To Find Money Flows, ‘Follow the Sun’

A week ago, we finished the first of 2 MTM Mastermind sessions. On the last day we had a visit from a very good friend and colleague, CNBC’s Rick Santelli. He and I worked together in the ’90s where we compared notes often. We each had our own personal style and technical approach to analyzing price action. However, he was and is far more adept at the fundamentals than I am. I’ve learned a lot from him.

Rick works long hours and his research goes deep. He is always prepared to answer questions regarding the effects fundamentals from around the globe have on financial products…interest rates, equities, precious metals, energies and forex. He taught us much during his visit.

With all the unvetted stories out there and media agenda, I asked him what sources he thinks can be trusted these days. Rather than rely on media Rick said he checks in with reliable sources within the industry from here and abroad. He has a daily routine, and here at MTM we promote having a routine or checklist to tackle each day.

An informed trader is prepared to react to any situation. It is a good idea to have a bullish, bearish or neutral plan dependent on the economic data. To become well-informed, Rick said, “follow the sun.” An event in the far east could affect the Japanese yen, for example, and the yen frequently moves in the same direction as our treasury futures and even precious metals. A move in those markets may also impact stock prices. The point is, a ripple abroad may make waves in America. Rick is great at breaking down the information and how news may impact different sectors.

To find the money flows, follow the sun. Quite often U.S. futures markets make highs and lows outside of regular trading hours. Now more than ever traders must be aware of outside influences and global events.

Bank of Japan (BOJ) and European Central bank (ECB) policy moves frequently set the tone for the U.S. markets. And our monetary policy often affects interest rates around the world. One of my weekly tasks is to view economic calendars for employment, inflation and sales data from the major economic powers. I recommend you do the same. A well-informed investor is bound to make more bank.

John Seguin
Senior Futures Instructor
Market Taker Mentoring, Inc.