Daily traders and other investors around the world are being misled by the very organization we trust to get us out of the current economic situation that we have found ourselves in as a country, even as a world: the United States Government. And those who want to position themselves to take advantage of the resulting market turmoil will learn successful day trading strategies.
You have undoubtedly noticed the rise in the unemployment rate over the past year. In recent months, the unemployment rate has risen by 10% and, more recently, has fallen below 10% again, to 9.7%. However, the unemployment rate published by the government is not the “true” economic unemployment rate.
In fact, it is downright misleading. And it is meant to be.
Consider this: In the most recent unemployment data release, so-called economic “experts” predicted a job GAIN of 10,000 jobs. But instead we 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 for the unemployment rate to FALL when we have 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” published by the government is not the true “unemployment rate”. The unemployment rate that you are probably familiar with does not include all categories of 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 will discover that while the “seasonally adjusted” unemployment rate is 9.7%, the “non-seasonally adjusted rate” is actually 10.6%, compared to the “non-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 adjustment” factor is just the beginning! The unemployment data released by the government does not actually include ALL unemployment; they conveniently omit several key categories of American workers. For example, the data does not include a group called “marginally linked to the workforce”, and a subset of this group called “discouraging workers.”
People who fit into this category would include those who have looked for work, who want a job, but are not “actively looking for work.” People who have become so discouraged that they have given up (at least temporarily). The government would have you believe that these groups should not be included in the unemployment data, because they are not actively looking for work.
But this group still receives unemployment compensation in many cases, and they are still creating a drag on the economy. Just because you are not actively looking for work does NOT mean that you are no longer “unemployed.” Furthermore, the government’s interpretation of unemployment does not include workers who are “economically unemployed” or “underemployed,” that is, people who WANT and NEED full-time work, but who have had to settle for part-time work because there is nothing. more available.
These people cannot live on their current income. But because they actually have a “job”, they are not included in the “official” unemployment rate. So what does the “true” unemployment rate look like, once you remove seasonal adjustments and consider ALL categories of unemployed and underemployed workers? What do you think of 18.0%?
That’s right, the seasonally unadjusted “true” unemployment rate, including ALL categories of unemployed or underemployed, is a whopping 18.0%. And it’s up 0.9% since December 2009! That is a far cry from the 9.7% published by the government. Data released earlier this month would have you believe that the economy must be improving. But if you look at the actual data, how could you conclude that? How can you really believe, after critically considering this data, that the economy is heading in the right direction?
So the question is, WHY does the government calculate and publish the data in this format? Are they deliberately misleading American citizens and investors? Hopefully it’s not so sinister. But it could be. The general public will, at some point, pick up on the shenanigans of unemployment and realize that despite the drop in the unemployment rate, the economy really IS NOT improving.
And when you realize it, traditional buy-and-hold investors will panic, start selling stocks, and we could be facing another market crash. For a traditional long-term investor, the true unemployment rate should make them shiver in their boots, it should keep them up at night. However, many daily traders are absolutely GIDDY with the unemployment rate data. Not because they are bad people who 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
Volatility, on average, the day trader is a very, very bad thing, and it creates massive risk and potentially leads to massive losses. Traditional buy-and-hold investors like a nice, smooth, slow, and gradual (upward) move. Volatility for a traditional investor can be very mentally stressful and often leads to the nasty phenomenon among long-term investors of “buy high, sell low” (which is, of course, the opposite of the goal).
However, an intraday trader LOVES volatility, because he recognizes what it represents.
In fact, an intraday trader would write Volatility like this:
CHANCE
An experienced day trader will recognize the huge profit potential, the great opportunity that highly fluctuating (i.e. volatile) markets represent … IF you know what you are doing. If they learn day trading strategies for success. Of course, an inexperienced intraday trader will be eaten up by volatility – the market will knock you down faster than you can blink. But those who learn intraday trading, and then find effective strategies to deal with volatility, and remain disciplined, will find that wildly fluctuating markets caused by economic turmoil, such as rapidly rising unemployment (about which we are cheating) will create intraday profit opportunities that a traditional investor can only dream of.
But you MUST learn intraday trading strategies that are effective in periods of high market volatility. And you must learn to think critically for yourself, and not just take news and announcements at face value.
Even if they are being released by the United States government.