Friday, December 18, 2009
In the U.S., consumer spending represents about 70% of GDP. After decades of an inflationary “crack-up” boom, people are stuffed to the gills with consumer debt. But it appears that its long build-up has turned down, which is a message businesses should heed.
Many consumer businesses have already received the new message of our times: Consumers want value for their money. The days of widespread upper-end fashion and lavish dining are largely relics of the past. Don’t believe me? Take a look at charts of bebe Stores (BEBE), Abercrombie & Fitch (ANF), Morton Restaurant Group (MRT) and Ruth’s Hospitality Group (RUTH). Consumers’ changing preferences are reflected in their charts, but we’re most likely only at the forefront of decreased consumption!
A review of the past 30 years of debt/disposable income and debt service payments in the chart below shows that they still remain at elevated levels (courtesy of Gary Shilling’s Insight www.agaryshilling.com). Back in 1982, consumers averaged 60% debt-to-income and debt service payments were only 10.5% of disposable income. We witnessed a substantial rise in debt from 1994 through 2006, but that trend has been in reverse for several years now:
It’s important to note that in a recession disposable income usually declines. So, in order to return to a more normal level of debt-to-income, four forces should hamper business’ ability to get inside of consumers’ wallets:
1. Consumers earn less, which means they reduce consumption.
2. Consumers stop accumulating debt, which means they reduce consumption.
3. Consumers pay down debt, which means they reduce consumption.
4. Consumers start saving, which means they reduce consumption.
The massive U.S. unemployment numbers also create an interesting dynamic. Typically when one loses a job, debt will initially ramp up as the unemployed use debt to offset the lost income. But for many, the loss of a job becomes a life-changing event: Their attitude towards debt in general and the desire to consume begin to wane. So while there may only be 15 million officially unemployed, there are many more that have gone through the unemployed experience lately, which should dampen their desire to consume for years.
Will we return to the early 80s and early 90s level of debt-to-income ratios? Or will it be even worse this time? Imagine the levels of corporate bankruptcies and job losses that would accompany a decline to below a 60% debt-to-income ratio. That would mean that consumers would reduce their outstanding debt by half. Such a scenario is one of the reasons why we at EWI believe that the current recession is not over yet -- and, in fact, believe that it has only just begun.
Click here to read more about Currency and Interest Rates Specialty Services.
Thursday, December 17, 2009
Forex Metatrader4 Software Automated Trading Expert Advisors Alerts Forecasts Robots Signals Free Demos
My friends mother lives in Moscow. My friend calls her mom often, and every once in a while the conversation turns to the economy, specifically, the strength of the U.S. dollar. Usually this happens when the dollar gets weaker. Their conversation goes something like this:
Mom: Everyone says the dollar is crashing. On TV they show lines at the banks where people are trying to exchange their dollar savings for euros or rubles.
Son: Mom, we talked about this. Every single time you've told me about these panics before, the dollar rebounds and surprises everyone. Don't you remember?
Mom: Yes, I remember, but everyone says it's different this time.
I once heard that there are more $100 bills in circulation in Russia than the rest of the world combined, including in the U.S. Don't know if it's true, but I believe it. Ever since the end of the Soviet Union, Russians have stored their wealth in dollars; later, in euros. The ruble has regained a lot of respect in recent years, but even today, nobody in Russia refuses dollars.
Last time my friends Mom and him had that conversation was in November. At that time, the dollar sentiment was so negative that polls showed dollar bulls in the single to low-double digits. Forex traders, analysts, the mainstream media, the public, they all believed it was doomed. There was even talk of pricing crude oil in something else and replacing the dollar as the world’s reserve currency.
Yet, despite all the crash-and-burn forecasts, on November 26, the USD turned up and so far, in terms of the EUR/USD (the most widely-traded forex pair) has gained over 600 pips. Here's what it looks like on the daily EUR/USD chart (copied from Elliott Wave International's intensive Currency Specialty Service Dec. 15 forecast):
In the weeks prior to the November bottom, EWI's Currency Specialty Service told subscribers over and over again that short dollar position was getting crowded, for two reasons:
1. The U.S. Dollar Index fell in five waves since March 2009. The buck also fell impulsively against currencies like the euro and Swiss franc. If you know Elliott, you understand what that means: A completed five-wave pattern implied a strong and surprising (for most people) reversal ahead.
2. Increasingly negative market sentiment right before the low.
Now that the dollar has gotten stronger, the question is, is this a major turn or just a correction on the way to lower lows?
You can get the answers now with our Currency Specialty Service. You get full coverage of the dollar, the euro, the yen -- 9 major currency pairs in all -- right now on the intraday and longer-term time frames. Click here to start.
Wednesday, December 16, 2009
Chris Rowe's Internal Strength Option Trading System Free Video
It's options expiration this week, and as usual volatility should be increasing.
Increased volatility can be a option traders fortune or mis-fortune if the options expire worthless.
Many option trading strategies that investors traders use have limited risk but also have limited profit potential. An option transaction generally requires less capital than an equivalent stock transaction, and thus return smaller amounts, but a potentially a greater percentage of the investment than the equivalent stock transaction. Increase or decrease the capital amount used with options to increase or decrease the total potential return. Using and managing financial leverage using options.
Although options may not be the best investment for most investors, they are some of the most flexible investment choices today. Depending on the option contract, options can protect or enhance the portfolios of many different kinds of investors traders in rising, falling, and neutral markets.
Click Here for Option Trading Education Training Courses Seminars Webinars Workshop Strategies Systems.
