Wednesday, September 30, 2009

Do You Take Your Trading Seriously Quiz

Van Tharp Institute
Do You Take Your Trading Seriously? Take this Quiz to Find Out.

By Van K. Tharp, Ph.D.

Click Here For Dr Van Tharp's 2009 Trading Workshops Schedule

We’ve had a lot of interest lately in our two year Super Trader program. More people are taking their investment education seriously and preparing themselves just like they would in any other profession. They don’t want to be average investors or traders who constantly lose or fail to outperform the market. Instead, they want to be Super Traders. Is this you?

In my new book, Super Trader: Make Consistent Profits in Good and Bad Markets, there is a short quiz that I reprinted here.

1. Do I treat my trading/investing like a business? Have I prepared for it like a business?

2. Do I have a business plan—a working document to guide my trading business?

3. Do I identify and address my mistakes regularly (a mistake means not following my rules)?

4. Am I following a regular procedure to prevent mistakes?

5. Do I have a tested system? Do I know its System Quality Number™?

6. Do I know how that system will perform in different kinds of markets?

7. Do I know what kind of market we are in now? Do I know what to expect from my system in such a market?

8. When it’s not expected to do well because of the market type, do I stop trading it?

9. Do I have exit points preplanned for every position I currently have in the market?

10. Have I developed specific objectives for my trading?

11. Do I understand that I achieve my objectives through a position sizing (TM) algorithm? Have I developed a specific position sizing algorithm to meet my objectives?

12. Do I understand the importance of the above points?

13. Do I understand that I create my own investment results through my thinking and beliefs? Do I accept responsibility for that creation?

14. Do I regularly work on myself to make sure that I follow the above points?

Circle all of the responses that are true for you. If you have not circled at least ten of the fourteen, then you are NOT taking your trading seriously. Your financial health is in danger. It just shows you how much work you need to do. And if you are a beginner, then I strongly recommend that you read the Super Trader book as a starting point.

If you are past that point and are really serious about becoming a Super Trader soon or down the road, then I recommend that you enroll in our upcoming Super Trader teleconference. The teleconference will start on Monday September 28th at 8 PM with the all-important topic of “Working on Yourself.” But this teleconference is not just one day—it’s in a series format spread over five days. Each day will include an hour of packed information related to becoming a Super Trader plus time for your questions.

Here are the five topics:

1) Working on Yourself (developing a solid core)

2) Developing a Business Plan to Guide Your Trading/Investing

3) Understanding Market Type and Developing Core Systems to Fit Each Market Type

4) Knowing Your Objectives and Using Position Sizing to Meet Your Objectives

5) Learning How Efficient You Are and Using the 12 Tasks of Trading to Eliminate Mistakes

I’ll spend the full hour plus with you on each session, so you’ll be getting at least six hours of my time in these teleconferences. My hourly rate for private consulting is $1,000 per hour.

RJ Hixson, our Vice President of Research and Development, will also be a part of this teleconference. RJ understands these topics thoroughly because he’s been through them and has completed the Super Trader program. I consider him to be a mentor to our current Super Traders, and he’ll be a mentor to you on this teleconference. You’ll be getting at least six hours of RJ’s time in these teleconferences, as well.

In addition, I expect that about ten of our current Super Trader candidates will also be listening into this teleconference. They can give you their feedback about what it’s like to be going through these steps right now.

So just based upon what I’ve told you, what do you think this teleconference might be worth? Just based on my consulting time with a small group, we might price it at $6,000. And when you add the expertise of everyone on the call, it might be worth something like $10,000. But the teleconference is not $10,000. We’re charging only $399 for it—that’s less than $80 per hour.

Also, we have a special deal running right now: you can attend the teleconference for only about $180. That’s less than half price. And you can do your friends a big favor in the process. All we ask is that you buy 10 copies of the Super Trader book. Keep one and give the rest to your friends or work colleagues. Your friends and colleagues will appreciate you even more, and you’ll help nine or ten of them gain insight about becoming successful with their accounts. Click here for details of this offer.

About Van Tharp: Trading coach, and author, Dr. Van K. Tharp is widely recognized for his best-selling books and his outstanding Peak Performance Home Study program - a highly regarded classic that is suitable for all levels of traders and investors. You can learn more about Van Tharp at the Van Tharp Institute

Tuesday, September 29, 2009

Free Online Options Course

Ron Ianieri Options Trader
Profit With An Insider Without Breaking a Single Law

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Click here to review and register for free for the Options GPS.

Monday, September 28, 2009

Weekly Stock Pick

Buy Sell Hold
The Market Week Ahead

First, US Employment Rate Report is Friday. October is almost here. This bear market rally looks like it’s ready to reverse once they take the bull off the stage. S&P500 going to 400 like some say and I think? Europe is releasing bank stress test results. There’s talk that the US Fed might start raising rates sooner than later. I’ve been saying all along, we have not seen the lows for stocks or real estate prices yet. I see them much lower in the years ahead. Then again I could be wrong. The market always shows the way through its fear and greed social mood.

