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Posts tagged ‘Investing’

Wealthbuilder Market Brief 1st March 2013 (Christopher Quigley)

By: Christopher Quigley

What a market. Even the most experienced traders  that I know are having a difficult time getting a handle on what is happening.  Wednesday’s market action caught a lot of folk napping. Monday’s 216 point drop in the Dow Industrials  convinced many that finally the much anticipated market “correction” had  arrived.

The slight “uptick” on Tuesday was a classic VIX buy  signal but it turned out to be a trap. Those traders who shorted the market on  the 26th were pulverized by the bullish 175 Dow point move on the 27th.

What can we make of such whiplash moves?

For me, regardless of the economy, the movement of  the market is understandable when you assess it through the paradigm of Dow  Theory. The market is powering forward because technically it is very strong.  This strength was first indicated by the 128 point breakout in the Dow  Transports on the second of January. Prior to this the Dow 20 had traded within  a trading line for nearly a year. It was perfectly clear to Dow Theory  aficionados that the momentum and the direction of any breakout from this “range  line” would be highly significant. The 307 point follow through move on the Dow  Industrials on the same day as the Trannies breakout confirmed the trend. With  Dow Theory  “ a trend once in place  continues until both indices confirm otherwise”. Nothing has happened in the  last few days to alter this January bull move. Thus the correct trading  strategy at the moment is to go long on pullbacks not short “potential” tops.

full report Wealthbuilder Market Brief 1st March 2013

Market Forging Higher, Not Yet Warning of a Top

By Sam Collins

One of the remarkable technical events of the past 12 months is the breakout and blast-off of the Dow Jones Transportation Average. On Tuesday, the index set a new all-time high after breaking from a 10-month consolidation in early December.

RSI is somewhat overbought, and Tuesday’s spike to new highs could lead to some profit-taking. But the momentum of this remarkable performance is usually predictive of a better-performing economy, and thus, a pullback in this or any index should be viewed as a buying opportunity.

Conclusion: Despite the lack of volume, stocks appear headed to new highs, boosted by better-than-expected retail sales and the anticipation of a better economic climate. Even the breakdown of the most influential technology stock of the decade (Apple), the fiscal cliff, and the threat of a U.S. bond default have failed to stop the advance………….

full article at source: http://investorplace.com/2013/01/daily-stock-market-news-market-forging-higher-not-yet-warning-of-a-top/?sid=KE8137&cp=OZDT&ct=201301116&cc=eletter&en=4524897

Surprise! Spain Makes The Same Ass-Backwards Mistake That The US and UK Made – Banning Shortselling

By ReggieMiddleton

Spain has crossed the rubicon, and entered into bad decision nirvana as it too decided to ban short selling, which has worked so well for all of those other smart countries which have done so. For instance, when the US did it in 2008, they helped their bank’s shares float to the tune of -48%! Hey, with friends like that, who needs enemies. When will they learn that tempering/tampering with financial markets is not ever as good as it sounds. Keep in mind that short sales put a natural floor under weak securities by creating natural sellers at the end or a trade (whether the trade is successful or not). If the stock is truly overvalued (hear’s to you European banks), then the shares are going to drop anyway as the holders of those shares sell to get out of them. Without shorts, there will be no buying on the way down as speculators and astute investors cover profitable short sales and the only bids you will get are at rock bottom where fundamental guys feel there “deals that can’t be refused” (except for the occasional BTFD fools along the way). That is usually a bid that’s much higher than would have been achieved through the short sale. Of course, nobody explained this to the Spanish

full article at source: http://boombustblog.com/blog/item/6126-surprise-spain-makes-the-same-ass-backwards-mistake-that-the-us-and-uk-made-banning-shortselling

Treasuries and Derivatives Blow Up? So Where Do You Go …

By Anthony Wile (Daily Bell)

Here’s some interesting news along the lines of “man bites dog.” According to a recent Reuters article, US financial advisors are actually growing leery of US Treasury bonds.

This is almost unheard of and one could certainly make a case that it is a sign of most unsettled times. Ordinarily, financial advisors, especially those in the US, are disposed to provide Treasuries for most every ill.

They are seen as repositories of value, security and liquidity – and this perspective has been preached relentlessly to the average US consumer.  And yet now we now find a much different perspective, being reported by Reuters:

It’s the newest market riddle: where do you go for safety when the traditional option could be in a bubble?