Click here for the Free Webinar "Shifting Risk with the Simulated Index Concept" 12/16/2009 9:30 pm EDT
Webinar Description: If done properly, options can be a big part of long term investing. If you have a nest egg that you don't feel comfortable subjecting to stock market risk, but also want to have the potential for a better rate of return than current fixed income, this webinar is for you. This strategy does involve risk and it will be discussed in great detail. Join Mike Tosaw of Know Your Options as he discusses his views on shifting risk, yet maintaining as much return as possible to suit the needs of an individual investor.
Good day and good options trading!
Tuesday, December 15, 2009
By Robert Prechter, CMT
The following article is adapted from a special report on "Popular Culture and the Stock Market" published by Robert Prechter, founder and CEO of the technical analysis and research firm Elliott Wave International. Although originally published in 1985, "Popular Culture and the Stock Market" is so timeless and relevant that USA Today covered its insights in a recent Nov. 2009 article. Click here for the rest of this revealing 50-page report here.
Popular Culture and the Stock Market
Both a study of the stock market and a study of trends in popular attitudes support the conclusion that the movement of aggregate stock prices is a direct recording of mood and mood change within the investment community, and by extension, within the society at large. It is clear that extremes in popular cultural trends coincide with extremes in stock prices, since they peak and trough coincidentally in their reflection of the popular mood. The stock market is the best place to study mood change because it is the only field of mass behavior where specific, detailed, and voluminous numerical data exists. It was only with such data that R.N. Elliott was able to discover the Wave Principle, which reveals that mass mood changes are natural, rhythmic and precise. The stock market is literally a drawing of how the scales of mass mood are tipping. A decline indicates an increasing 'negative' mood on balance, and an advance indicates an increasing 'positive' mood on balance.
Trends in music, movies, fashion, literature, television, popular philosophy, sports, dance, mores, sexual identity, family life, campus activities, politics and poetry all reflect the prevailing mood, sometimes in subtle ways. Noticeable changes in slower-moving mediums such as the movie industry more readily reveal changes in larger degrees of trend, such as the Cycle. More sensitive mediums such as television change quickly enough to reflect changes in the Primary trends of popular mood. Intermediate and Minor trends are likely paralleled by current song hits, which can rush up and down the sales charts as people change moods. Of course, all of these media of expression are influenced by mood changes of all degrees. The net impression communicated is a result of the mix and dominance of the forces in all these areas at any given moment.
It has long been observed, casually, that the trends of hemlines and stock prices appear to be in lock step. Skirt heights rose to mini-skirt brevity in the 1920's and in the 1960's, peaking with stock prices both times. Floor length fashions appeared in the 1930's and 1970's (the Maxi), bottoming with stock prices. It is not unreasonable to hypothesize that a rise in both hemlines and stock prices reflects a general increase in friskiness and daring among the population, and a decline in both, a decrease. Because skirt lengths have limits (the floor and the upper thigh, respectively), the reaching of a limit would imply that a maximum of positive or negative mood had been achieved.
Five classic horror films were all produced in less than three short years. 'Frankenstein' and 'Dracula' premiered in 1931, in the middle of the great bear market. 'Dr. Jekyll and Mr. Hyde' played in 1932, the bear market bottom year, and the only year that a horror film actor was ever granted an Oscar. 'The Mummy' and 'King Kong' hit the screen in 1933, on the double bottom. Ironically, Hollywood tried to introduce a new monster in 1935 during a bull market, but 'Werewolf of London' was a flop. When filmmakers tried again in 1941, in the depths of a bear market, 'The Wolf Man' was a smash hit. These are the classic horror films of all time, along with the new breed in the 1970's, and they all sold big. The milder horror styles of bull market years and the extent of their popularity stand in stark contrast. Musicals, adventures, and comedies weave into the pattern as well.
Pop music has been virtually in lock-step with the Dow Jones Industrial Average as well. The remainder of this report will focus on details of this phenomenon in order to clarify the extent to which the relationship (and, by extension, the others discussed above) exists.
As a 78-rpm record collector put it in a recent Wall Street Journal article, music reflects 'every fiber of life' in the U.S. The timing of the careers of dominant youth-oriented (since the young are quickest to adopt new fashions) pop musicians has been perfectly in line with the peaks and troughs in the stock market. At turns in prices (and therefore, mood), the dominant popular singers and groups have faded quickly into obscurity, to be replaced by styles which reflected the newly emerging mood.
The 1920's bull market gave us hyper-fast dance music and jazz. The 1930's bear years brought folk-music laments ('Buddy, Can You Spare a Dime?'), and mellow ballroom dance music. The 1932-1937 bull market brought lively 'swing' music. 1937 ushered in the Andrews Sisters, who enjoyed their greatest success during the corrective years of 1937-1942 ('girl groups' are a corrective wave phenomenon; more on that later). The 1940's featured uptempo big band music which dominated until the market peaked in 1945-46. The ensuing late-1940's stock market correction featured mellow love-ballad crooners, both male and female, whose style reflected the dampened public mood.
Learn what's really behind trends in the stock market, music, fashion, movies and more . . .
Read Robert Prechter's Full 50-page Report, "Popular Culture and the Stock Market," FREE.
Robert Prechter, Chartered Market Technician, is the founder and CEO of Elliott Wave International, author of Wall Street best-sellers Conquer the Crash and Elliott Wave Principle and editor of The Elliott Wave Theorist monthly market letter since 1979.
Monday, December 14, 2009
This Week in the Markets
Equities might trend higher this week and may even hit a new high for the year with big market players starting the holidays early as usual. This week the Fed holds its final meeting of the year, and inflation data, industrial production, jobless claims and housing reports will dominate the economic news. This Friday is quadruple options expiration which could and should add a bunch of volatility into the situation. The recent better economic news could raise fourth quarter GDP forecasts, but there’s more pessimism out there, but it seems no one is ready just yet to make the big short sell bet. The key thing to always consider is what is the future to be like? Next quarter, next year, and beyond. Get that right, and the money will follow. My best suggestion is go where the strength is, and be ready move fast when the trend changes direction.