Important Data Reports This Week

Monday: Germany and Japan Consumer Price Index.

Tuesday: UK GDP 2nd Quarter, US Consumer Condidence, and Japan Industrial Production.

Wednesday: Australia Leading Index, Retail Sales and Credit. New Zealand Business Confidence. Australia Wage Agreements. Euro-Zone Retails Sales. Japan Housing Starts. Germany Unemployment. Euro-Zone Consumer Price Index. US ADP Employment. Canada GDP. US Personal Consumption. US GDP. Japan Tankan Survey.

Thursday: Euro-Zone and UK Purchasing Managers Index. Euro-Zone Unemployment Rate. US Personal Income. US Personal Consumption. US Initial Jobless Claims. US Pending Home Sales and Construction. Japan Jobless Rate.

Friday: The mother of all financial reports. US Non-Farm Payrolls Unemployment Rate

My Stock Pick This Week

Is a sell on another US REIT or Real Estate Investment Trust. In the last two months I’ve put sells on two other USA REITS. Last week it was a sell on MGM Mirage Las Vegas where they have the highest foreclosure rate in the nation. What can I say about my position? It’s all been said. The bubble of century has taken down the house that created it all because they forgot to watch over it properly, and now here we are. You could call it the biggest Ponzi Scheme in history so far. I wouldn’t even be a buyer of foreclosures at supposedly current fire sale prices because I think they are headed lower with the unemployment rate heading higher. I say let everything collapse, and start anew with different fiscal policy this time or be dammed to live it again, or let your children deal with it. By letting it collapse, it’ll be the best in the long term. It’s easier and cheaper to build new than it is to rehabilitate an old structure.

Sell Short Lexington Corporate Properties Trust

Sell Entry: 5.99 to 5.32

Stop-Loss: 6 or Higher

Take Profit Areas: 4.65, 3.98 to 3.31, 2.35 to1.90

Lexington Corporate Properties Trust Company Profile

Lexington Corporate Properties Trust operates as a self-managed and self-administered real estate investment trust (REIT). The company acquires, owns, and manages a portfolio of office, industrial, and retail properties net-leased to corporate tenants in the United States. It also provides investment advisory and asset management services to institutional investors in the net lease area. As of June 30, 2005, the company operated 185 properties and managed 2 properties. Lexington Corporate Properties Trust has elected to qualify as a REIT for federal income tax purposes. As a REIT, it would not be taxed on the portion of its income, which is distributed to shareholders, provided it distributes at least 90% of its taxable income. The company was founded in 1991 and is based in New York City.

Click here to review and trial the Trading Software we used in determining our short position on LXP.

Click the Lexington Corporate Properties Trust Stock Chart for a larger view.

Friday, September 25, 2009

How a Kid With a Ruler Can Make a Million

A Lesson in Drawing and Using Trendlines

The following article is adapted from a brand-new 50-page ebook from Elliott Wave International. Learn more about The Ultimate Technical Analysis Handbook, and download your free copy here.

By Jeffrey Kennedy of Elliott Wave International

When I began my career as an analyst, I was lucky enough to have some time with a few old pros.

One in particular that I will always remember told me that a kid with a ruler could make a million dollars in the markets. He was talking about trendlines. I was sold.

I spent nearly three years drawing trendlines and all sorts of geometric shapes on price charts. And you know, that grizzled old trader was only half right.

Trendlines are one the most simple and dynamic tools an analyst can employ... but I have yet to make my million dollars, so he was wrong -- or at least early -- on that point.

Despite being extremely useful, trendlines are often overlooked. I guess it’s just human nature to discard the simple in favor of the complicated.

(Heaven knows, if they don’t understand it, it must work, right?)

Soybean Futures Chart

In the chart above, I have drawn a trendline using two lows that occurred in early August and September of 2003.

As you can see, each time prices approached this line, they reversed course and advanced.

Sometimes, soybeans only fell to near this line before turning up.

Other times, prices broke through momentarily before resuming the larger uptrend.

What still amazes me is that two seemingly insignificant lows in 2002 pointed the direction of soybeans -- and identified several potential buying opportunities -- for the next six months!

Get more lessons like the one above in the free 50-page Ultimate Technical Analysis Handbook. Learn more and download your free copy here.

Thursday, September 24, 2009

U.S. Dollar: Global Punching Bag No More

“When everyone gets on the same side of the boat, the result is inevitable.” D. R. Barton, Jr. Van Tharp Institute of Trading Mastery

Click here for Dr Van Tharps 2009 Trading Workshop Schedule

There have been many anecdotally famous instances of popular and widespread opinion moving so far to one side that a reversal of an extreme trend was bound to follow.

I still remember watching CNBC in the fall of 2002 when Maria Bartiromo made her famous comment from the floor of the NYSE along the lines that she was hearing indications that there was a lot of short selling going on. While Bartiromo’s comments weren’t the catalyst of the market turn, they were indicative of the common wisdom that once an idea hits the mainstream media, the trend is near its end.

