Friday, 18 June 2010

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

Market Pulse

The opening range for June has been well established. So far in the month of June, the S&P 500 has penetrated the lows of June 1st and has catapulted above the June 3rd high. It seems for now that the month of June is going to make it hard to determine the direction of market in the short term. The long term is more tricky. It has been clear to me since August of 2009 that the market needed to correct at some point. The real question is: "How big of a correction is it going to be?" The bulls and bears have been grappling with that question. The bulls believe that the market was due for a correction and that the market's decline will be rather constructive in order to set the market up for higher prices. The bears believe the decline is the start of something bigger and that the peak in late April could be "All She Wrote". In my opinion, there is no evidence to give credence to the bull case because it doesn't pay to be complacent in the face of an obvious decline in the market. The bears on the other hand may have something to take note of because the viciousness of the decline in such a short period of time doesn't completely lend itself to the idea that the market is experiencing a normal and constructive correction. I am not completely buying the bearish case, but I am open to the opinion that the market's rally from the March 2009 lows is over. The only opinion that really matters is the markets’ opinion. I think we will have to wait and see further market action to determine what the longer term trend of the market will be.

Monday, 8 March 2010

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap

Last week was positive for worldwide markets. The majority of worldwide markets closed up for the week. The FTSE 100 actually made a new closing high since the March 2009 lows. Other indexes like the DJIA, S&P500, NASDAQ, and the Bovespa are not too far away from making new highs as well. The evidence at this stage points to markets moving higher. The markets themselves are not giving off any bearish signals. The sharp plunge that started in January looked as if it may have been the start of something more, but February action completely took that bearish scenario off the table. The only problem is that many of the stocks that are outperforming in this rally are not having long enough consolidation periods (my opinion) to make initial entries with a high degree of confidence. I feel at any point this market could turn down, but a rally that has lasted for 12 months is clearly more than just a bear market rally. Something else is going on here, and I am not quite sure what it is. Can the market really continue going up at the pace it is? Can the stock market completely divorce from the real economy, which are in shambles in all the developed economies? Is all the negativity and pessimism overdone and a new bull market has begun, stealthily? My experience tells me that all markets correct SOONER or LATER, and this market is no different than any other. The highly anticipated employment report came out on Friday. It was better than expected. It’s getting difficult to tell reality from fiction these days. The housing market is not recovering, contrary to what any tv pundit will tell you. Informed individuals were saying that commercial real estate was the next shoe to drop 2 years ago. It seems as though it may be time for commercial real estate to take center stage in the headlines.

Friday, 5 March 2010

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

Market Pulse

The opening range for March has seen three positive days. Yesterday, the market closed up slightly (+4.18 pts). The market is still in a confirmed uptrend from the March 2009 lows. Each and every decline in the market is met with buyers coming in to lift the market higher. Although, at this stage in the advance (we are very close to a full 12 months) it is very interesting to note that it seems that the market continues to rise without the concurrent volume expansion you would see in a sustained bull market. There are some individual stocks that continue to outperform in this current rally (e.g. VPRT, VCI, DBRN, RDWR, and LZ; to name a few). In the market there are always opportunities to profit every single day. Even when the market goes down, there are stocks going up. And when the market is going up, there are stocks going down. Staying vigilant and sharpening your focus on a particular stock and getting to know its character can give you the edge you need to know when to make an investment commitment.

Sunday, 28 February 2010

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

Market Pulse

The market is in a holding pattern right now. February didn’t tell us much about what direction the market may move in. So far, the February low is holding, although the volume on the rally is pretty flat. Last Thursday’s reversal was strong evidence of a bullish case that the market is going to move higher. The high volume at the February low may have been a significant sign that the market has support.

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap

The market was pretty much unchanged for the week. There were some sharp moves. The S&P 500 plunged on Tuesday and Thursday mornings only to comeback immediately. That type of action is very strange to say the least. The market is unable to sustain a measurable move downward. It seems every time the market seems it could be starting a decline, a bid comes back underneath the market and it magically comes back at the end of the day. The longer term trend of the market remains up, although we may be in a shorter term correction. Some of the market pundits that I listen to like Marc Faber, Jim Rogers, Bob Prechter, Peter Schiff, etc. have differing views but ultimately they see mistakes being made by authorities, unsustainable markets, and a financial reckoning in the future. To me these things haven’t started to happen yet. We experienced the initial decline in 2008 and we are in the rebound period. Since the March lows, markets worldwide have come well off their lows. Now, it seems like we are hovering but really with nowhere to go. The consumer confidence report was released on Tuesday and it was disappointing. It shouldn’t be a surprise to anyone who has been looking around in their local communities. The economy is not recovering and the below average figure of 46 is reflecting the social mood. A new month is starting for the markets next week. February was essentially a sideways month. I thought that the burgeoning decline that started in January would carry over into February, but the market reversed course and went higher. The opening range for February gave no clues to the direction of the market. The opening range of March may be a little more helpful in determining the next move. We’ll just have to wait and see how the beginning of this week pans out. I don’t have any idea which way the market could go because I can see the market A) going higher, B) start plunging, or C) continue moving up and down with no trend. None of those outcomes would surprise me.