The Most Important Global Economic Reports This Week
Tuesday: Euro-Zone & German ZEW Surveys, USA PPI Producer Price Index
Wednesday: Australia GDP Gross Domestic Product, USA FOMC Rate Decision
Thursday: Bank of Japan Interest Rate Decision, New Zealand Business Confidence
My Stock Pick This Week
Is a semiconductor manufacturer for consumer products and applications. The stock chart is showing a good low-risk high-reward potential trade setup currently, so I’m selling it short. Their earnings estimates look like crap. The only bright spot looks to be possibly in June of 2010 where they might get a positive quarter of earnings.
Sell Short International Rectifier – Ticker IRF
Sell Entry: 20.17 to 20.95
Stop-Loss: 20.96 or Higher
Take Profit Areas: 19.59 to 18.49, 17.91 to 17.58, 17.27 to 16.95, 15.70 to 15.41, 12.50 to 12.26
International Rectifier Company Profile
International Rectifier Corporation engages in the design, manufacture, and marketing of power management semiconductors. Its Power Management Devices segment provides discrete power MOSFETs for use in power supply; automotive; and notebook, industrial, and commercial battery powered applications. The company’s Energy-Saving Products segment offers HVICs, digital control ICs, micro-electronic relay ICs, motion control modules, and IGBTs for washing machines, refrigerators, air conditioners, fans, pumps, compressors, various lighting products, and consumer applications. Its HiRel segment provides RAD-Hard power management modules, power MOSFETs, ICs, and DC/DC converters, as well as other power components that address power management requirements in satellites, launch vehicles, aircraft, ships, submarines, and other defense applications. The company’s Enterprise Power segment offers low-voltage ICs, including XPhase and SupIRBuck; iPOWIR integrated power stages; and low-voltage DirectFET Power MOSFETs that focus on data center applications and communication infrastructure equipment end markets. Its Automotive Products segment provides automotive qualified HVICs; intelligent power switch ICs; and power MOSFETs, including DirectFET and IGBTs for various automotive customers and applications. The company’s Intellectual Property segment designs and develops value-added products for licensing. Its Transition Services segment offers transition services, including wafer fabrication, assembly, product supply, test, and other manufacturing related support services. The company primarily serves original equipment manufacturers, distributors, and contract manufacturers. It operates in the United States, Asia, and Europe. The company was founded in 1947 and is based in El Segundo, California.
Click here to review and trial the Trading Software we used in determining our sell short position on IRF.
Click the International Rectifier Stock Chart for a larger view.
Friday, December 11, 2009
Click here to give yourself and others Investing Trading Gifts for Christmas
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Knowledge > Dated Goals > Plan > Action > Success
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Thursday, December 10, 2009
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Monday, 11:07 AM
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Wednesday, December 09, 2009
Thursday, December 10th - 4pm Eastern
Forex Income Engine 2.0 Home Study Course with Private Coaching
We're nearly sold out, so to kick things off and help fill the next class, I'm going to hold a special "Kickoff Webinar" to teach some of my core trading principles, introduce you to one of my senior trading coaches, give away another copy of the course, and a TON MORE...
(I have some other surprises in store for you, too, so you DON'T want to miss this!)
To claim your "virtual seat", please register below. There is a technical limitation of how many traders can attend at the same time, so make sure you register now and then show up a few minutes early to make sure you get in the room before it locks you out.
Click here to register for your free virtual seat.
Good Trading Bill Poulos
Monday, December 07, 2009
Last Week in the Market
Last Friday’s USA unemployment report showed that only 11,000 jobs were lost in November, and then the US dollar rocketed. First, do you believe the number, and second is it important? One month of economic data does not make a trend. The real trend for USA unemployment for the last year has been up, starting at about 6.5% in October 08 to the 10% it is now. In real terms I would suggest the USA unemployment rate is 15% to 20% and will stay that way for quite some time.
Economic Indicators Leaders or Laggards?
Economic indicators don’t lead the market, they lag them, which is contrarian to many a point of view from amateurs to professionals on Wallstreet . People lead the markets with the beliefs about the markets. They trade their beliefs about the markets whether they are beginner investors, fund managers or pro traders.
Unemployment GDP and the Decoupling Effect Theory
With all that in mind it’s hard for me to see any drivers for stock and commodities prices to continue higher with unemployment as high as it is, and the very real risk of GDP slowdown. I suggest that stocks are headed lower, much lower, and the US Dollar is on a rebound now for at least a year or maybe longer. Also, Asia is still growing, but if there’s a significant downturn in the US market as I predict, the rest of the world including Asia could be included. The decoupling effect is a nice theory, and I’m one to actually want to believe in, but in reality, I have yet to see it yet. In this age of globalization, virus and disease spreads fast and quick so be ready for that possibility so you don’t get killed.
My Stock Pick This Week is the Dow Jones Industrials Index
I think the Dow is at the beginning of a major downturn. In fact a downturn that could take out the March 2009 lows. The S&P500 and the Nasdaq have yet to show similar price action with the suggestion that higher prices are possible near term. We will have to wait and see how this plays out during this week and the end of this month, but the markets are at some critical junctures here to say the least. The markets have been churning and going nowhere for weeks. There’s no leadership to speak of, and investors seem to moving to the highest quality stocks currently. If they already have been that could explain why the S&P500 and Nasdaq have not moved higher recently.