The same thing happens in the general public. I wrote an article last year in June talking about seven different and unrelated people that had spoken to me about the price of oil or gas. These were not financial people; these were folks at grocery stores and schools. The market topped in a matter of weeks.

Lately, in the financial press, the declining dollar is making headlines everywhere, though the buzz is not so high among the population in general. Nobody has approached me recently with concerns about this because most Americans don’t feel directly the decline of the dollar in their day to day lives—unless they travel abroad.

To find out if the falling dollar headlines of late are a measure of popular sentiment and a possible trend reversal indicator, I needed to get input from a group of people who might know and care about the dollar’s relative value.

O Canada, How Concerned You Are About Investing in the U.S.

Every year, we have a large number of Canadians that attend our workshops. (As a quick aside, is there a friendlier group of people on the planet? I think not. Conde Nast magazine agrees: they ranked Canada at the top of the list of friendliest countries to visit in the world. Yet I digress.)

In the recent months, I have had no fewer than half a dozen personal requests from Canadians asking about hedging their investments in U.S. instruments. And it’s little wonder; since the March highs, the dollar has gone from $1.30 for every Canadian dollar down to just $1.07.

And when that many people start to ask about the dollar’s movement, it’s time to gear up for a move back in the other direction.

While it’s no secret that the U.S. dollar is at the whipping post of almost every media pundit, some of the smartest folks I know are now actively looking for the right timing to invest in exactly the opposite direction—dollar strength.

This is probably not a multi-year reversal. Rather it reflects research that shows many of the factors that have weakened the dollar over the past six months are now diminishing. Along with that, the natural rhythm of ups and downs will take the dollar back up.

Smart Guys, Great Analysis, Useful Conclusions

In March of this year, my best friend and business partner Christopher Castroviejo introduced me to a friend of 25 years, Marshall Auerback. Marshall is one of the owners of the RAB Capital hedge fund group.

Over a dinner of spectacular food and wine, I immediately knew that the depth of intellect as well as the breadth of knowledge at the table was something that few people get to experience in their whole life.

Christopher, Marshall and I traversed subjects from bonds to gold to crude to domestic and global markets. And then we were into U.S. and global governmental policy and stability. We diverted to wine and fine foods. And we topped it off with some talk of football, baseball, basketball and golf. All of these diverse subjects were taken to a level of depth and detail that is hard to believe. These guys are wicked smart and extremely well read.

So when Marshall or Christopher has to something to say, I always listen closely. And when they’re both on the same side of a financial issue, one would be ill advised to be on the other side for very long.

This brings me back to the dollar. Marshall wrote such a well-reasoned and concise piece on the dollar this week that I wanted to share the highlights with you. The bottom line is that he’s looking for a dollar rally soon.

* For the current recession, the decline in the U.S. Gross Domestic Product (GDP) has been much smaller than in the European or Japanese GDP.

* Some members of the Federal Open Market Committee (FOMC) are expected to launch a campaign in favor of ending the Fed’s highly accommodating emergency policy stance. This would mean marginally or significantly higher interest rates in U.S. over time, which would lead to a stronger dollar. Just the anticipation of this being made widely known would be a strong net positive for the dollar.

* Speculation that the dollar is being used as a funding source for an interest “carry trade” is absurd. (The carry trade means borrowing a low interest currency to invest in currencies paying higher interest and pocketing the difference). If this trade were happening, it does not describe what is happening with dollar relative to lower yielding currencies (e.g., the Yen or the Euro, which has slightly higher short-term rates and slightly lower long-term rates).

Marshall concludes with this a great summary that I’ve paraphrased here: My experience is that when extreme sentiment reverses and there is a new simple story at hand, trending bandwagon markets can reverse in a quite violent way.

Marshall is the first to agree that the timing on this trend reversal is a touchy matter; it could be today, it could take weeks or more to develop. But when extremely smart and successful money managers give us such well-reasoned thoughts, it usually pays to listen.

About D.R. Barton, Jr.: A passion for the systematic approach to the markets and lifelong love of teaching and learning have propelled D.R. Barton, Jr. to the top of the investment and trading arena. He is a regularly featured guest on both Report on Business TV, and WTOP News Radio in Washington, D.C., and has been a guest on Bloomberg Radio. His articles have appeared on and Financial Advisor magazine. You may contact D.R. the Van Tharp Institute of Trading Mastery

Wednesday, September 23, 2009

MTPredictor launches brand new v6.5

MTPredictor Trading Software
MTPredictor Ltd., the UK firm specializing in risk-control financial trading software, has confirmed that its brand new standalone v6.5 analysis software is now on full public release.

MTPredictor Ltd., the UK firm specializing in risk control software for financial traders, has confirmed that its brand new standalone analysis software, v6.5, is now available on general release. Representing a major programming advance, v6.5 enables customers to find trade set-ups and control the risk on both live, intraday charts and daily/weekly charts in the same software package. V6.5 is state-of-the art tab/workspace-based software which serves the needs of both short-term swing traders and long-term position traders alike.