With fiscal problems in Europe once again leading to sharp drops in global stock markets, many investors are seeking out stable assets that can both protect their principal and generate an income stream to keep up with inflation.

full article at source: http://www.thedailybell.com/3883/Anthony-Wile-Treasuries-and-Derivatives-Blow-Up-So-Where-Do-You-Go

Market up-date and trading news

Today was a nice day in Lubeck the sun was a little slow coming out but when it did it was great.I have noticed to price increases on petrol here and folks in Ireland beware ,this is what you local garage prices are going to look like very soon.

Trading up-date.

Since my last trade update I have gone into and out of BAC making profits  on the way up but loosing on the protection puts (845.00$) I see this as a necessary cost of doing business however the net picture is an overall gain  as of  today’s action alone  1200$ and when I count the rest of the month I recon we have a net gain of 3782$.This is for six days trading so far this month (March) As I am not in the market everyday and I have to wait until the market presents an oppertunityfor me !.( Remember you dont have to be in the market all the time.) .I am currently heavy on the put side now for a quick test of the 8.50 on BAC, But I expect it (BAC) will go for the 9.63 mark first and meet resistance .

With the profits on the stock side (now ,again 1600) plus 10 call contracts on the may 9 strike We are in for a few dollars more ! I am using these profits to purchase the put 9 strike in May which are now dirt cheap, and I have until may for an eventual 8.50 pullback to be right  .If I am wrong the continued rise in the stock should help me counter losses in the puts by purchasing more calls or puts whichever way the market goes on the day .The most important thing is to match any move the market throws at you (Massage you trades to counter any potential loss) until the trade is in a strangl and it wont matter which way the stock goes after that, your are on a win win trade then!

 Remember allways be hedged!  Good trading!

Bank of America stock (up-date on trading)

Trading up-date with Machholz

Well my friends we are losing our shirts on our protective puts and there is no more value but time now, however we have as a result of the Bank of America stock ( Total stock 3500 )movement up from a purchase price of $5.01- $5.15  we are experiencing a very healthy profit and to offset any losses in these puts total gains for month so far is approx **$9,875 +$ 672 to offset the losses on the puts.

All in all a nice months work and this should pay for my rent in Lubeck for the coming year! Nice one!

Have purchased new protective 8$ puts up until April Just in case the bottom falls out of the market

Remember always be hedged I am still holding on to my  stock as I believe we have a way to go but if I am wrong I make a few bob on the way back down !But I think we are going to see at least a move up to the 200 MDA and maybe beyond!

 

**This includes all trades that includes other stock and option trades not highlighted in trading posts.

Trading with Machholz

Well those of you that were waiting for our first instalment of up-dates on my trading I have the current January trades to announce.

Dec : Entered 3 contracts  (calls) on the 5 and 6$ BAC these were Jan Calls and we were under water for the last two weeks with losses of 1200$

As of last Friday sold out of said contracts with a net gain of 89% on one contract, a 37.5% net  gain on the second contract and a break even on the third contract.

Reason for sale .The approach of expiry (never hold options up to expiry)

Entered 2 Feb contracts BAC( puts) at the strike of 5 and 6$

Currently under the water but will be averaging down in the next few days as I believe we will have a catalyst by way of earnings we are gaining as the stock price goes up and we should be able to make a few bob as the stock retreats back on or before earnings .Either way we have until Feb. 15th to be able to make on the puts .

Bought 500 shares of BAC at $5.01 .Current price is 6.20$.

we are heading up to the top of the current pivot point around 7.50$  before a return to test the recent lows  (4.91$) In any case I am Hedged and so I only need the stock to move to make money ! If we get ther before the expiry date in Feb, I will treat myself to a trip to Paris !T

Overall profit target for January has already been achieved.

I hope to announce the start of a new trading course in the coming months for my German Friends.

Golden rules to keep in mind!

As always wait for the market to present an opportunity.

Don’t just place trades because you think you should be in the market.

Capital preservation is paramount.

Never put on a position without been Hedged.

Give yourself enough time to become right.

Place small trade amounts that will not break the bank

Remember you may have to wait to get a better pricing for your hedging so have at least the same amount value contracts as you have in chosen asset.

Use only in the money options

Watch volatility and remember you need to buy low volatility.

Buying options is like buying ICE they waste away in value from the moment you buy them.

For my system to work you need to have a volatile oversold asset that you want to buy and hold for at least two years .So our up and coming course on (An  Introduction To Technical Analysis )would be a good start for any would be trader !

