Seven Indicators That Move Markets: Forecasting Future Market Movements for Profitable Investments (PERSONAL FINANCE & INVESTMENT) - Hardcover

KASRIEL

Hardcover

ISBN 10: 0071370137 ISBN 13: 9780071370134

Publisher: McGraw Hill, 2002

Synopsis

From newspapers, magazines, financial news networks and the Internet, the media bombards us almost daily with economic data. There is a well publicized calendar of economic numbers - new home starts, unemployment, GDP, CPI, manufacturing and non-manufacturing purchasing numbers. Investors have been told that these numbers affect the capital markets in predictable ways. The problem with these economic reports and numbers is that they are reported with a lag. These numbers are old, in some cases months old. In essence they are actually recapping a past event. These are not the numbers to use to actually predict future market movements. For this, one should use market indicators because they present instant figures and data that are constantly being updated. These indicators are not as well publicized by the mass media but they are more important to understand, especially if you are an investor who wants to get a true picture of the overall market and where it is headed. The following are key market indicators described in this book that truly predict market movements: the Fed funds futures; Treasury yield curve; credit spreads; volatility; option price derivatives; futures price relationships; and industrial commodity prices. The individual investor doesn't have to be an economist to find and understand this data. This data is widely available in newspapers and the Internet. "Seven Indicators That Move Markets" will explain to the individual investor what these indicators are, how to interpret and analyze the data, and how to use this data for investing. To give an example of the importance of market indicators, the TED spread (the difference between the Treasury price and the Eurodollar price) signals a credit problem in the markets. This spread widened in the months preceding the Fall of '98 when Russia defaulted on its loans, the Asian currency crisis was spreading, and LTC Management went bust. Investors seeing this widening TED spread predicted credit problems months ahead of these occurrences. Knowing this kind of information, an individual investor should avoid investing in the financial stock sector. This book is sprinkled throughout with investment advice and real-life scenarios, as timely as this example. "Seven Indicators That Move Markets" should appeal to today's savvy investor who wants to learn as much as they can to protect themselves from future losses, to avoid unnecessary risk and to profit from favourable market conditions.

About this title

About the Authors

Paul Kasriel joined the economic research unit of The Northern Trust Company in 1986 as Vice President and Economist, being named Chief U.S. Economist in 1994. He is responsible for making the Corporation's economic and interest rate forecasts, which are used internally by the clients. Through written daily and weekly commentaries containing his straightforward and iconoclastic analysis of economic and financial market issues, Paul has developed a loyal following in the financial community, including the media. He is often quoted in national publications such as Barron's, Business Week, Investor's Business Daily and The New York Times. Paul is a weekly guest on television financial markets programs aired locally and in the Los Angeles area. He also appears on CNN, CNBC and PBS.

Keith Schap has been a writer in the Market and Product Development of the Chicago Board of Trade since early 1993. Schap specializes in writing about the use of derivatives in financial risk management and also in uncovering and developing new ways of using exchange-traded derivatives for these purposes. Prior to his affiliation with the Board of Trade, he served as senior editor of Future's magazine, where he developed market outlooks in interest rate, equity, currency, energy, metals, and agricultural markets and also produced many of the magazine's overall economic outlooks. He also handled the risk management area of the magazine's coverage. During his dryer affiliation with these markets and the general area of risk management, he has contributed something over 300 articles to magazines and journals including Futures, Treasury and Risk Management, Derivative Strategies.

From the Back Cover

Indicators You Can Use to Measure Today's Markets Accurately--And See Market Swings Before They Occur

From newspapers and magazines to financial networks and the Internet, investors are continually bombarded with economic data. Yet only seven of today's economic indicators--and not necessarily those you hear on the evening news!--can be relied on to forecast market movements accurately. Seven Indicators That Move Markets reveals these important leading indicators and explains how they can be used to dramatically improve the timing of your buy and sell decisions.

This straight-talking book sets aside complex jargon and calculations to help you make what you read and hear work for you consistently. Let it show you how to:

• Understand the direct relationship between market indicators and investment performance
• Interpret market numbers and use them to fine-tune your investment program
• Profit from favorable market conditions and avoid the unfavorable

Seven Indicators That Move Markets won't give you a cookie-cutter, one-size-fits-all formula for earning instant profits in today's market. What it will give you is the foundation you need to become a smarter investor, one who bases investment decisions on knowledge and intelligence--instead of blind luck and chance.

Fed funds futures ... Yield curves ... Credit spreads ... Volatility ... Option price derivatives ... Futures price relationships ... Industrial commodity prices ...

These seven indicators, for the most part ignored or paid minimal attention by financial pundits and the national press, have proven to be remarkably accurate at alerting investors to the direction and strength of pending market movements. Seven Indicators That Move Markets is the first book to examine how they function individually and with each other. It explains in terms that individual investors can understand what these indicators are, how to interpret and analyze them, and how to use the resulting data to instantly improve both upside potential and downside protection.

A collaboration between one of the nation's leading economists and a journalist who has chronicled the markets for well over a decade, this layman's guide clarifies and simplifies the relationships between indicators and market performance, including:

• How to read a yield curve, both in its entirety and in its segments
• Methods for using volatility to gauge how long an ongoing market run will last
• How the relationship between fed funds futures and various yield curves may reveal more than traditional indicators
• What industrial commodity price indexes can--and can't--alert you to
• How to separate true changes in market fundamentals from fear-driven "crises"

Finally, Kasriel and Schap's book shows you how to combine the seven indicators to construct a framework for accurately predicting and interpreting market events. In conjunction with your existing methods and strategies, this framework will give you a stronger handle on the current market environment, and help you to plot your best moves in that market.

No indicator is infallible. However, certain indicators have proven time and again to predict market movements with accuracy and precision. Let Seven Indicators That Move Markets introduce you to these indicators and show you how to use them to structure your investment moves.

Edition details

• Publisher: McGraw Hill
• Publication date: 2002
• Language: English
• ISBN 10: 0071370137
• ISBN 13: 9780071370134
• Binding: Hardcover
• Number of pages: 209