companies, is up 130%.  PKB, a basket of construction related firms, has advanced 150%, and PFSI, a mortgage service provider, has screamed ahead by 350%!  It has been 15 years since this group did this well.
 
Here is the thing.  The US 10-year plodded along near those low levels from late March to early June, when a spike took it to 95 basis points (just under one percent, or 100 basis points). 
 
All housing related stocks immediately pulled back.  The 10-year receded until the middle of August and guess what?  All housing related stocks went back up.  As the 10-year jumped in August, housing stocks fell again. 
The correlation between interest rates and the housing market will stay in place for quite a while.  It is unlikely that America will ever see a crash in the housing market was like 2008, when prices in some areas like San Diego and Las Vegas dropped by 60% or more. 
 
If interest rates keep rising, however, home prices will stop rising as fast and may even go slightly negative.  That will be enough to put the Two Chicks and a Hammer back in the toolbox for a bit. 
The federal reserve still has enough ammunition and a conducive environment to maintain their agenda of steady, but somewhat low interest rates for a few years at least.  The 10-year is likely locked in a trading range of 65 to 140 basis points for, well, 10 years. 
 
The aforementioned are some of the best tools you need to keep your investing house in tip-top shape.
 
___________________________________________
Bottom Line
 
There are several internal stock market indicators that have exceeded their September 2nd levels, while stock market prices have yet to do so.  The 80-year history of these indicators suggests prices will follow over coming months. 
 
I fully appreciate that many of you are nervous, anxious, and concerned.  I am not.  And when it comes to your investments, I suggest you should not be either.  Besides, the government stimulus packages will continue to be rolled out in 2021.
 
Stocks may continue the recent turbulent behavior for another few weeks, but the best probability outcome between now and February is a resumption of the intermediate uptrend which should take stocks to new highs and beyond.

Continued success,
d-seven

​
What are your thoughts? Comment below.

​Many opportunistic traders/investors are contemplating taking advantage of these low-energy prices.

After all, starting off the week, U.S. oil benchmark crashed to $1 per barrel for its lowest close and biggest one-day fall on record.

This just might be a juicy opportunity for investors willing to ‘buy and hold.’ Needless to say, we are more than likely setting the stage for a significant bottom in oil.

The old adage “don’t catch a falling knife” should generate a healthy dose of fear to any consciously wary trader. And at the very least, it should trigger a responsible flight instinct.
​
Nevertheless, the reason investors are eager to place their financial necks on the proverbial chopping block is because oil is down—and by a lot. The price of each barrel is off more than 70% from December 2019.

The shale drilling revolution unleashed a production rush that eventually allowed America to become the number one oil-producing nation on earth—and that includes the U.S. out producing Saudi Arabia and Russia, too.

U.S. oil futures have dropped to their lowest prices since early 2002. Gas prices have hit a 10-year low. The average national price for regular unleaded gas stands around $1.785 per gallon at the time of this publication. Prices throughout the energy sector are down across the board. But, indiscriminate, unfocused buying is not a prudent approach to responsible investing—especially in today’s extreme market environment. Picking bottoms never work.

With a proper technical and fundamental understanding, a spectacular opportunity of gain may await those ready to wade into the bloodied oil fields of today.

But for some, placing hard-earned profits in the energy sector makes a stomach a bit squeamish—and rightfully so. Many analysts are expecting a wave of bankruptcies that will keep the lawyers, courts, and accountants busy for years dealing with the aftermath.
 
Companies were formed, loans were taken, equipment was purchased, and wells were dug. Companies are being murdered in this environment. The question is, who will die on the vine and when will it happen?

Six years ago, a basket of stocks from the oil services group (OIH) peaked at $57 per share—up from $20 in 2008. EOG Resources (EOG) went from $20 to $120 during the same time. Yummy, right? Well, today it hovers around ~$40.


The breakdown of the energy sector was technically obvious to us skilled traders. Longs were closed out when key support levels were violated. The savviest of traders have been short in this sector and now looking to buy-to-cover to lock in some nice profits.
The opportunity we may have before us to buy oil right now is certainly tempting, and crude oil lows may be getting close to being set. When it’s time to buy, we expect gains to deliver significant upside potential.


Entering this market will require a high skill level in technical analysis. Price action will show us a trend reversal pattern to key on. This is critically important.