Sunday, 21 February 2010

Economic Statistics & Data: Your source for stock, stock market, economy, economic statistics and data info

ECONOMIC STATISTICS AND DATA


Current Growth rate, U.S. GDP: 5.7%

10-Year Yield: 3.77%

PRIME INTEREST RATE ON LOANS:3.25%

FEDERAL FUNDS RATE: 0.25%

Private-owned housing starts:

591 thousand units (+2.7% vs. Dec '09)

Single-family housing starts:

484 thousand units (+1.5% vs. Dec '09)

TAX RATES:

CORPORATE INCOME TAX RATE: 35%

Indiv. Rate on Ordinary Income: 15% ($8,375-$34,000) 25% ($34,000-$82,400) 28% ($82,400-$171,850) 33% ($171,850-$373,650) 35% ($373,650+)

Indiv. Rate on Capital Gains: 15%

CRUDE OIL PRICE PER BARREL: $79.81 +1.01

DOW JONES STOCK INDEX: 10,402.35 +9.45

S&P 500 STOCK INDEX: 1109.17 +2.42

NASDAQ COMPOSITE INDEX: 2243.87 +2.16

NYSE COMPOSITE INDEX: 7083.25 +2.87

NATIONAL DEBT: ($12,396) trillion


Saturday, 20 February 2010

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap:

Stocks made an impressive move for the week. The S&P 500 finished up 2.85% for the week. I said in previous blog posts that I didn’t expect the market to break above the February 2nd highs. Well, all the major indexes and some of the international benchmarks (e.g. FTSE, Bovespa, Straits, etc.) broke above the high for the month as well. Stocks went up every single day, and are now on a nine-day run upwards from two Fridays ago. The breakout out to the upside clearly signals that the market may have the potential to rise higher and even rally to new highs. Last week was pretty lackluster on the news front except for the FOMC meeting and the Fed’s decision to raise rates. I tend to watch markets (i.e. looking on my screens) rather than read news or keep up with financial events. So when I found out that the Fed had raised by 0.25%, I was surprised that it must have had no effect on the market because I would have noticed it. When I see a big move up or down in the markets, I usually check Bloomberg to see what the news is. And it’s usually Fed minutes, non-farm payrolls, jobless claims, manufacturing data, or consumer sentiment that can cause sharp swings. It was a pretty boring week. I think that most stocks went up in general. If you were overly bearish coming into the week, you probably got killed because stocks moved higher all week. The market never seems to amaze me these days. Can the worldwide markets continue to move higher month after month? We'll see.

Tuesday, 16 February 2010

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

Market Pulse:

The first day of this shortened week has started off bullishly. The S&P 500 rose 19.36 points (+1.80%) which pushed it back into the opening range for February. I said two weeks ago that the February 2nd highs shouldn’t be surpassed if we are going to have a sustained decline in the market. Today’s bounce will put that forecast in jeopardy if the market keeps rallying. One thing about today’s move was the real lack of volume behind it on the upside. It may be something or it may be nothing. Today’s markets aren’t like the market 30 years ago. You can’t completely really trust the volume you are seeing today. We have got program trading, flash trading, dark pools, etc. which cloud what is really happening in the market. So, from what the chart shows, I have to conclude that today’s volume was weak. There were a lot of big moves in individual stocks in the market which is positive. The only thing to do is wait to see if the market can really follow through strongly with the rally. Ideally, you want to see an up day on higher volume to give some support to the rally.

Monday, 15 February 2010

Commerce & Law: your source for into about commerce, commercial law, admiralty/maritime law, statutory law, and natural rights

AMENDMENT I.


Congress shall make no law respecting an establishment of

religion, or prohibiting the free exercise thereof; or abridging

the freedom of speech, or of the press; or the right of the

people peaceably to assemble, and to petition the Government for

a redress of grievances.