Real-time, intraday traders now have the choice of powering v6.5 with a streaming, live datafeed from new MTPredictor industry partner DTNiQFeed or the long-established partner eSignal. In addition, they can now use the full set of MTPredictor risk tools previously available only in v6.0 to find risk-controlled trades real-time.

The brand new real-time Scanner cuts search time down by finding and alerting traders automatically to low initial money risk set-ups. The 5 main automatic MTPredictor set-ups can be identified with a visual and audible alert.
Different markets can be kept in dedicated workspaces, for example helping the trader keep forex trades separate from futures trades.

MTPredictor’s automatic risk/reward analysis, Position Sizing tools and trade management targets are all available real-time in v6.5, for a disciplined trading process.

The powerful Elliott Waves and Decision Point tools can also now be used on real-time charts, quickly highlighting clear Elliott Wave patterns at critical price levels and support/resistance areas where professionals may reverse a market against the herd instinct. This offers still more risk-controlled trade opportunities.
The proprietary MTPredictor Volume Spike Indicator can also be displayed automatically, giving instant warning of professionals' trading activity with the potential to reverse a market move.

The development and release of v6.5 re-confirms the company’s worldwide reputation for helping traders control their trading risk through the MTPredictor 4-Stage Trading Process. Business Development and Marketing Director Tony Beckwith commented: “We are absolutely delighted to be able to respond to customers’ needs with the launch of v6.5. Traders can now find low risk set-ups, assess their risk/reward outlook, determine their trade size and manage their open trades on charts all the way up from 3 minute to weekly bars – all in the same software package. Commenting on datafeeds, Tony added: “DTNiQFeed customers can now use MTPredictor v6.5 for pure real-time trade analysis, a clear step forward and a major new offering for them”.

In addition to the v6.5 standalone software, MTPredictor continues to serve customers of the TradeStation8, NinjaTrader and eSignal chart platforms by offering the well-known MTPredictor RT add-ons designed specifically for use on those three platforms.

v6.5 Pricing and Support

v6.5 is available on a special launch offer for new purchasers - with an introductory US $500.00 discount - at US $2,495.00 (the same pricing as the previous v6.0). This price will increase to US$2,745 from midnight New York time, 31 October 2009.

The software is available on a standard 30 day money-back guarantee, minus a US $250.00 support fee. The Support package for customers includes Part 2 of the Trading Course, weekly Customer Training and Sales Presentation webinars, a Discussion Forum, a daily Blog and round-the-clock email/phone support.

The firm is also planning to announce a new traders’ coaching programme, with details to be confirmed.

About MTPredictor Ltd.

MTPredictor Ltd. develops and markets the MTPredictor™ specialist trading software for individual traders, professional traders, hedge funds, investors, brokers and money managers. MTPredictor also operates regular training Webinars for customers, non-customers and third party firms.

MTPredictor Ltd. is headquartered in Bristol, England, U.K. and was founded in 2001. More information about MTPredictor Ltd., Steve Griffiths (developer & managing director), Tony Beckwith (business development & sales director), Bruce Montegani (head of support)

Click here to review more information and purchase MTPredictor Trading Software

Tuesday, September 22, 2009

How to Trade in a Fast-Moving Bear Market

How To Trade In A Fast Moving Bear Market
Next Trading Course Workshop Atlanta Georgia September 25, 2009

It's one thing to know how something works but quite another to make it work for you.

The Wave Principle is no exception. Yet learning how to put it to work in your own trading can really separate you from the herd – because "with the herd" is no place to be in this market. Here's your opportunity.

The response to our intensive, small-group trading course has been so overwhelmingly positive and the demand so strong that our instructors have decided to take the course on a world tour. At each stop, our most experienced Elliotticians and career traders will teach you how to use the Wave Principle and supporting technical tools to capitalize on the unique opportunities – and avoid the dangerous pitfalls – you’ll encounter in this bear market.

Click here to review more information and registration.

You'll spend two days with EWI's top trading instructors, and you can even ask them questions after you leave – get ready to go back home and kick your trading into high gear.

Drawing on more than 40 years of combined experience analyzing and trading the markets, Senior Tutorial Instructor Wayne Gorman and “Trader’s Classroom” instructor Jeffrey Kennedy team up to share with you the best techniques, tips and tools they have to offer.

In an intimate classroom setting, Wayne and Jeffrey walk you through carefully selected lessons and hands-on exercises that will send you home with the understanding and confidence you need to begin applying these techniques in your own trading.

Plus your education continues even after you leave. Once the course is over, your trading mentors Wayne and Jeffrey are available to clarify a critical lesson or answer that forgotten question that popped up on your way home.

Here's what you'll learn:

* Elliott Trading Fundamentals

* Risk/Reward Assessment

* Discipline Guidelines

* Psychology of Trading and the Markets

* Technical Tools that Complement Elliott

* Developing a Trading Strategy

* Determining Support and Resistance Levels

* Fibonacci Applications

* Entry and Exit Strategies

* Placing and Adjusting Stops

* Trend Reversals and Pattern Recognition

* And More

Click here to review more information and registration.