I think we are near the end of this bear market rally that started in October 08, and stocks, precious metals, commodities are headed lower, with the dollar headed higher. Did I mention deflation? No, but I think it’s very possibly coming. The US dollar is headed higher because everyone was shorting it, and gold was the upside recipient of it and now the covering begins it seems.
I’m guessing the DOW, S&P500, and the Nasdaq have a Santa Clause rally, and the market possibilty turns down after that. We shall see.
Click here to review and trial the Trading Software we used in determining our sell short position on the Dow Index.
Click the Dow Jones Industrial Index Chart for a larger view.
Friday, December 04, 2009
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Thursday, December 03, 2009
You'll Discover The Direction of the Market -- Before the Rest of the World Finds Out -- in Our Trend And Condition Section!
Have you ever found yourself wondering why the market has been moving higher or lower? No more!
With CRISS you'll gain a true understanding of the direction of the market, allowing you to know whether you should be bullish or bearish.
You'd think every financial professional and investor would know how to accurately determine market strength. But you'd be wrong if you believed that.
Turn on the TV and the radio, and what's the main financial news of the day? It's whether the Dow is up or down, and how many points it rose or fell.
The Dow Jones is what the "Joe Investor" uses to identify the market's trend and risk. But it's a highly inaccurate indicator. Not only is the Dow Jones average disproportionately price weighted ... but it is based on only 30 stocks!
You could turn to the S&P 500 to get a clearer picture of the market's internal strength. But again, watch out.
The S&P 500 is based on 500 stocks, not 30. But the biggest 50 stocks make up half the weight -- and contribute to half the index's movement. So tracking the S&P 500 doesn't give you a fair picture of where the market is heading, either.
In the CRISS course, I reveal the only way I know of to truly gauge the market's inner strength, direction, and risk ... and believe me, it has nothing to do with watching the Dow or S&P 500.
You'll Always Know Which Sectors to Invest in -- And Why -- When You Study the Relative Strength Section!
Once you discover the direction of the overall market, it's not good enough just to put your money in stocks or take it out. To make the absolute most money possible, you need to know which sectors are strongest (and weakest), so you can squeeze every last dollar in profits out of the market's move, whether it's up or down.
Also notice that some sectors can be much more volatile than others. Look at how the oil stocks moved like a roller coaster while leisure stocks moved up and down rather, well, leisurely.
In the CRISS course, I show you EXACTLY how to calculate the relative strength of the 10 broad stock market sectors, 50 more specialized stock market sectors, and countless other subsectors. Being able to narrow down your opportunities will be easy, and will greatly increase your odds of trading in the strongest bull markets (and the weakest bear markets, if you'd like to double your profit opportunities).
Utilities ... tech stocks ... oil and gas ... biotechnology ... health care ... consumer products ... gold and precious metals ... manufacturing ... all market sectors are inter-related in ways the average investor doesn't understand -- but you will, once you complete this section of the CRISS home-study course.
You'll Discover Which Individual Companies to Trade -- and EXACTLY When to Get In and Out -- in the Charting Section!
Ultimately, the most valuable indicator of where a stock is going is price.
Everything the market knows about the stock -- revenue growth, P/E, book value, net current assets, earnings per share -- is reflected in the price, which is the value the market assigns to the stock at the moment.
That's where my proprietary combination of charting techniques can help you find stocks whose share prices are likely to climb ... and time entry and exit points for both stock and option trades.
With charting, we look at price movements in our stocks over short periods of time: days, hours, even minutes.
Here is where momentum comes into play. You've heard traders say, "The trend is your friend." In the CRISS Course, you'll discover EXACTLY HOW to spot chart formations that indicate a stock is about to break out of a pattern ... and move much higher, or much lower.
Money Management. In these lessons, I show you how to maximize your trading profits and manage your investments for greater safety and higher gain.
* How to profit from both the bull side and bear sides of the market.
* The best places on the Web to pick stocks.
* How to flip the risk/reward ratio of investing in your favor.
* How to use options contracts to leverage your investments and mitigate your downside risk.
* How to collect monthly income on all your stock positions -- even those not paying a dividend.
* How to always be on the right side of the market.
Click here to get your VIP Backstage Pass to the Launch Event
Wednesday, December 02, 2009
Flexible Forex Trading During Breakfast
We've just reviewed Part 3 of Bill Poulos's new Forex training video series. This one is very cool, and very unique. It shows a "live" recording of Bill trading during breakfast using his new "Flexible Forex" trading method.
Click here to see it:
This is a live, 5-minute chart of the EUR/USD Forex pair with Bill eating his breakfast as he implements a trade.
When you watch the video, imagine yourself in his shoes and what it would be like. Ask yourself if you can see yourself trading this way. I think you'll agree that the flexibility the forex market and Bill's trading method is pretty nice, especially if you're inexperienced & have little time to invest trade the market full-time.
Here's What You'll Learn
How to complete a Forex trade during breakfast, from entry to exit, all before your day even begins.
The 3 levels of learning, & how you can own this 'Flexible Forex' method for life & help yourself and your family.
How to get your hands on these step-by-step 'Flexible Forex' training videos before anybody else, and much more.
After Bill released Part 1 of his new Forex video training, his office continues to get bombarded with emails asking things like:
* Is there a way to get more details on this method?
* Are you going to release more training?
* How can I get started?
Bill is going to reveal all the details of this trading method in his flagship home study training course he calls:
"The Forex Income Engine 2.0"
Bill originally planned on releasing this in January as a way to kick off the new year, but because of so many requests, he decided to move it up and plans on releasing the entire course next tuesday, December 8th.
Free Forex Income Engine Copy
Bill's going to give away the very first copy of the Forex Income Engine 2.0 to one lucky trader next week.