Here is what we know: oil will not go to zero. Today we crashed below $1, down from $107 only a few years ago. The growing pursuit of alternative energy will not wipe out international demand for oil for decades. And a few select companies, even operating under incredible stress, will thrive and survive for decades (e.g., Anheuser Busch survived prohibition).


Keep in mind that bottom fishing, to this degree, requires more than simply buying a basket of energy stocks and hoping for the best. We must be more intentional and savvier in our investing approach.


Although, XLE and OIH are down an incredible amount from their 2014 highs, over the next several years, large buckets like these are not expected to outperform the stronger sectors such as technology and healthcare. In other words, it might be smarter to target individual equities instead.


Consider the following technique to potentially increase your probability of success:

1. Identify and research fundamentally strong stocks within the energy sector
2. Watch the weekly charts on the baskets, XLE and OIH. Wait until a trend reversal pattern (i.e., double bottom, triple bottom, inverse head and shoulders, or falling wedge) is identified.
3. Buy an equal amount of, say, six stocks. Expect up to four of the six to eventually go bust. But the others, which do not, will probably pay extraordinary gains.

Within three years you will most likely have made a barrel of money.

In short, if you are short term look at the daily charts. If you are more long term, watch the weekly charts and identify a sector bottom, place an equal dollar amount into six stocks, and wait two to three months or roughly three years or so.


This strategy is not a spectator sport. Watch the charts on various timeframes to when to buy, and when to exit to maximize profits. Expect a short-term payoff in as little as two months. But the big play is waiting, say, three years after purchase. And, if Christmas comes early, reallocate your profits into other juicy trading opportunities.
 
To help you, below are six securities for you to research (in no particular order):

• TC Energy--TRP
• Cabot Oil--COG
• Genie Energy--GNE
• Magellan Midstream--MMP
• Matrix Service Company--MTRX
• Drill Quip--DRQ

I have 22 years trading experience using technical analysis. To become a savvy trader, you must stop approaching your investing like a gambler. Most traders are nothing more than gamblers HOPING to make a profit. If you’re in your 20s, more power to you. But if you are in your 30s or older, you do not have the luxury to gamble. That will kill your account faster than going to Vegas. You must get this right or you’ll be (for a lack of better words) “victimized” by the rest of us who are far more savvy and educated.  

You NEED a professional trader to mentor you. That’s the secret. This is precisely what Mark (the Meerkat) and I have found to be true in our own trading development. We both have been mentored. Matter of fact, I had two mentors. Successful traders are developed by other successful traders. Period. You can’t learn to ride a bike in a seminar or ask a book a question. It’s about being mentored. https://www.groktrade.com/tradingmentor.html

​d7

First, please give me the grace to make a brazen comment.
​
Well, studies show that you probably should NOT be trading in the live markets.
Your odds of success are as low as being a consistent winner in the casinos. The fact is, you will always have wins, but the odds of consistent net-positive profit gains are just not with you. Those “wins” that you experience keeps you gambling.

I’ll make this notion even worse.

Your mental makeup as a human being is likely to be the biggest sabotage to your success.

As human beings, we are not intrinsically wired to trade well. Our brains are created to assure survival, not to make money. For example, traders run away due to fear and run towards greed. Said another way, it’s hard to buy when everyone else is selling. Likewise, it’s equally difficult to sell your positions when they are making you money.

Intellectually speaking, traders usually understand what to do to make money in trading (ex. buy low; sell high), but they demonstrate the opposite and fail to measure up in their trading.
The odds of you being successful as a trader are sobering low.
​
Below are four (4) tips to fix your mental game and increase your profits.

​Most traders act a lot like how a mad scientist would act.

​Chances are this is you. Your crazy decision-making in trading seems like correct-thinking to you. However, your decisions prove to be anything but clearheaded thinking. You demonstrate a chaotic methodology. You try every new trading idea under the sun. You test every new concept that you learn about. You try all the new indicators; you match them together striving for better results; you read all the books and try all the guru systems; you listen, learn, and experiment with anything and everything you can find. Your understanding becomes a boiling pot of chaos and confusion. Your Frankenstein of a trading system cripples your effectiveness in your trading. Losses become a certainty.