Monday, September 21, 2009

Weekly Stock Pick

Buy Sell Hold
The Market Week Ahead

The big important data reports this week are: Tuesday New Zealand 2nd Quarter Gross Domestic Product. Wednesday French August Consumer Spending, and the weeks biggest, the US Fed Open Market Committee Interest Rate Decision. Thursday is Australia Financial Stability Review. The US Dollar is at yearly lows currently. If the Dollar starts rising with or without a US Interest rate increase, stocks should start falling. Consensus is that the Fed will keep the rate at 0.25%. Unemployment is still climbing so the Fed might keep printing money feeding stimulus to the economy giving support for a lower dollar and higher stock prices. But then again, the dollar could find a bottom and start rising again. Watch out for that.

My Stock Pick This Week

Even with a flat interest rate decision on Thursday, the dollar could easily rise with its price at yearly lows currently. Thus, stocks would be ripe for a fall. My stock pick this week is a short-sell on a big company that is based in a city with the highest real estate foreclosure rate in the nation, Las Vegas. 1 in 62 households in Loss Vegas are foreclosed. The stakes are piling up for the gambling stocks. With the sector up more than threefold since March, it trades at 20.5 times expected earnings over the next year, compared with 17.4 times for the overall market. Vegas continues to suffer from fewer visitors and an overbuilt real estate industry. This company just said that it might report a third-quarter non-cash impairment charge related to its City Center complex's for-sale residences. Ah, there’s that real estate problem again.

Sell Short MGM Mirage – Ticker MGM

Sell Entry: 15.83 to 12.97

Stop-Loss: 16 or Higher

Take Profit Areas: 11.88, 9.32, 7.48, 5.84, 4.71

MGM Mirage Company Profile

MGM Mirage, through its subsidiaries, owns and operates casino resorts in the United States. The company’s resorts offer gaming, hotel, dining, entertainment, retail, and other resort amenities. It also owns and operates golf courses and a golf club. As of December 31, 2008, the company’s properties consisted of 17 wholly-owned casino resorts and 50% investments in 4 other casino resorts. MGM MIRAGE also operates luxury hotels in the Middle East and Asia. It has a strategic alliance with the Mashantucket Pequot Tribal Nation, which owns and operates a casino resort under the MGM Grand brand name in Ledyard, Connecticut. The company, formerly known as MGM Grand, Inc., was founded in 1986 and is based in Las Vegas, Nevada. MGM MIRAGE is a subsidiary of Tracinda Corporation.

Click here to review and trial the Trading Software we used in determining our short position on MGM.

Click the MGM Mirage Stock Chart for a larger view.

MGM Mirage Stock Chart

Friday, September 18, 2009

Germany's DAX: Free Insight Into Europe's Leading Economy

Germany DAX
It's one of the first rules in the book of mainstream economic wisdom: a country's economy is the thermometer which "reads" its stock market's temperature. If financial conditions are heating up, stocks rise; if they are cooling down, stocks fall. Were it so simple -- millionaires wouldn't make up a measly .15% of the global population.

Obviously, there's a major flaw with this logic; namely, it isn't true. Time and again, stock prices smolder to near boiling even as economic growth chills to the bone. (The opposite also holds: Stock prices cool down even as the economy is on fire.)

Take, for instance, Germany's main stock index, the DAX 30. On August 13, Europe's number one economy reported a .3% rise in gross domestic product (GDP) -- Germany's first quarter of growth since January 2008. Soon after, the DAX began to rally and finished the day at a fresh, ten-month high.

In no time at all, every financial media outlet from Wall Street to la-la land had their story: "Germany's DAX rose nearly 1% on the GDP data. The big picture will be one of ongoing gradual recovery through 2010." (LA Times)

One problem: the DAX's bullish flame has been burning since the index landed at a two-year low on March 9, 2009. YET -- the economic data over those six months has been about as "hot" as the Arctic Circle. Here, the following news stories from the time say plenty:

* March 24, Wall Street Journal: "There's a slew of evidence that Germany is in an economic freefall: A 19% drop in industrial output, a 23% decline in exports, a 35% drop in new manufacturing orders, and on. The numbers we're seeing are just mind-boggling."

FreeWeek Kicks Off With Germany: On September 16, EWI launched its first-ever FreeWeek featuring its youngest subscriber services: European Short Term Update and Asian-Pacific Short Term Update. Take advantage of this amazing opportunity. Click Here to sign on and get invaluable insight into Europe's #1 market.

* April 30, New York Times reveals a 17% year-over-year decline in Germany's exports and writes, "With 47% of its GDP generated by exports, Germany would suffer a severe contraction in its economy."

* May 16, Wall Street Journal: "In the fourth-quarter 2009, Germany's GDP plunged 3.5%; its worst performance in nearly four decades."

* May 17: Tens of thousands of German workers march through downtown Berlin to express their anxiety over the alarming increase in unemployment: at 7.7%.