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap

As you can see from the weekly chart, this week’s action was pretty choppy. The market closed higher for the week, but barely. It isn’t the type of week you would want to see if you think the February 5th intraday lows are going to hold. The market’s up and down motion for the week have a corrective type of pattern rather than an impulse pattern. I think the February 5th lows will probably be broken and the market is headed for further losses. Using the opening range of the month as a basis, the forecast for a decline in February is still valid. The bottom line is: Don’t go out buying stocks now, because the chances are high that they will move lower. I like buying stocks that are moving down, but I like to make sure they are getting close to making sustainable lows (whether it’s in the short-term or long-term). Right now, I don’t think we are close to a short-term (3-4 weeks) or long-term (1-2 years) low in the market. It seemed that Greece was the big story over the last week. Their debt problems are in full spotlight and everybody is talking about the repercussions if they default. The course that governments have taken around the world should tell us how that situation will be resolved. Greece will be bailed out and their crisis will be forgotten in a year. It was only a year and a few months ago that the US investment banks and money center banks were in the spotlight. Those banks have not fixed any of the problems they had. They have only concealed them. Greece is a symptom of a larger problem within the global economic system. At some point credit expansion becomes a hindrance rather than an engine for growth. The ability to service the debt becomes a problem when a large portion of your outgoings are going to pay off creditors. The consequence of these rescues, bailouts, and irresponsible lending will be felt one way or the other. It will be interesting to see how it turns out. Well, the US has a new stimulus bill being introduced to rejuvenate the economy. The question has to be asked, “How many stimuli do you need to get the economy going?” That raises a second question, “How many stimuli do you need to do before you realize it isn’t working?” Someone should ask the people working in both chambers of the House and the head of the Executive branch of the US. In other news, there are some provisions that are trying to be slipped into the 3rd proposed stimulus bill without anyone asking any question according to this Bloomberg article. So, are people coming out of their shells and starting to spend again? The Advance Retail Sales report for January was positive. It was up 0.5%. The consensus was 0.3%, so it beat the estimates. You can probably get an accurate picture of consumer demand by asking your friends and neighbors if they are shopping. An even better way is to look at your own spending habits. If you are spending less money on shopping than two years ago, you can imagine what everybody else is doing in an economy where unemployment is 9%+. Speaking of the economy, last week the GDP for Europe (i.e. Eurozone) was 0.1%. 0.1% is not growth. It’s standing still. Although, most of the pundits are saying that a global recovery is taking place, I don’t think 0.1% adds much credence to their claims. Despite the recent pull back in the market since mid-January there are still some stocks making new highs from the March lows. I don’t advocate buying stocks hitting new highs. It’s just my preference not to buy at peaks, and to wait for the inevitable pullbacks. Stocks making new highs are certainly candidates for putting on a watch list. Just a few names on that potential watch list are VRX, LCC, UTI, UVV, TSN, SNS, SLE, ROK, RSC, RMD, RBC, PLT, PIR, PBT, NVO, LII, IDT, EMS, DLB, CEL, BRK.A, and ACF. Keep in mind that these stocks are in the middle of big moves, and the meat of it might be gone.

Friday, 12 February 2010

Chart Perusal: Your source for charts on the stock market and economy

Workweeks from Across the World

Systems Trading Ideas: Your source for system trading, trading system, systems trading, or stock trading system ideas

Trade Your Beliefs

There is a myriad of ways to invest and trade in the stock market. Principally, there are two schools of thought when it comes to investing and trading. The two schools are Fundamental Analysis and Technical Analysis. No matter which school you subscribe to, it is important that you develop a perceptual filter (i.e. a fundamental approach or technical approach) that matches your personality and your beliefs. You must invest using a methodology or a system that you believe in first and foremost. If you don’t, you will not be successful. You will be jumping from system to system in an attempt to find a holy grail that will make you money. The fact is there is no holy grail for making money. There is no magic system that will work all the time. It takes some time to develop your beliefs about the market and then to try to figure a way to trade or invest in the market using your beliefs. The practice that comes from trading or investing in what your beliefs are will start to build an intuitive feel inside you for market activity. That experience will give you the edge you need to be successful. One of the first things you must do before you trade or invest is examine your own beliefs about the market. If you don’t believe that anyone can make money in the markets, then you should give up trading altogether. If you believe that only the big hedge funds and banks control the market and have the inside information, then the system or methodology you develop should be based on trying to figure out what the hedge funds or banks are doing. If you think following the crowd is a bad way to find good investments or trades (i.e. herding or group think), then you must develop a system based on finding opportunities away from what everyone else is thinking about. So you can see by examining what you believe about the markets, it is possible to come up with a system that has the potential to be successful. The reason for its potential success stems from the fact it’s coming from your own mind. You could be the only person in the world with that system and that may be the reason it works.