Click here for all the details on how to join the free giveaway. Just go the Video 3 page here, and follow the link after you watch the video.
Tuesday, December 01, 2009
Super Trader Summit December 3-5
Peak Performance 203 Dec 6-7
Bear Market Workshop Dec 9-11
Our Super Trader program is the ultimate program for traders who are committed to becoming their best.
The mission of the Super Trader program is a total transformation of your trading and your life. It requires a substantial commitment of time and money. Over the program's two year period, you can expect to make dramatic improvements in your trading. Regardless of your previous trading experience, you and I will create a customized curriculum and objectives for your program.
Super Trader Program Entry Requirements
To enter the program, you will need to have completed the Peak Performance 101 Workshop. You will also need my approval based on either a personal interview or a letter of commitment.
Super Trader Program Structure
I have recently restructured the Super Trader program around a series of learning modules. Some of the modules are considered core topics and are required, while others are optional. Depending on the experience, desires, and objectives of the individual, I, along with the Super Trader candidate will craft a two-year curriculum of modules and other specific topics. The following are some of the modules you may complete while in the Super Trader Program:
Peak Performance: consisting of 15 individual lessons (15-30 weeks)
Transformational Meditation: to be done with Libby Adams’ course (5 weeks)
Happiness and Self-sabotage (8 weeks)
Trading Business Plan Development (8 weeks)
One module for each of our workshops.
Position Sizing (4 weeks)
Some of these modules are complete (i.e., the Peak Performance Lessons). Some are just questions Van will ask you (i.e., the position sizing modules, the workshop modules) and some are still in development (i.e., the happiness self-sabotage module will be available after the Super Trader Summit in December 09).
What You Can Expect to Accomplish (If you are willing to commit and really go for it)
First, you’ll be asked to become very familiar with the terminology we use. This means that you should understand the material in Trade Your Way to Financial Freedom very well. In addition, you should read the Tharp Concepts section on our web site and make sure you understand all of the terms, plus the on-line glossary.
Next we ask you to get yourself really clear psychologically. You should have already attended the Peak Performance 101 Workshop. You should immediately go through the Peak Performance Home Study course and take the Advanced Peak Performance 202 Workshop. If you have already completed the Peak Performance 202 course, you should sign up for Libby Adams’ 28-day course at this time.
I include Libby’s course as part of the Super Trader program because I want you to be able to quickly solve or completely avoid the psychological problems that come up in normal day-to-day life. Libby Adams’ 28-day course helps people do this better than any other program that I have ever seen. Van Tharp Institute clients who have completed Libby’s program rave about the personal insights they gained and the personal mastery skills they acquired.
When you are ready, I will ask you to go through the 15 lessons of the Peak Performance Module for Super Traders. Each lesson will take at least a week to complete. People who have gone through this process think it is life changing; it clears out most of the issues that prevent people from making profits. Currently, these lessons are available to Super Traders only.
You’ll have finished this section when you can document five life changing issues that have changed for you through the program. Does this mean that you only have five? No it doesn’t, but I believe that once you’ve documented five to my satisfaction that you’ll be able to handle other things that come up during your trading.
Next we’ll need to make sure that you really understand the key factors in system design. We suggest that you read Trade Your Way to Financial Freedom, and Safe Strategies for Financial Freedom, complete the How to Develop a Winning Trading System That Fits You Home Study Course and attend the Blueprint and Systems workshops, as well as more advanced “strategy” type workshops.
Even if you are trading profitably when entering the program, you may be asked to stop trading until I see that you have met certain criteria. When you think you are ready, I’ll do a trading knowledge evaluation. This will test your understanding of the fundamental issues of trading/investing success. You’ll be expected to demonstrate a basic understanding of how to use position sizing to meet your objectives (i.e., you must complete the position sizing module to receive my blessing for you to trade).
Next, you’ll develop a trading business plan. The Blueprint workshop will provide the basic template for you to follow, but we’ll give you templates to follow and the material from your two evaluations that will really help you. I will consult with you on the business plan until both you and I are happy with it.
The trading plan will also contain strategies you’ll be using during the next few years. If you are already using successful strategies, then we’ll help you improve them. If you don’t have any strategies, then I will offer suggestions for how to create them. We’ll even point you toward resources to help you with system development (not part of the program) if you feel you need technical assistance with programming software.
You also have access to the Super Trader Trading System Playbook, which is reviewed and updated each year at the Super Trader Summit. Here, we explore all of the systems that the Van Tharp Institute teaches in detail. The Summit is an ongoing effort to look at trading systems and how well they work under different market conditions. During the Summit, you’ll also get access to new, planned workshops (if any) before they are introduced to everyone else. You might find that attending the Summit for two years alone is well worth the cost of the program.
There’s Much More . . . Good Trading Dr. Van K Tharp
Click Here For More Information Registration on the Super Trader Summit December 3-5
Peak Performance 203 Dec 6-7
Bear Market Workshop Dec 9-11
Monday, November 30, 2009
The Markets Last Week
US stocks commodities dropped last week as bonds and the dollar gained over the Dubai debt crisis. Mohammed El-Erian of Pimco says the Dubai problem is a “correction” while Dennis Gartman says the Dubai problem has “legs” for further downside. Our take, it could be a setup for a much larger decline moving forward. We do think Asia is in the best position currently to weather further global economic storms with its decent to robust growth and other factors, but global financial contagion can infect the rest or the world very easily. The decoupling effect of global financial markets is a nice theory, and I would even like to believe in it, but I have yet to see it clear evidence of that yet, although it could very well be in the works as I’m writing this. The keyword here is pay attention and be ready to move into or out of positions to protect yourself.