* June 29 Associated Press: Germany's GDP has now fallen by nearly 7% in the past four quarters with widespread expectations for a 5.5% to 6% contraction by the years end.

* July 3 WSJ: "Germany's own recession is the deepest of any major economy in the world, apart from Japan."

* September 8 speech by Germany's Chancellor Angela Merkel: "We are in the worst economic crisis that the Federal Republic of Germany has experienced in 60 years."

You get the picture: During the DAX's entire six-month long winning streak, Germany's economic figures have been bleaker than bleak. The mainstream correlation was broken in its box along with any pre-emptive opportunity to position for the uptrend.

That, however, was NOT the case for EWI's European Financial Forecast. Here, the following archive of our analysis shows the extent to which objective analysis of the market's internal measures keeps traders ahead of the biggest moves:

March 2009 European Financial Forecast (release date: February 25)

"We favor the fourth-wave contracting triangle interpretation for the DAX. The DAX broke through a solid support shelf at 4014 this week so selling pressure could intensify before we see a notable rally." The end of the wave v decline should come near 3440.

March 6 European Short Term Update (ESTU):

"The DAX situation is similar to the entire region. We believe that the market is closing in on a low; perhaps it's a week away from finding a decent bottom."

On March 9, the index did indeed "find" its bottom at 3588.

March 13 ESTU:

"We must entertain the possibility that the low earlier this week may hold for a time, weeks or months, and the risk-reward equation is not as heavily favorable for the bears."

So, where will Germany's DAX be headed next? Find out at the unbeatable price of $0.00. No, that's not a typo; it's how much it will cost you to read objective insight, view original price charts, and recieve trend-breaking, and making details about Germany's DAX for a full seven days. These are just few of the benefits of EWI's first-ever FreeWeek featuring European Short Term Update, and its Asian-Pacific counterpart.

FreeWeek continues from September 16 through September 23. Get all the details on how to participate in this amazing offer today.

Thursday, September 17, 2009

Forex Daily Analysis 09/17/09

By Chief Analyst Cliff Wachtel, CPA

Click here for Forex Daily Technical Levels and Trade Recommendations

General: Bias to risk currencies, USD becoming carry trade funding currency, all commodity currencies and USD GBPUSD trade of the day

USD The dollar traded near a one-year low against the euro before reports that may show Europe’s trade surplus is growing and the U.S. housing market is improving. It's at a 13 month low against the AUD and USD.

The broad gauge for the dollar declined after the London interbank offered rate, or Libor, for three-month dollar loans fell to a record low of 0.292 percent yesterday. It was as high as 4.82 percent in October 2008, following the collapse of Lehman Brothers Holdings Inc. the month before.

“Given the fragility of the U.S. economy, the Fed can’t normalize credit and monetary easing policies,” said Mitsuru Saito, chief economist in Tokyo at Tokai Tokyo Securities Co. “The bulk of highly liquid dollar assets will continue to flow into other currencies or commodities, putting downward pressure on the dollar.”

According to the July Treasury International Capital flow report, foreign investors cut their purchases of U.S. dollars significantly last month, adding pressure on the U.S. dollar.

What could reverse the USD slide: Hawkish indications from the Fed if there is enough recovery, especially in jobs and spending, or dovish actions from other central banks, especially the ECB, BoE, or BoJ. Together their currencies paired against the USD comprise almost 60% of all FX trade.

EUR - The euro rose to a four-month high against the pound before a report forecast to show Europe’s trade surplus widened to the most in more than a year, adding to evidence the region’s recession is abating.

The 16-nation euro area’s trade surplus widened to 1.2 billion euros ($1.8 billion) in July, the most since February 2008, from 1 billion euros in June, a Bloomberg survey of economists showed. The European Union’s statistics office will release the report in Luxembourg today. The Dutch central bank said yesterday a “slight improvement” is visible in the global economy.

“Europe is fundamentally on a sound footing,” said Adam Carr, a senior economist in Sydney in a Reuters report. Among the Group- of-Three currencies from the U.S., Germany and Japan, “the euro is my favorite,” he said.

Traders increased bets the European Central Bank will raise its 1 percent benchmark interest rate by the middle of next year. The implied yield on the three-month Euribor futures contract for June 2010 delivery rose to 1.255 percent today from 1.225 percent yesterday.

JPY - The yen weakened after data showed Japanese purchases of foreign bonds reached a four-year high. Gaining against USD due to Fuji's anticipated stronger yen policy (LT trade opportunity, would hurt Japanese profits, Nikkei).

The yen fell for a fourth day versus the euro as Japanese investors bought a net 1.66 trillion yen ($18.2 billion) in overseas bonds and notes in the week ended Sept. 12, the most since June 2005, the Ministry of Finance said today.

“Risk-taking sentiment is improving amid signs of a global recovery,” said Akifumi Uchida, deputy general manager of the marketing unit at Sumitomo Trust & Banking Corp. in Tokyo. “Local investors are probably sending their money overseas into countries such as Brazil, Australia and New Zealand.”