Thursday, 11 February 2010

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

Market Pulse

Yesterday was really slow. Not much going on in the markets. We have got a lot of markets that are potentially on the cusp of changing direction. The gold market is experiencing a correction. There is an overwhelming majority of gold bugs who see any pull back in gold as a buying opportunity. They also don’t see any chance of gold actually having a sustained trend down because of all the monetary and fiscal irresponsibility of governments around the world. I don’t disagree with their thesis but when gold was steam-rolling up to $1200 I had to force myself not to buy it. It seemed like gold was acting like a stock that was racing up and I hate buying stocks that are making all-time highs. So, I won’t buy gold like that either. Some trend followers like doing that. They always say, ”Buy new highs, and sell new lows”. I can’t figure out how their mind can deal with potentially being the last guy on board the train. I also wonder where they put there stop. So, if they are any trend followers who trade like that. Let me know how you do it. The U.S. dollar also looks like it has the potential to rise much higher. In the October-December period of 2009, it looked really bad for the US dollar. I was wondering if it may be the start of the collapse, but the dollar has rebounded sharply against most other currencies. It sounds ludicrous to suggest that the US dollar can go higher, but charts don’t lie. The dollar is being bought and support by some major players. The commodities (e.g. copper, oil, platinum) are pulling back. I don’t know what to make of that. For example, oil has declined and is close to breaking the December 14th lows. My instinct tells me that they will probably be broken, which means lower prices for crude oil. But at some point crude oil has value because it’s needed by everyone. The S&P500 has taken a break from falling for the last few days, but there isn’t any real volume on the bounce. For the rally to continue, some much needed new buying should come into the market. Keep on the lookout for any more big down bars on the S&P500. If we start to see more big down days piling up, we might be discussing a return of the bear market.

Learn to invest: Your source for investment or investments, stock, stock market, and stocks info

Selecting the Right Industry Group

There is something to be said about investing in the right industry. When you are investing, you want to make sure that you are in an industry group that is leading the market. Similar stocks within a group tend to move together. If you take a look at the stocks within the Metal-Ores group (e.g. CCJ, BBL, VALE, CLF, RTP, FCX), the majority of the patterns you see will be similar. This group peaked in late 2007 or early 2008 and then they all plunged into the October or March lows. Since that time, some have risen faster than others but again they are all moving with each other. This is how stocks in the same industry group tend to move. Your job is to try to find out the leading industry groups, and then pick the leading stock within that group. How do you find the leading industry group? No one is going to tell you prior which group is going to lead the market higher before it happens. This is where your own homework comes in. You’ve got to read up on industries. Go to financial websites and read the articles. You will start to get a feel of which industries are hot at the moment. Typically, when the mainstream media starts hyping up an industry the party is usually over. But that isn’t always the case. You have to ask yourself if that particular industry group’s success can continue. Is it a sustainable growth period? Is the industry experiencing secular growth or cyclical growth? Is the industry ascending or descending as a percentage of the economy? These are all ways to find the hot industry group. I am now going to plug Investor’s Business Daily because I think it’s a great business source of information for individual investor/traders. They have a section within the newspaper that tells you which industry group is leading the market every day. So, they do the homework for you. You can spend your time investigating leading industries rather than trying to find out the leading industries.

Money, Credit and the Federal Reserve: Your source of info on banks, credit, Federal Reserve, and money

Monday, 8 February 2010

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap: The market experienced a major sell-off on Thursday. It was quite interesting to see a day like that because the market hasn’t had a day like that since 2008. The market plunged all the way into the Thursday’s close and finished at the absolute lows. I think that’s a rather negative and bearish sign. Meanwhile, though, the pundits still think that it’s a little pullback. If the markets keep moving lower, I wonder what they will say then. Toyota stock price has fallen to pieces in the last 3 weeks. I didn’t realize how emotional the reaction to the recall news would be. As Wikipedia states, ”The Chinese word for "crisis" is frequently invoked in motivational speaking along with the fallacious statement that the two characters it is composed of represent "danger" and (supposedly) "opportunity." Who knows whether the motivational speakers are just making it up, but it sounds good. The fact of the matter is that there is opportunity in the current Toyota crisis. I don’t think this is the end of Toyota by any means, and right now the heat is on them. But in a year or two people will forget about the whole thing when they fix the problems with their cars. In the meantime, I would look at potentially buying Toyota because it seems as though some large funds are dumping it. Let’s not forget the automotive industry itself is in bad shape. But I feel that Toyota is still one of the best car makers in the world and every company makes mistakes and goes through difficult periods. Perhaps this is Toyota’s time right now. From a technical standpoint, the heavy volume (indicating activity from larger players) is interesting to me. If you start to see big down days on heavy volume, but price closes at the top that would be a very obvious sign that “big money” is supporting the stock, not dumping it. The only thing to do would be to wait patiently for those signs. The unemployment picture in the US is starting to get almost comical for the standpoint that the numbers don’t quite make any sense sometimes. There were 20,000 jobs lost in January but unemployment went down. So, essentially more people lost jobs, but the official unemployment figure shows that people actually got jobs. Let’s just say it’s still bad, whether is 9.7% or 10.5%, it’s still too high and not encouraging. The market staged a big reversal on Friday. Take a look at the candle of Friday and you will see a strong reversal bar. Some sources say that the market bounced because from the July lows to the January peak, the decline was a Fibonacci retracement level. For the market to continue rising, we would need to see confirmation that the rally will continue with a higher volume up day. I really have no idea how this upcoming week might go, but I expect February to be down based on the big down days we have had in the last 3 weeks.