The Markets This Week
Dubai is the big story currently. The stock market this week could be more volatile with Dubai trying to reschedule its billions in debt now. The November USA jobs report will be of key interest to see if the economic recovery is sustainable or not. Australia and European Union interest rates decisions are of key importance also.
Important Global Economic Reports This Week
Monday: Canada Gross Domestic Product, and Australia Manufacturing Index.
Tuesday: Australia Interest Rate Decision & RBA Commodity Index. Switzerland Gross Domestic Product. German Unemployment Change. USA ISM Manufacturing.
Thursday: European Central Bank Interest Rate Decision and Euro-Zone Gross Domestic Product.
Friday: Canada Unemployment Change
My Stock Pick This Week
Is a buy long position on a satellite TV operator. The chart is positive with the trend up in a 3rd wave advance which is the longest wave of the 5 waves in the Elliott Wave count. Fundamentally it’s a rearview mirror mixed picture with their third-quarter net income increased marginally to $366 million and earnings per share climbed 12% to 37 cents, boosted by a lower share count. Revenue grew 10% to $5.5 billion. DirecTV's gross margin declined from 50% to 49%, but its operating margin remained steady at 13%. A quick ratio of 1.1 demonstrates adequate liquidity. The stock has rallied 40% this year already. Short interest has risen 14.2 percent to 136,331,890 shares. The stock trades at a price-to-earnings ratio of about 25, a premium to the market and cable and satellite peers currently. They do not pay any dividends. This stock currently presents a nice low-risk high-reward opportunity in my opinion. In case the price heads lower, stick to stop-loss.
Buy Long DirecTV – Ticker DTV
Buy Entry: 28.58 to 32.30
Take Profit Areas: 35.81 to 36.50, 39.40 to 40.16
DirecTV Company Profile
The DIRECTV Group, Inc. provides digital television entertainment in the United States and Latin America. It operates in two segments, DIRECTV U.S. and DIRECTV Latin America. The DIRECTV U.S. segment provides direct-to-home (DTH) digital television services, as well as multi-channel video programming distribution services in the United States. As of June 30, 2009, the segment had approximately 18.3 million subscribers with access to channels of digital-quality video pictures and CD-quality audio programming. It distributes approximately 2,000 digital video and audio channels, including basic entertainment and music channels, premium movie channels, regional and specialty sports networks, Spanish and other foreign language special interest channels, pay-per-view movie and event choices, and national high-definition television channels. This segment also provides premium professional and collegiate sports programming, such as the NFL SUNDAY TICKET package, which allows subscribers to view the NFL games. The DIRECTV Latin America segment provides DTH digital television services in Latin America and the Caribbean, including Puerto Rico. As of June 30, 2009, PanAmericana and Sky Brazil had approximately 4.17 million subscribers and Sky Mexico had approximately 1.79 million subscribers. The DIRECTV Group, Inc. has a strategic partnership agreement with Qwest Communications International Inc. to offer DIRECTV services to residential customers. The company was founded in 1977 and is based in El Segundo, California.
Click here to review and trial the Trading Software we used in determining our buy long position on DTV.
Click the DirecTV Stock Chart for a larger view.
Thursday, November 26, 2009
Virtual Stock Market Games for Fun or Real Money
First Happy Thanksgiving!
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Wednesday, November 25, 2009
Currency Forecasts - Intraday Daily Weekly Monthly
Glance at the recent news headlines, and it might feel like the world is ending for the U.S. dollar. Take a look at this sample line-up:
* US investors abandon the falling dollar to buy stocks (The Times)
* Dollar Slump Persisting as Top Analysts See No Bottom (Bloomberg)
* WORLD FOREX: Dollar Declines As Investors Embrace Risk (Wall Street Journal)
But "feels" is one thing -- and the reality of the situation is quite another. If you haven't recently seen a chart of the EUR/USD, the world's most watched (and traded) exchange rate, take a look at this November 23 chart from EWI's intensive Curency Specialty Service:
Despite the near-panicky headlines, you can see that for most of November the EUR/USD has gone sideways! Yes, big swings up and down -- but almost zero net progress, so far. In the words of EWI's president Bob Prechter,
"The headlines this month are all about the weak dollar, but they should be about how the dollar is hardly falling any more despite ubiquitous bearish opinion about it." (November Elliott Wave Theorist; online now.)
To find out what this sideways price action implies for the dollar short-term, read the latest EUR/USD intraday and daily forecasts inside Currency Specialty Service now.
Click here for the Currency Specialty Service
Tuesday, November 24, 2009
Free 42-Page eBook: Find Trading Opportunities With Fibonacci
Elliott Wave International has just released a free 42-Page eBook, How You Can Identify Turning Points Using Fibonacci. Created from the $129 two-volume set of the same name, it’s available free until November 30, 2009. Learn more.
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Monday, November 23, 2009
The Market Week Ahead
First Happy Thanksgiving! Be thankful for everything you have now and everything you want for the future. Amen
Second, this Friday is the USA Canada, and Germany Unemployment Reports, along with Australia and European Union Central Bank Interest Rate decisions are coming in. Thanksgiving week historically has been strong. Even with the important data reports coming in this week, but with the shortened trading week, it could be somewhat relatively calm with big players starting the holiday early. The dollar is still the big issue right now. Forex traders might be watching the stock market, and stock traders might be watching the forex market for direction clues. The tide could possibly be turning here for a reversal, and possibly a major one at that for the dollar and stocks for the time being. I’m looking for a dollar rebound and stock selloff this month or next. Let’s watch and be ready to move it does.
Important Economic Data Reports This Thanksgiving Week
Monday: Canada GDP Report. Australia Manufacturing Index Report
Tuesday: Australia Central Bank Interest Rate Decision, and Commodity Index Report. Switzerland GDP Report. German Unemployment Report. USA ISM Manufacturing Report.