These Yen developments and a steady drop in Treasury yields in the past few weeks have surprised many and triggered speculation that the U.S. dollar was also fast becoming the preferred funding currency for carry trades.

GBP – Benefitting least from USD travails, falling against the EUR. Like the US, unemployment remains a growing problem: The Claimant Count rate reached 5.0%, up from last month’s 4.9%. The number of people claiming jobless benefits rose by 24.4k, essentially matching last month’s 25.2K rise. The ILO Unemployment Rate beat estimates for a rise to 8.0% but still managed to hit the worst levels since 1996. Further concern comes into play when examining Average Earnings which rose at the slowest pace on record. The jobless data did not provide any added optimism for the pound and continues to foster a bleak economic outlook.

AUD – Holding near highs, gaining in Asia on the USD despite recent disappointing AUD news, cautious RBA statements, and positive USD news

NZD –holding near highs against USD and other safer currencies

CAD – Moving with risk appetite, commodity prices, weak USD. Threat of intervention if USDCAD drops too low is expected to keep a floor on the USDCAD. Canada reported a 5.5 percent rise in Manufacturing Shipments, the best reading in more than a decade. Inventories sank for the sixth straight month, but New Orders plunged 3.7 percent. On tap for tomorrow will be Canadian Consumer Prices which will surely warrant broad market attention

CHF –Retail sales up 1% better than the expected 0.7% y/y, slightly weaker than the 0.9% seen in June. We expect no change in policy at Thursday's meeting and look for the SNB to begin hikes in H2 2010, CHF hits annual high against USD for 7th straight day, SNB may at least begin verbal intervention if not actual CHF sales

May see heavy volatility ahead of SNB monetary policy announcement, which may provide hints concerning SNB intervention. The currency pair is now trading within intervention territory and we believe that the risk is high for the SNB to sell Francs or at bare minimum talk down the currency this week. Swiss Producer Prices were release this morning and inflationary pressures have increased modestly. Industrial production is due for release tomorrow.

Click here for more forex analysis and to open a free demo or live AVAFX account.

Wednesday, September 16, 2009

Tactical Pro Swing Trading Workshop Sept 19

Van Tharp Institute
Swing Trading: A Great Style of Trading to Make Big Profits in Today’s Volatile Markets. Learn profitable trading methods that fit your schedule.

Van Tharp Institute Three-Day Trading Workshop September 19-21, 2009 Click Here

Swing trading is the intermediate time frame trading style (trades generally lasting 2-14 days) that combines the big upside of active trading but that doesn’t require you to watch the markets minute by minute.

If you want big returns for the least time spent trading, come and learn this material, being presented for the first time.

* Learn the Pro Traders’ Secrets for Capturing Huge Profits in Bear AND Bull Markets

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* Forget about Losing a Bundle by Holding Stocks Like Everyone Did During the Last Market Decline! Find Out the Master Trader’s Alternative to “Buy & Hold”

* Discover the Detailed Trading Strategies that Win in Today’s Markets

If you want to make bigger trading profits on your own time, you’ll definitely want to attend the next Tactical Pro Swing Trading three-day workshop.

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Make big profits by harnessing volatility, saving money on your trading costs and protecting (and even increasing) your net worth when the market falls out of bed.

You’ll make more money in less time than you ever thought possible.

This workshop is your chance to learn all the proven “insider” trading secrets that work in any market conditions directly from a Wall Street insider’s insider, Christopher Castroviejo.

Christopher is a true market maven. He has had stints with huge names on Wall Street, including Smith Barney, J.P. Morgan, a partnership at Bear Stearns and financial consultant for the Vatican Bank.

In between all of that, Christopher also ran the trading desk at a top Wall Street hedge fund that was responsible for 34% compounded gains over seven years.

The fact is simply this: Christopher knows what it takes to be successful in any kind of market. Not only is Christopher the most knowledgeable trader I’ve ever met, he’s also an excellent teacher. He loves to share his trading knowledge with traders of any level, whether you’re an experienced trader, or you’re just getting started.

My name is D. R. Barton, Jr., and together with Christopher, we have created this workshop to show traders the secrets of swing trading.

I’ll show you the best ways to create a technically sound trading system to maximize your profits…. how to use the most important secret of swing trading… and key psychological factors that affect traders (just one of these secrets alone could be the “missing link” in your own trading).

What Christopher and I will show you at this seminar could well be the most valuable Swing Trading secrets and strategies you will ever learn.

Whether you’re an experienced trader who wants to fine-tune your system, or you’ve wanted to try Swing Trading but haven’t yet, Christopher and I teach these courses with one goal in mind:

To show you how you can make your Swing Trading much more successful… and far more profitable.

You’ll come away from this fun and enjoyable workshop with detailed trading strategies from both Christopher and me—strategies we use that can help make you bigger gains… no matter what the market is doing.

To review and enroll for Van Tharp Trading Workshops click here.