Thursday, 4 February 2010

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

Market Pulse: I was very interested in seeing how the first 3 days of the month would pan out for the markets. I have been a staunch bear since early January 2008, although being long the majority of 2009. I turned heavily bearish again around October and was quite stunned at the market’s ability to levitate even in the face of suspect (at least!) economic numbers, a poor housing market, and the consumer’s unwillingness to borrow (and the banks unwillingness to lend). So, my forecast for 2009, was that we would have a big rally. That rally would get everyone’s hopes up and optimism would return. The economic reality would hit in late 2009 (sometime in the fall) that the economy was not recovering as planned, and the markets would tumble again breaking the March lows of 2009. That break of the lows would provide a final washout of all the bullish investors, and we would potentially see a climactic low or an event driven low in the market. That low would probably be the nominal low in the markets for the next 20-30 years at least. That scenario did not quite play out. The market continued to advance through Oct. 2009-Jan 2010 and it was unrelenting (not even pullback more than 6%). Now, the market is showing its first real signs of cracking, and I am wondering if the this decline I was waiting for all those months. It remains to be seen, but I can say that January 2010 was a down month. Typically, how these bears markets go, you get 3 or 4 down months, followed by 1 or 2 up months, then 3 or 4 down months again, then 1 or 3 up months, and then a final 3 or 4 down months. Then it’s over. The lows are in and you can make quite a substantial amount of money if you get in at the lows. This bear market (I still think we are in) has been nothing other than abnormal. From the market peak in October 2007, the bear market was advancing in a typical fashion (as described above). But from the March lows, instead of rallying 1-3 months, the markets have gone up 9 out of 11 months, which just doesn’t happen in bear markets. So it made me think something else was going on here, and I just don’t know what that is because I have never seen anything like it. The type of advance we have seen from the March lows would usually signal the start of a new bull market. If that is the case, why is it that I feel 0% confidence that there won’t be some kind of ANOTHER market catastrophe or collapse. Blame it on social mood or whatever you want, but I wouldn’t want to be caught long at the beginning of 2010 and feel like 2010 is going to be exactly like 2009. Today, the market is getting crushed. This is the type of market action you get when you don’t have any kind of meaningful correction for 10 months. The market’s unabated rise was unhealthy and now we are seeing the consequences of that. I don’t know if it’s going continue for several months and recover, or if this is the top of the bear market rally I envisioned. If it is the top of the rally, then without a doubt the month of February should end lower. Period. Stocks should sell off the rest of the month and not surpass the February 2nd highs. Then we can sit back and see how March turns out.

Wednesday, 3 February 2010

Money, Credit and the Federal Reserve: Your source of info on banks, credit, Federal Reserve, and money


A very good simple explanation of what was going on at the Fed and the major financial institutions receiving bailout money.

Monday, 1 February 2010

Stock Focus

Stock Focus: I did a stock screen to find the companies who had risen the most from the March Lows. I am talking about the absolute best performers from the bottom. Surprisingly or not surprisingly, depending on your view, the best performers come from the absolute worst industries. It has been a dash for trash. One stock in particular is among the best performers. It is up 5,000%! Wow. Dan Holding Corp. (DAN) rallied from 19 cents to its Friday close last week of $10.31. It is in the automotive/truck equipment group which is a horrible group to be in because they are tied directly to the big carmakers, but the stock has vaulted off the lows. Maybe some of the larger players see something there, so it’s worth taking a look at. I think it’s a speculative play but some of the best performing stocks were penny stocks at one time. (e.g. Guess, it went down to below $2 twice in the late 90s and early 00s before skyrocketing up). I personally don’t think the future prospects are all that good for DAN, but things change. So it’s one that I will be keeping an eye on.