Thursday: European Central Bank Interest Rate Decision. Euro-Zone GDP Report
Friday: USA & Canada Unemployment Rate Reports
My Stock Pick This Week
Is sell short on a USA Coal producer. Even with commodities strong right now, I believe we will be seeing lower demand and prices sometime soon. This company is capitalized at $1.3B with 68% owned by insiders, with an 8% dividend. The dividend is a plus, and possibly the insiders large holdings is a plus, but watch if the insiders start selling big. Between February, 2008, and September 2008, insiders were all sellers between 27 and 24 prices. They sold before the biggest down-leg of the market started in October 2008, so I would suggest to watch the insiders like a hawk. Long term this company products are a buy, but look for lower prices to buy in longer term. Right now, I see a low-risk high-reward sell-short trade setup on it. Stick to stop-loss in case the price keeps going up.
Sell Short Alliance Holdings – Ticker AHGP
Sell Entry: 23.64 to 23.00
Take Profit Areas: 22.36 to 21.08, 18.68 to 18.11, 17.59 to 17.05
Alliance Holdings Company Profile
Alliance Holdings GP, L.P., through its subsidiaries, produces and markets coal primarily to utilities and industrial users in the United States. It produces a range of steam coal with varying sulfur and heat contents. As of December 31, 2008, the company operated 8 coal mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia, as well as operated a coal loading terminal on the Ohio River at Mt. Vernon, Indiana. It also had approximately 686.3 million tons of coal reserves in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, the company leases land and operates a coal loading terminal, with a capacity of 8.0 million tons with ground storage of approximately 60,000 to 70,000 tons, on the Ohio River at Mt. Vernon, Indiana. Further, it engages in trading of coal, as well as offers services, including ash and scrubber sludge removal, coal yard maintenance, and arranging alternate transportation services. Alliance GP, LLC, serves as the general partner of Alliance Holdings GP, L.P. The company is based in Tulsa, Oklahoma.
Click here to review and trial the Trading Software we used in determining our sell short position on AHGP.
Click the Alliance Holdings Stock Chart for a larger view.
Friday, November 20, 2009
Click here to review Jim Rogers book.
From Wall Street to Guangdong Road, one hot-button issue is taking the financial airwaves by storm: The bull in China's economic "shop." And, according to the mainstream majority, the recent slew of positive data suggests this horned beast is here to stay. Off the top are these third-quarter 2009 stats: A 16.1% leap in China's industrial production, a 16.2% increase in retail sales, and a strong rise in GDP to 8.9%. In the words of one November 11 CNBC report:
"The underlying growth story is a real one. China is now experiencing what the United States did during the Industrial Revolution. It's like the only successful story in the global economy. It's like the locomotive pulling the globe..."
Does that sound familiar? It should.
Two years ago, in the third quarter of 2007, China's industrial production also stood high: at 18%. During the same period, China saw a powerful 16.4% rise in retail sales (a five-year high), and 11.5% GDP (a 13-year high).
Then, as now, the usual experts hitched their bull market bandwagon to the positive "stars" in China's economic galaxy. Here is a statement from a major Chinese official published in an October 25, 2007 New York Times: "The macroeconomic controls this time around have not only effectively prevented the economy from transitioning from speedy growth to overheating... but at the same time have not resulted in a sharp downturn."
Yet -- do you remember what happened to the Shanghai Composite Index then? The chart below vividly illustrates what started that very month. In short: "a sharp downturn" (higlighted in red).
The market plunged 70% into the two-year low in November 2008.
A First-Hand Look at China's Bull Market: The latest Asian-Pacific Financial Forecast includes a special, in-depth 4-page essay on China's long-term growth prospects.
Click here to get the exclusive report today, risk-free.
Clearly, China's robust "fundamentals" did not save Chinese stocks two years ago. So what? Who cares? -- say many officials today. This isn't 2007. Things in China are different. Well, they're absolutely right. This isn't 2007. It is different. Two years ago, the main fear of China's monetary officials was that the easy lending environment would cause an unsustainable asset bubble. Their concern was justified, as new loans in China stood near their highest level in four years.
Flash ahead to 2009: New loans in China exploded off the charts to their highest level ever. See for yourself, as the November 2009 Asian Pacific Financial Forecast captures the credit-crazed scenario with this compelling picture (Elliott wave labels erased for this article):
And, as the November Asian-Pacific Financial Forecast reveals: In the first five months of 2009, one-fifth of the new loans issued in China went to stock market investment.
Now that's something to think about.
Subscribe now to get the full story today, absolutely risk-free.
Thursday, November 19, 2009
Is Your Bank Safe? Click Here for This Free Complimentary 10-Page Report
Is Your Bank Safe?
More than 130 banks will have failed by the end of 2009. What if your bank fails? Did you know you could be left in the lurch for days, weeks, even months before you get your money back from the FDIC? What happens if the FDIC can't cover your funds? How do you find a safe bank to protect your deposits right now? Find answers to these questions and more in the original "Safe Banks" report from Elliott Wave International. Learn more and download your free report now..
Please read the following Bloomberg news item carefully. It has a direct impact on the safety of your money.
Sept. 24 (Bloomberg) -- In May, the FDIC said it was projecting $70 billion of losses during the next five years due to bank failures. The agency said it expects most of those collapses to occur in 2009 and 2010.
The FDIC’s problem is that it didn’t collect enough revenue over the years to cover today’s losses. The blame lies partly with Congress. Until the law was changed in 2006, the FDIC was barred from charging premiums to banks that it classified as well-capitalized and well-managed. Consequently, the vast majority of banks weren’t paying anything for deposit insurance.