These mad scientists always wash out of the market.
​
What can you do? Find a trader who you trust/respect—someone with many years trading experience and someone whom actively trades in the markets. Find that person and learn their system—and learn it better than anyone else. Start there. (We highly recommended a mentor. Don’t let this get by you.) Let this step be the beginning of your foundation as a healthy trader.

You will have to mentally divorce yourself from your own trading ideas and beliefs. This will be the hardest obstacle for a mad scientist. Eight out of ten of them will find a way to lose money using a winning system. …let that sink in.

​For clarity, the idea to savvy successful trading is to begin your trading off with a winning trading system. Let’s assume you have been formally educated in your trading and have a great basis to start your trading. Now you want to optimize your trading system to better match who you are as a trader and to make more money.
​
To do this, the best thing to do is test one specific change in the system’s plan at any one time to validate whether it is a good change, or bad. Once it’s deemed to be a profitable change, keep it and test the next change.

On the flipside, the worst thing you can do is bastardize your winning trading system by making multiple changes while testing your system. If you do, you quickly become disoriented to what is working and what is not. When this happens, your trading methodology drifts off into the proverbial left field—somewhere near Jupiter. When it does, you find yourself becoming that revolting mad scientist once again. Don’t do this.

​The fastest way to stay grounded in developing as a trader is to map your plan and do so in painful detail. In other words, establish a foundational trading plan that will guide your every step. The problem is that most traders don’t have a trading plan and will barely even give the notion a nod.

​It’s psychologically impossible to optimize and test your trading system without being bound by a written plan. You can only successfully test via a trading plan. If you make an excuse for yourself to NOT create and adhere to a trading plan, the best trading advice that I can give you is to trash the very idea of you being or becoming a trader. This will save you much money and unnecessary heartache. 

This will be the hardest thing for you to do--- and for several reasons.
First, we need to make several assumptions before proceeding on. Let’s assume that you have been formally trained, you do have a proven trading method that you adhere to, you are faithful to trading that method, you do only test changes to that method via a singular tweak (before testing more), and you are a “good” student—one who follows instruction well.

Assuming the aforementioned, the single best thing you can do for your trading (at this juncture) is to allow another trader to review your trades. You need a rock star trader to review your trading.

The reason you need to have your trading judged is because trading in darkness breeds contempt. In other words, people who trade without accountability quickly take on the “island mentality,” and their peril is in the belief that they are self-sufficient due to their intellect. This is mad scientist thinking.

These traders fully believe that they can figure out their trading problems on their own. This is a trap that even the brightest individuals fall victim to.
​

Everything you need to know is in the above text. It has been edited down for quick reading consumption.
​
Oh, one last thing.

The easy solution to all the problems highlighted in this article is found in the Grok Trade Mentorship program.  

​When Satoshi Nakamoto invented Bitcoin, he never thought he was inventing a currency. Nakamoto’s ultimate goal was to develop a system for digital cash without requiring a central entity to control and regulate it. This decision led to the birth of the world’s first cryptocurrency. 

​Since the emergence of Bitcoin in 2009, many other cryptocurrencies have entered the market, namely Ethereum, Litecoin, and Ripple. According to the Global Cryptocurrency Benchmarking Study 2017 by University of Cambridge, the combined market value for all cryptocurrencies until April 2017 was around $27 billion.

​
As soon as Bitcoin gained popularity, it required a market price to compare it against the traditional currency. It also required a trading exchange where users could trade it against actual money. The first trading exchange for trading Bitcoins and establishing a market price was founded in early 2010.

At the time of this blog post, NYXBT has spiked more than 600% in the past year!

The vital reason for the growth and popularity of cryptocurrency is its innovative, secure ecosystem, backed by blockchain technology. The mechanism ruling blockchain technology is simple.

Any transaction uploaded in the database is locked and encrypted. These encrypted transactions are uploaded onto the existing ledger which becomes a “block” in the system.

​A “block” is a public ledger that is shared among all the peers on the network. Once encrypted on the block, the transaction becomes permanent and unalterable. Each new transaction created becomes part of the chain of all encrypted blocks called the “blockchain.”

A $10,000 purchase of Bitcoin in 2010 would be worth around $300 million today. Said another way, a mere $100 purchase of Bitcoin in 2010 would be worth a whopping $3 million today.
But there is still a lot of hope for insane growth.

