Day traders and other investors everywhere are being misled by the very organization that we are trusting to lead us out of the current economic predicament that we as a country, even a world, have found ourselves in – The United States Government. And those who want to position themselves to take advantage of the resulting market turmoil will learn day trading strategies of success.
You’ve no doubt noticed the rising unemployment rate over the past year. In recent months, the unemployment rate has crested 10%, and most recently, dipped back down below 10%, to 9.7%. However, the unemployment rate that is released by the Government is not the “true” economic unemployment rate.
In fact, it’s downright misleading. And it is meant to be.
Consider this – in the most recent unemployment data release, the so-called economic “experts” predicted a job GAIN of 10,000 jobs. But instead, we actually lost another 20,000 jobs. And despite the job loss, the “unemployment rate” actually DROPPED from 10% to 9.7%. So ask yourself – how is it possible that the unemployment rate would DROP when we had a net LOSS of 20,000 jobs?
How could we lose jobs, and also reduce our unemployment rate by 0.3%? The answer is very simple – the “unemployment rate” released by the government isn’t the true “unemployment rate”. The unemployment rate that you are most likely familiar with doesn’t include all categories of the unemployed. And the figures have also been “seasonally adjusted”, which artificially skews the data.
If you visit the Bureau of Labor Statistics website and actually research the economic data yourself, you’ll discover that, while the “seasonally adjusted” unemployment rate is 9.7%, the “not seasonally adjusted rate” is actually 10.6%, as compared to the “not seasonally adjusted rate” in December 2009 of 9.7%. So did the unemployment rate really drop 0.3%? Or has the data been manipulated to paint a better picture than reality?
But the unemployment shenanigans don’t end there. In fact, the “seasonal adjusting” factor is just the beginning! The unemployment data released by the government doesn’t actually include ALL unemployment – they conveniently leave out several key categories of American workers. For example, the data fails to include a group called “marginally attached to the labor force”, and a subset of this group called “discourage workers”.
People who fit into this category would include those who have searched for a job, who want a job, but who are not “actively seeking a job”. People who have become so discouraged that they have (at least temporarily) given up. The government would have you believe that these groups should not be included in the unemployment data, because they aren’t actively looking for work.
But this group is still in many cases receiving unemployment compensation, and they are still creating a drag on the economy. Just because you aren’t actively looking for a job does NOT mean that you are no longer “unemployed”. Also, the government’s interpretation of unemployment doesn’t include those workers who are “economically unemployed”, or the “underemployed” – people who WANT and NEED full-time work, but have had to settle for part-time work because there is nothing else available.
These people cannot live on their current incomes. But because they do in fact have a “job”, they are not included in the “official” unemployment rate. So what does the “true” unemployment rate look like, once you eliminate the seasonal adjustments, and you consider ALL categories of unemployed and underemployed workers? How does 18.0% sound to you?
That’s right, the non-seasonally adjusted, “true” unemployment rate, including ALL categories of the un- or under-employed, is a whopping 18.0%. And it increased by 0.9% from December 2009! That’s a far cry from the 9.7% released by the government. The data released earlier this month would have you believe that the economy must be improving. But if you look at the real data, how could you possibly conclude that? How could you really believe, after critically considering this data, that the Economy is headed in the right direction?
So the question then becomes, WHY does the government calculate and release the data in this format? Are they purposely misleading the U.S. citizens and investors? Hopefully it’s not something that sinister. But it could be. The general public will at some point wise up to the unemployment shenanigans, and will realize that despite the falling unemployment rate, the economy really IS NOT improving.
And when that realization hits, the traditional, buy-and-hold investors will panic, start selling off stock, and we could be facing another market collapse. For a traditional long-term investor, the true unemployment rate should make them shiver in their boots, should keep them awake at night. However, many day traders are absolutely GIDDY about the unemployment rate data. Not because they are bad people that enjoy watching others suffer.
But because a day trader recognizes that wildly fluctuating economic data and also misleading data that will eventually become public knowledge will create the V word (which is universally LOVED by day traders)
Volatility, to the average, every day investor is a very, very bad thing, and creates massive risk, and potentially leads to massive losses. Traditional, buy-and-hold investors like nice smooth, slow, gradual (upward) movement. Volatility to a traditional investor can be very straining mentally, and often leads to the disgusting phenomenon among long-term investors of “buy high, sell low” (which is, of course, very opposite of what the goal is).
However, a day trader LOVES volatility, because they recognize what it represents.
In fact, a day trader would spell Volatility like this:
A seasoned day trader will recognize the huge profit potential, the massive opportunity that wildly fluctuating (i.e. volatile) markets represent…IF they know what they are doing. If they learn day trading strategies for success. Of course, an inexperienced day trader will get eaten alive by volatility – the market will take them down faster than they can blink. But those who learn day trading, and then find effective strategies for dealing with volatility, and remain disciplined, will discover that the wildly fluctuating markets caused by economic turmoil, such as rapidly increasing unemployment (about which we are being misled) will create day trading profit opportunities that a traditional investor can only dream about.
But you MUST learn day trading strategies that are effective in periods of high market volatility. And you must learn to think critically for yourself, and don’t just take news stories and announcements at face value.
Even if they are being released by the United States Government.