Learn To Trade: Your source for investment or investments, stock, stock market, and stocks info

Learn to Trade: In London, I was speaking to Tom Hougaard, a professional trader, at a seminar in October about trading. He told me that one of the hardest things to do is to add to a winning position. But when he learned how to do this and go against his natural instinct, It allowed him to profit handsomely in his winning trades. Essentially, I am talking about what Is called “pyramiding” or “adding to” a winning position. I myself am not a particular proponent of this method. I think the strategy definitely has some pros, but the cons are what I don’t like about it. Pyramiding a stocks upwards can be extremely profitable IF the stock continues in an uptrend. Where things get tricky is if the desired uptrend fails or the stock is whipsawed up and down and you are taken out of the position because of a stop order that is too close. My gut instinct tells me to follow the advice of legendary trader, Jesse Livermore, who says, ”Pyramiding is a dangerous activity and anyone who tries it must be very agile and experienced, for the further a stock gets extended in its rise or decline the more dangerous the situation becomes. I tried to restrict any serious pyramiding to the beginning of the move. I found it not wise to enter a pyramiding action if the stock was far from the base.”

Saturday, 30 January 2010

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap: Another down week? It can’t be---well---it is. Stocks got bashed this week across the board. If you take a glance at the chart for the week, you’ll notice that every rally was sold. The sell-offs were particularly steep which could mean that a real change in character in the market is occurring. Thursday and Friday weren’t pretty in particular. Friday sell-off was not a surprise to people who don’t drink government Kool-Aid. The big news at the end of the week was the GDP number. This number was reported at 5.7%. That means the US government said the economy was expanding at 5.7%, which is actually a wondrous number to report. For an economy the size of the US, 3% growth is considered good. 4% is very good. So the number comes out and it’s 5.7%. That should have given the bulls all the momentum the needed to take stocks higher. The problem is that the number is completely bogus and the market actually sold-off on a supposedly bullish number. Doesn’t inspire a whole lot of confidence when the market plunges on “good news”. You can’t believe anything that comes out of the government statistics and here is why. Last quarter the government reported 3.5% growth in the US which was above economists’ estimates. Then a month later they said, “Well actually it was 2.8%”. Then after that it was revised to 2.2%. So the real GDP growth in the previous quarter was 2.2%. You take out the tax credit for first time home buyers and the cash for clunkers and it was probably negative. Which would mean the US economy would still be in recession. So, it doesn’t do anyone any good to pay attention to anything the government says. The market is much smarter than the government or anyone else. The market has gone down for two weeks straight and it may be giving us a clue to its next potential trend. Let’s talk about Greece and the Eurozone economies. Anyone remember Argentina’s or Russia’s debt problems? You may have the same scenario playing out in Greece. Credit spreads are widening in those developed nations and the endgame isn’t pretty. Greece’s budget deficit is 12.7% of their entire GDP. That means 12.7% of their income is going to pay the creditors. Portugal, Spain, and France are all seeing their creditworthiness get questioned as well. Yeah, this sounds like a global “recovery” to me. I don’t think so. The politicians and central banks don’t get it. You can’t solve a debt crisis with more debt. You will have to pay the bill when it comes. Discharging the debt is just like paying the minimum balance on a credit card. The credit card company keeps charging you more and more each month. Your credit balance keeps growing. They are actually happy that you only pay the minimum because the means they will make more money off of you. The creditors of Greece, Spain, France, and Portugal will cripple the Eurozone economies because those countries debt payments will be so large that all the money collected will go to paying off debt. This is another one of those developing crises. Ben Bernanke was reappointed. Not a surprise. I am not going to say much on that. I think it was a bad choice and it won’t be realized how bad a choice it was until down the road. The Fed also decided to keep rates at 0%. Again, not a surprise. The Federal Reserve does not control interest rates. Everybody just thinks they do. The Federal Reserve follows market rates, and if the bond market is asking for no return in order for safety it should make you wonder how healthy the economy actually is. Boeing hit a new intraday high Friday from the March lows, and Tesla Motors has filed for an IPO. It is the first US car IPO since 1956. Oh yeah, the iPAD came out too! (Not gettin’ it.)