Machholz

Bear Market Remains Probable

By: Tony_Caldaro

The week started off with a meltdown in Europe. They lost 4.35% on monday
while the US markets were closed. When the US market opened on tuesday, it
gapped down losing about 3%, made the low for the week, rallied nearly 6% from
that low, then ended the week with another meltdown in Europe (-3.20%) closing
about 1% above the low for the week. Economic reports for the week were sparse
with positives edging out negatives four to threeOn the plus side: ISM
services, consumer credit, the trade deficit and wholesale inventories all
improved. On the negative: weekly jobless claims rose, and both the monetary
base and the WLEI declined. For the week the SPX/DOW were -1.95%, and the
NDX/NAZ were -0.35%. Asian markets lost 2.4%, Europe was -3.9%, the Commodity
equity group slid 1.8%, and the DJ World index lost 3.3%. This week we have a
plethora of economic reports and it’s Options expiration week.

LONG TERM: bear market highly probable

We have been posting every day, for some time now, “bear market highly
probable”. What this means is that we suspect we are in a bear market, by the
wave patterns, but it has not yet been confirmed by OEW’s quantitative
analysis. The March 2009 to May/July 2011 bull market unfolded in five
quantified waves. This is quite clear. We have counted these waves as five
Primary waves, expecting this first bull market off the Mar09 Supercycle low to
be of a Cycle wave degree. Historically Cycle waves can last anywhere from one
(1973-1974) to thirty-three years (1974-2007). The shorter ones are typically
bear markets, and the longer ones bull markets.

New Blog posting from David Mc Williams called The future: tax the rich

David mc Williams has a new posting

By David Mc Williams

The captain of the universe, known as Captain Copycat, runs an investment fund called Copycat Partners LLP, registered in the IFSC but run out of a swanky office in St James in London.He is having a taxing week.Copycat Partners’ investment strategy is to copy what the next lad does and thus make money.When the market is going up, Captain Copycat buys assets and rides the wave. Copycat’s behaviour obviously reinforces the upward market momentum.In contrast, when the market is going down Captain Copycat sells everything aggressively, using simple gambling tools known as ‘put options’.

This in turn pushes the market down further.

full article at source here:http://www.davidmcwilliams.ie/2011/08/22/the-future-tax-the-rich?utm_source=WebsiteSubscribers&utm_campaign=9ed9ed1084-Weekly_Roundup_10_August_2011&utm_medium=email

Stock Market Warning Signs

By: Toby_Connor

We are now fast approaching the period when the next crisis should arrive.

On average the stock market suffers a major correction about every four years. In a secular bear market that cyclical trough arrives as the economy sinks into recession and a stock market bear bottoms out.

The last four year cycle bottom formed in March of ’09. That just happened to be the longest four year cycle in history. I’ve noted before that long cycles are often followed by a short cycle that compensates for the extended nature or the prior cycle. If that’s the case then the next four year cycle low is due sometime in 2012. (My best guess is in the fall.)

As we are still in a secular bear market then the move down into the four year cycle trough should correspond to another economic recession and cyclical bear market for stocks. Bear markets tend to last about a year and a half to two and a half years. If the next four year cycle bottoms in the implied timing band then the current cyclical bull should be topping soon.

As a matter of fact the stock market is already flashing warning signs. Three of the largest and most important sectors in the S&P have not confirmed new highs.

Another warning sign; Despite record earnings the market has only been able to move to marginal new highs and is now in jeopardy of reversing the recent breakout.

I’ve noted in the past that this is how major tops and bottoms are often established. Smart money sells into the breakout, or buys the break down in the case of a bottom. The trend then reverses and a major turning point is formed. Both the ’02 bottom and the ’07 top were put in this way.

The market is now at risk of a similar event as we’ve experienced a marginal breakout to new highs that is threatening to fail. Don’t forget this is happening against a back drop of record earnings.

When a market can’t move higher on good news something is wrong. And don’t forget bull markets don’t top on bad news, they top on good news.

If the market can recover and move to new highs the cyclical bull will be confirmed, but if the market continues to fade and drops back below the March 16th “tsunami” bottom it will constitute a failed intermediate cycle. If both the Dow and the Transports close back below that level we would have a Dow Theory sell signal and that would confirm the next leg down in the secular bear has begun.

It would also be a signal that the economy was unable to handle the spiking food and energy costs that were the direct result of Bernanke trying to prop up the financial system with his printing press. Like I said, printing money has never been the answer. Every empire in history has tried this approach and not one of them has ever succeeded with it. We won’t either.

full article at source:http://www.marketoracle.co.uk/Article28156.html

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