Of course, we now know it means nothing when the FDIC or any other regulator labels a bank “well-capitalized.” Most banks that failed during this crisis were considered well-capitalized just before their failure.
By the end of 2009, more than 130 banks will have failed. Most depositors will have little clue their bank was even at risk. Worse yet, the string-pullers in Washington are doing everything in their power to hide information about the safety of your bank from you.
So far, the FDIC has had enough money to cover insured depositors. But that money is quickly running out.
Just last week, the FDIC voted to mandate early payment of insurance premiums to help cover at-risk banks. Here's what the Associated Press reported on Thursday, Nov. 12:
WASHINGTON (AP) -- U.S. banks will prepay about $45 billion in premiums to replenish a federal deposit insurance fund now in the red, under a plan adopted Thursday by federal regulators.
The Federal Deposit Insurance Corp. board voted to mandate the early payments of premiums for 2010 through 2012. Amid the struggling economy and rising loan defaults, 120 banks have failed so far this year, costing the insurance fund more than $28 billion.
Worse yet, three more banks failed the very next day, Friday, Nov. 13.
This is a very real problem and a direct threat to your money. It's more important now than ever to personally ensure the safety of your bank. The free 10-page "Safe Banks" report from our friends at Elliott Wave International can help.
Inside EWI's revealing free report, you'll discover:
* The 100 Safest U.S. Banks (2 for each state)
* Where your money goes after you make a deposit
* How your fractional-reserve bank works
* What risks you might be taking by relying on the FDIC's guarantee
Please protect your money. Download the free 10-page "Safe Banks" report now.
Learn more and click here to download the "Safe Banks" report.
Wednesday, November 18, 2009
"World stocks in modest pullback as dollar flies"
LONDON — World stocks fell modestly Tuesday . . . while the dollar rallied after the heads of the U.S. Federal Reserve and the European Central Bank attempted to talk the currency up.
That was the opening paragraph of an Associated Press article posted on Tuesday morning (Nov. 17). The U.S. dollar gained strongly on Tuesday; by lunchtime, the EUR/USD (the exchange rate between the dollar and the euro; the most widely traded forex pair) moved lower by some 150 points (or pips).
The central bankers themselves appeared to confirm the news story: The Fed's chairman Bernanke said on Monday they were watching currencies markets to "help ensure that the dollar is strong"; the ECB's Trichet said that Bernanke's statement was "very important."
Apparently, forex traders interpreted both comments as bullish for the dollar... but if you've been watching the EUR/USD's Elliott wave patterns, you didn't have to wait for the morning news to tell you that.
The day before the U.S. dollar took the upper hand, Elliott Wave International's Intensive Currency Specialty Service posted the following daily forecast for subscribers:
Update For: Tuesday
Posted On: Mon, 16 Nov 2009 21:49:51 GMT
EURUSD Last Price: 1.4974
[Rolling over] Key Levels: 1.5051. If the decline from 1.5051 is impulsive, ending in a failed fifth wave, the rebound from Friday is a deep correction. The proximity to the prior peak a means the risk associated with a bearish view is minimal. A decline below 1.4880 would bolster the bearish outlook...
If you're new to Elliott, here's what that means. Wave patterns subdivide into two major categories: impulses and corrections. Impulses are 5-wave moves that indicate the direction of the larger trend. Corrections are 3-wave affairs that go against the trend. As the chart above shows, the decline in the EUR/USD from the $1.5051 looks impulsive, and the rally off $1.4823 -- corrective. So what should have come next was the resumption of the larger trend -- in this case, down.
And that's exactly what we saw in the 150-pip drop on Tuesday. To find out if this is just a temporary blip or a start of something big for the dollar, click here to read the latest Currency Specialty Service forecasts online now.
Tuesday, November 17, 2009
The following article is provided courtesy of Elliott Wave International (EWI). For more insights that challenge conventional financial wisdom, download EWI’s Free 118-page Independent Investor eBook.
Large banks and more recently pension funds have suddenly become infatuated with gold. They chant the mantras that gold bugs have known for years: gold is a store of value; owning gold is financial insurance; an ounce of gold will always buy a good suit. The idea is that if the economy continues to weaken and share prices decline, a strategic allocation of the precious metal will hedge and offset some of the losses in the financial sector.
On the surface it seems to make sense and it’s hard to argue with the logic. Even so, logic can sometimes get twisted, whereas facts cannot. The evidence is found in the chart we describe as “All the Same Market.” Gold, stocks, currencies (versus the dollar), oil, grains, meats, softs, all decline in a deflationary environment. As liquidity dries up and credit contracts, people, businesses, and institutions sell everything to get dollars. Cash is once again king. This is bearish for gold.
Looked at another way: as the dollar advances from its lows, things denominated in dollars lose value against the dollar. As long as the dollar remains the global senior currency, assets will depreciate: not just stocks and commodities but residential and commercial property, works of art, collectible cars, pretty much everything. Of course, this outlook presumes a deflationary environment and that’s been our view for quite some time. But that’s another conversation. The topic here is stocks down/gold up - or not.
The long-time editor of the Elliott Wave Financial Forecast Short Term Update, Steven Hochberg summed it up succinctly in a recent issue:
“The other important aspect to a dollar bottom is the implication to all the other markets that have been moving opposite to this senior currency. The start of a major dollar rally should roughly coincide with a turn down in stocks, commodities, oil and the precious metals. So there are likely to be important trend reversals across nearly all major markets.”
Don’t fall into the trap of group-think. If investing was that easy we’d all have (insert your own private fantasy).
For more information, download Robert Prechter’s Free Independent Investor eBook. The 118-page resource teaches investors to think independently by challenging conventional financial market assumptions.