Thursday, 28 January 2010

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

Market Pulse: After last week’s end of the week sell-off, the market has done nothing this week. I heard all types of prognostications that Obama’s cracking down on the banks was going to have significant ramifications on the market on Monday morning. Yawn! The market isn’t really interested in much of anything. The market is clearly trading below the opening range of the month. A sign that is to be noted because we haven’t had a close for the month beneath the low of the opening range since June. So I’ll be watch to see if January turns out to be a significant top. There are only 2 more trading days left in the month, so it’s unlikely that the market will rally and close above. That will make it only the 2nd time since the March lows that the S&P500 finished down for the month. That would make 9 out of 11 months closing up since March. How many more months can the S&P500 close up without a significant correction? If I knew that I wouldn’t be talking to you, I would be out putting positions on. It will be interesting to see. The pundits are all looking at the recent correction and saying that is just a “little pull back”, “nothing to worry about”, “a little correction was overdue”, and other things like that. Nobody thinks it’s strange that the market is up 9 out 11 months, and that a more significant correction might be around the corner. The first 3 days of February might just hold a clue to how February is going to be. This month is done, stick a fork in it. I don’t think anything interesting is going to happen in the next two days. (I could be wrong though. You always have to consider the unexpected when dealing in the markets. You have to be prepared for a crash, pretty much every day, it seems like.) Netflix, NFLX, shot up yesterday (after hours) something like 19%. Damn, I was trying to get in there. Take a look at the charts of Blockbuster (BBI) and Netflix (NFLX) and tell me who you think is winning in that space. Prettty much a no brainer. It was coming down, just how I liked it too. I will have to rethink my entry strategy on that one. Also, I read an article about Panera Bread (PNRA) this morning. Seems like the company is doing really well despite the depression. Got my eyes on them too.

Systems Trading Ideas

Systems Trading Ideas: When it comes to designing a trading system, it is very important to think about entries and figuring out the best time to pounce on an opportunity. BUT… most of your attention should be focused on EXITS. Why? Because that’s what makes you the money. There are many systems out there that focus on getting in, but leave little to be desired when focusing on getting out. They do this because most people think entry (i.e. buying at the right time) is the key to a system being successful and making money. You buy a stock at the right time and then you hold it and watch the stock appreciate. In other words, the buy-and-hold strategy that wall street teaches us. A look at the last decade should be enough to convince anyone that buy and hold does not work. Unless you were born in 1932, 1949, 1974, 1982, or 2003 and were of sound mind and body to even actually buy stocks, then you’re chances of being able to make money from buy-and-hold were slim. 5 times in the last 80 years buy-and-hold would have actually worked very well. Those are miniscule odds. You are better off develop a system that is about making desired profit targets in a 6-24 month time frame, and cut your losses quickly if it doesn’t work out. My advice on developing a system would be to spend as much time on your exits as your entries and you will probably end up being profitable in the long run, and that’s really the name of the game. Making money over time.

Wednesday, 27 January 2010

World News

World News: Seems as though the IPO of UC Rusal did not go as planned. This development shouldn’t be surprising since most IPO collapse in their first year of trading. Also, the possibility of IPOing at the crest of a big wave down in the market is terrible timing. I am still observing the market activity over the past few days, and there are key signs that this decline might be something more. I am hearing chatter that the market declines in the US are linked to the defeat of Martha Coakley by Republican candidate Scott P. Brown. The experts say this is significant because Democrats maintained that position for 46 years. (Quite a long time) Now, the Democrats are scrambling to make sure the keep their remaining seats in the upcoming elections. How will they do this? By going after the bad guys. Who are the bad guys? The Banks. The Banks would could do no wrong (and even if they did, the taxpayer would bail them out) are now getting turned on by President Obama and the Democrats. This seems to be one of the prevailing theories of the market decline. I have got a simple enough answer. The markets are going down because people are selling and there is no one left to buy. Period. The markets worldwide had been overbought for the last 5 months. If anyone took the time to notice, when all the world government started announcing they were coming out of their recessions the market barely rose. Some markets are no better than they were 4-5 months ago. So all the good news comes out but the markets do nothing. Toyota is getting their reputation bashed because of a 2.3 million car recall. I believe they had a 4.3 million car recall just before that. I guess they have a lot of production issues currently. I wouldn’t really worry too much about that. They are the #1 car maker in the world, and sometimes you have setbacks. Ma Zhaoxu, Foreign Ministry spokesman, warned the Obama administration that giving guns, missiles, and helicopters to Taiwan will damage their economic and political ties. I would think so. I have been noticing a lot of squabbling between the US and China of late. That’s what happens when a new superpower emerges. I heard a good quote from a play that I recently attended. Something about the United States flourishing on individualistic capitalism but the new century will be China’s, and that will be predicated on state (or collective) capitalism. You should maybe check out the play for yourself. The play is called the Power of Yes being shown at the National Theatre. So if you are in London sometime soon, check it out. It’s a kind of step by step explanation of the financial crisis.

