It goes without saying that the current market makes it difficult for users to find trades that work outside the realm of day trading the markets. As we venture away from day trading, we become swing traders (or more commonly known as position traders). Our objective in this case is not to day trade volatility but to understand the flows and ebbs of price and their impact on the entire trend. The opportunity for this skill is immense as it allows the trader to capitalize on the fluctuations of price; becoming bold when others are fearful and fearful when others are bold.

A key insight to spot these price trends is the understanding of businesses and their respective industries. The understanding of the relationship between the markets they serve and the underlying business entity is one of the many keys to understanding where capital, en masse, will be invested in, thus resulting in price appreciation of a given sector and the underlying company that is best of breed in the competitive market place.

The current environment makes it difficult for traders to find the best opportunity. After all, we are all competing for returns and profit. This year is no exception. Without a doubt, this year has made competition that much tougher. In bull markets, it is easy to invest in companies that are benefiting from the macroeconomic picture. We see in 2005-2007, the focus on investing with commodities garnered hefty returns to the bullish trader. In 2008, the environment will benefit the trader that is adaptive to the situation and is humble to admit when he is wrong and quickly close a potentially devastating trade.

But the question still stands--where is the best trade? What is a strong pattern to focus on?

The current market environment makes it tough to decide which stocks to adequately allocate your capital. In this regard, it is always best to find stocks that have strong relative strength. Relative strength is not an index to follow nor any ranking system (popularized by Investors Business Daily), rather it is an analytical method based on comparing the underlying stock in question with the performance of the overall market; more qualitative than quantitative.

A general example here is if the markets are down 5-10% year to date and the stock in question has barely moved within the same exact time frame, or even moved higher by a certain percentage, you have a strong stock that has been excluded by the market. The probability of superior returns here is obvious. Despite what seems to be so general and mundane may prove to become your biggest asset as your identity as the speculator.

Introduction: Changing Market Perceptions

The market is quite unforgiving to investors of all skill levels. Yet the most interesting phenomenon with the markets is that it is also the most forgiving form of business. The immense flexibility of market participants to make money is unmatched by any other form of business. The ability to reverse one's decision relatively quickly without incurring immense costs is one of the premier foundations to the wealth creating ability of the financial markets.

There are a little over 1.3 billion people living in China today. To put this in its proper perspective, there are only 6.7 billion people in the world today. China represents a full 20% of the world's population, so one in every five people on the planet is a resident of China.

Moreover, the strong pressure within China to show the world it is an economic force is obvious with the grandiosity that is the Beijing Olympics. This new mindset, coupled with a new health care reform plan, has provided a unique opportunity for companies to obtain a presence within this new health care system. The opportunity has always been there, yet it has been always difficult to pinpoint the right company to obtain a government backing. Understanding the Chinese system is paramount point for western corporations seeking to obtain a preeminent and worthwhile position to generate above average return on capital investments.

Current commodity movements and fluctuations in both equity and commodity markets certainly make it difficult to get your mind together and play the best trade. As a trader and investor, we must remember that these stocks are nothing than mere representations of the underlying collateral we are trying to value.

At any given day, the price you see on the ticker is the full value of the company that day, that minute, that moment. Whether or not it is really the true value is irrelevant to the situation and demands of being a market participant. Moreover, such an environment is where we must center our focus and place our trades with the best representations of collateral there are. Do not try and feel an affection for these electronic symbols. They are merely the product and means to your end.

While the latest rave is the FOMC meeting and its “language” [I fondly remember the time when Greenspan was still our beloved federal reserve chairman and CNBC spent a 15 minute segment going over what was truly behind the implications of the word “but” in a sentence muttered by the former fed chair], investors must be focused on opportunities that tend to be abound during times of crisis.

Law of the Jungle: For the Powerful Trader [you] reading this---Be the Predator

In my opinion, one of the best investors of our time is Peter Drucker. If you have never heard of this man, you are missing out.

Drucker has held his own legend in the sphere of executive management [almost every MBA student and CEO has heard of this man]. Accordingly, he is the father of management, writing the commandments as to how management ought to be implemented throughout a corporation. If one were to go back to the first few novels on management published by Drucker, one would find that the majority of today’s “hot executive business books” will, without a doubt, spew the main points Peter had been teaching his entire life.

It has been known since the early days of management that consumerism is what drives capitalism. For any business, you provide a service which provides a utility for the individual who is seeking some form of satisfaction—either through the beauty of the brand [Ferrari] or, in Salesforce’s (CRM) case, the satisfaction of starting your own company at a low cost.

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As market speculators, we have to digest everything in the markets. From the extravagant headlines to the not so sexy ones. We must also use logic and rationality to dumb things down and to see reality as they are. I will not pose much of an opinion here, but merely suggest it, and take note of interesting prices in the markets. Because at the end of the day, it is the price that moves us to act and to think and to criticize.

If you haven't caught the biggest news to spur the market rally to new heights (Nasdaq 3500 is my prediction), then let me fill you in.

You can say all you want that the United States is no longer the powerhouse that drives the world. The common metaphor that is used nowadays is that we are Rome and bound to fall. But the oil rich Arab countries tell the realities; that the world will follow the U.S. in times of crisis. These countries, risking new inflation pressures due to global growth and demand, followed the U.S. Federal Reserve's lead by lowering official interest rates to keep their currencies aligned with the dollar.