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.”

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