Monday, 25 January 2010

Learn To Trade

by Niki Arinze

Learn to trade: Continuation patterns – Continuation patterns are patterns that form when price takes a pause (i.e. trades sideways, choppy, or moderately pulls back) in the contrary direction of the major trend. It is also important to try and recognize what the major trend is so that when pause periods occur, you don’t mistake them for actual changes in trend. Take a look at CREE. We can see that CREE was in an uptrend from March. It moved up for three months and then had a gap day 5-27-09. If you were watching this stock, there was no need to rush in. Stocks ALWAYS (and I do mean ALWAYS) provide an opportunity to get on board of a trend. Sometimes you have to wait longer than others. The period from June through the middle of July was that time. You will see the a-b-c zigzag I drew to signify one of the continuation patterns that I think works very well. The time to go in was after the MACD crossed over in mid July. This continuation pattern provides an initial entry point or an additional entry point (if you got in back in March) to add to a position to take advantage of the uptrend.

Saturday, 23 January 2010

Weekly Wrap: Your source for stock, stock market, and stocks info

Weekly Wrap: The market is feeling the heat right now. I know some bears are finally feeling some relief after actually believing they might be crazy. Some of them even believe the party is over. I am skeptical of it until I start to see the market pick up on the down side. It's long overdue and about time that market participants come back to their senses about the prospects of recovery in the economy. Japan Airlines entered bankruptcy earlier in the week. It is Asia's top carrier. It is an example of an organization which tries to sustain itself with massive amounts of debt. First Solar, a alternative energy company, signed a contract to build 22 megawatts of solar power plants in New Mexico. I have got my eye on First Solar (FSLR) because I think they will be the Exxon (XOM) of the future for the alternative energy industry. Bank of America said they lost more money than expected. No surprise there. That bank has real financial troubles that most of the public is not privy to. Also, I think I heard a quote from Bill Miller (fund manager at Legg Mason) that he was in there buying and he would buy more a few weeks ago. No coincidence that Legg Mason got blasted this week. Maybe investors are tired of seeing massive losses from his value investing strategy. No disrespect to you value guys but they are just pieces of paper. Price IS the only thing you can trust, and when it’s going down. There is no need to get in front of that train. Most of the fervor this week is coming from President Obama's proposal on banning proprietary trading. Interesting, we'll see how far that goes. Most of the sell-off to end the week was blamed on Obama's new plan, but in reality the stock market was rising on fumes. Lots of stocks just ran out of steam, and people decided to sell.

Market Pulse: Your source for stock, stock market, stock trades, and stocks info

Market Pulse: The last 3 days have been a phenomenal sell-off in which the S&P 500 has lost 5.1% from the intraday highs on Jan. 19. It took 3 days for the S&P 500 to lose 58+ points. After a relentless rise since the March lows, I would say that there may be a change in character taking place in the market. I have been saying since March that the bear market rally has been getting long in tooth and we were due for a reality check. Maybe this is it. I don’t know. I actually thought it was in late August, then I thought it was in late October, and then after the market rallied again. I didn’t know what to think, but I am not willing to pay high mark up prices for stocks in general. Now, we may be at the biggest juncture in the market since March 2009. Take a look at the chart of the S&P you will see two sets of dotted red lines. These lines signify the intraday high and low of the first 3 days of the month. This is a strategy I developed after reading the book, The Logical Trader, in which he talks about the first 20 minutes of the trading day being the high or low for the day about 17-23% of the time. So I thought why can’t this be applied to a month? I did a little research and found out that a lot of the time the first 3 days of a month can determine the high or low for the MONTH. So, to see which way an individual stock or index will move, just watch the first 3 days of the month and it may give you a GOOD idea. Try it out yourself. Look at the first 3 days of every month since the March lows and see if it marked the high or low for that month. The results might astonish you that it could be that simple. Now, back to the chart. You can see that the low for the month (Jan. 4) has been significantly breached. That is a potential warning sign for a change in trend because prior to the last 3 days the low for the month had been put and the market was moving up, albeit slowly. Now it’s plunged through on high volume, which indicates selling pressure. Market leaders like AAPL, GOOG, ASIA, JOYG have been getting bashed over the last several days. When the market leaders start to crack, it’s another clue that the trend may be changing. Another technical clue is the MACD has turned down, which is more confirmation of a change in momentum. The optimism just 3 days ago was above levels we saw in 2007. With this sharp break in the market, we shall see if it dents all the optimism about a recovery or this is start of the bear market I have been anticipating for the last 5 months.

Thursday, 21 January 2010

Monday, 11 January 2010

Did You Know?

China has now moved in front of the US as the world's largest auto market.

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