The past gains in Bitcoin are certainly not over, nor are these kind of gains just limited to the cryptocurrency Bitcoin. There are more than 800 cryptocurrencies in existence today — and a few of them, like Ethereum, Ripple, and Litecoin, will likely see similar growth.
By 2030, 15% of all global financial transactions are projected to use Bitcoin or a Bitcoin-like cryptocurrency. What this means to us is that anyone who still thinks Bitcoin is an interesting anomaly has been, and continues to be, dead wrong. 

Bitcoin developer, Jimmy Song, has compared the cryptocurrency trading volume to major stock exchanges like NASDAQ. While this seems like a far-fetched comparison, the growth in cryptocurrency is predicted to continue its growth exponentially well into the future and therefore, provides a solid investment opportunity.

It's a fact that cryptocurrency has revolutionized the way money is portrayed. It's highly probable that digital currencies will integrate into our current systems and do so sooner than later. Armed with this knowledge, it would be prudent to do some serious research on how to get into the crypto game.

​ 

So, you've heard of 'Pump & Dump,' but have you heard of 'Short & Distort?' Both are equally-- criminal. 

Traders can make money by selling short a stock, which is different than going buying long a stock.  Those who short sometimes go rogue and publically trash a stock in hopes for it to drop. These people are (now) known as "Short Trolls." A 'Short Troll' is identified as an ugly public nuisance who rapid-fires posts of criticisms about a stock in various investment forums or trading chat rooms. You know them well. They are loud and obnoxious and post often--too often. Every post is negative and they only criticise and do so unmercifully.

Traders/investors who analyze both fundamental and technical analysis to base their decisions to go long or short a stock is considered to be savvy. On the other hand, 'Short Trolls' are mental midgets who choose to go the path of least resistance and smear others. Perhaps they should wear brighter colors.

The daily deluge of never ending assaults can be nauseating. It's especially grand when 'short trolls' team up together and wage a collective assault. These trolls are like the boisterous town drunks who group up and stumble over to your party. 

WHY Do Short Trolls Do This? Money-money-money! 'Short trolls' are short the stock and the only way they make money is if the stock decreases in value. For this reason 'short trolls' veer off into criminal territory and say and publish inaccurate information and even defames to adversely manipulate the stock price.

WHAT CAN I DO ABOUT SHORT TROLLS?

1. Name them for what they are for all to see. They are "Short Trolls."
2. Point out 'Short Trolls' to others. Make them infamous.
3. Do not validate 'Short Trolls.' Ignore the points in their posts.
4. Group them together. Start a public list of 'Short Trolls' for others to see. 
5. Report their criminal activity to admin/moderators.
6. Report them to the SEC so they are on their radar. Report their crimes here.

​For more information read this and consider going on the offensive.

AUTHOR: d-seven owner of Grok Trade (@GrokTrade)

​PS. If this article has helped you, share it with others. 

The following (unedited) email was received from a user on Thursday, August 27, 2015. d-seven's response follows.

It's all about being more educated than the next guy: Dumb vs. Smart; Hope vs. Strategy; Gambling vs. System. Like it or not, but when trading, you are competing against other traders.

It's not too late-- Start off 2015 the right way and decide that you WILL BE more educated and better prepared than other traders who you are trading against each and every day you're in the markets.

Overall, even the uneducated investors (who were long the market) fared well in 2014. They say, "Everyone is a genius in a bull market."

As you know, stocks end the year bullish. Most indices did fairly well, unless you were in small caps. Below is the breakdown of the final tally of the 2014 stock market results.


2014 Final Numbers

• COMPQ           up       13.4%
  
• S&P500          up        11.4%
  
• DJIA               up        7.15%
  
• RUT                up        3.5%
  

As a trader for 17 years this February and an educator of more than 800+ traders, I can tell anyone who will listen that trading is about 1) education and 2) experience-- and in that exact order. If you mess up this important order , you will pay dearly in 'market tuition.'

Ex. The secret to a successful trading career is much like the secret to properly flying a plane. When flying a plane, it's imperative that you get your education (ground school) first and then log your experience second; It's costly, in more ways than one, when the order is wrong. In other words, do NOT try to fly a plane without first enrolling in excellent education. It's a simple concept that even the smartest of wanna-be-traders get wrong.


Continued success,

Des Woodruff

PS. Make 2015 all about formalized trading education. Make it your goal to be more educated and better prepared than any other trader out there.