Tuesday, September 15, 2009

Free How to Spot Trading Opportunities eBook

Free Trading eBook
Hurry This Free Offer Expires Sept. 23, 2009

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* How the simplest rules and guidelines have some of the most powerful applications for trading

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The How to Spot Trading Opportunities eBook features 47-pages of easy-to-understand trading techniques that help you identify high-confidence trade setups. Senior EWI Analyst Jeffrey Kennedy will show you how some of the simplest rules and guidelines have some of the most powerful applications for trading.

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Monday, September 14, 2009

Weekly Stock Pick

Buy Sell Hold
The Market Week Ahead

The high priority data reports coming in this week are: Tuesday US Advance Retail Sales for August. Wednesday UK Jobless Claims for August, Japan BSI for the 3rd Quarter, and Japan Tertiary Index for July. Thursday Canada Consumer Price Index for August, and Switzerland Interest Rate Decision, plus a multitude of other important reports. October is getting close, the market is still heading higher, the problems are still around . . . it’s starting to feel like 1987 again possibly.

My Stock Pick This Week

Is a short sell on a Commercial Real Estate Investment Trust. Two Weeks ago, I placed a short sell on another REIT, Ticker AIV. The good real estate numbers that came in last week on could easily have been foreclosure sales I’m betting. Commercial real estate which this company is mainly involved with is watching along with the US Taxpayer as US banks are currently writing off commercial real estate loan losses that may possibly reach up to $30 billion by the end of the year. Commercial real estate delinquencies hit 4% plus in the second quarter of this year which is double from a year ago. Bernanke told Congress that possible defaults on hundreds of billions of dollars of commercial mortgages presents a difficult challenge. In my opinion the worst is yet to come for the real estate markets, and lower real estate prices and rents are coming first before any upside second.

Sell Short ProLogis – Ticker PLD

Sell Entry: 12.03 to 11.47

Stop-Loss: 12.21 or Higher

Take Profit Areas: 10.91 to 9.79, 9.03 to 7.99, 7.29 and Lower

ProLogis Company Profile

ProLogis operates as a real estate investment trust in the United States. It owns, operates, and develops industrial distribution properties in North America, Europe, and Asia. The company operates in three segments: Property Operations, Fund Management, and Corporate Distribution Facilities Services (CDFS). The Property Operations segment engages in the ownership, management, and leasing of industrial distribution and retail properties. As of December 31, 2005, this segment consisted of 1,461 operating properties with approximately 186.7 million square feet. The Fund Management segment provides investment management services for unconsolidated property funds and other properties. As of the above date, this segment had investments in approximately 14 property funds. The CDFS segment primarily develops properties that are contributed to a property fund or sold to third parties. This segment also engages in commercial mixed-use development activities, such as selling the land or completed projects to third parties. As of the above date, this segment had approximately 72 distribution properties. As a REIT, the company would not be subject to federal tax to the extent that it distributes at least 90% of its taxable income to its shareholders. It has a strategic cooperation agreement with China National Materials Storage & Transportation Co. and Zhongchu Development Stock Co., Ltd. to develop logistics and storage markets. The company also has a joint venture agreement with K Raheja Corp. for the acquisition and development of properties in Mumbai, Chennai, Delhi, Bengaluru, Kolkata, and Pune, India. ProLogis was founded as Security Capital Industrial Trust in 1991 and changed its name to ProLogis Trust in 1998. Subsequently, it changed its name to ProLogis. The company is headquartered in Denver, Colorado.

Click here to review and trial the Trading Software we used in determining our short position on PLD.

Click the ProLogis Stock Chart for a larger view.

Friday, September 11, 2009

How A Bear Can Be Bullish And Still Be Right

Bear Bull
In recent months, Elliott Wave International President Bob Prechter has become something of a household name. In the final two days of August 2009 alone, Bob was mentioned by several news outlets from MarketWatch to the New York Times. The claim to his "fame"

EWI was one of the only technical analysis firms to anticipate a sharp rally in U.S. stocks as they circled the drain of a 12-year low this spring, a feat made ever more exceptional considering the widespread image of Bob as being the ultimate "Big, Bad Bear."

The lesson? Believe in the facts, not in the "widespread image."

Bob Prechter has always said that successful forecasting should look to the current wave count (and various other technical measures) for direction. He has never permanently tied himself to the mast of definition -- i.e. "bull" or "bear."

For this reason, EWI's team of analysts have been able to stay one step ahead of the biggest turning points in the Dow Jones Industrial Average, from the very start of the index's historic 2007 reversal.

To wit: This two-year chart of the Dow incorporates several calls from our past publications as they coincided with the market's most memorable peaks and troughs:

Click the Dow Daily Chart For A Larger Image

Dow Daily Chart
For more analysis from Robert Prechter, download a free 10-page July issue of Prechter's Elliott Wave Theorist

The chart above presents the abstract details of our past analysis. Here is the expanded version of those insights as they appeared in real-time:

July 17, 2007 TheElliott Wave Theorist:

"Aggressive speculators should return to a fully leveraged short position now. We may be early by a couple of weeks, but the market has traced out the minimum expected rise, and that's enough to act on."

Soon after, as the DJIA neared its own historic Oct. 11, 2007 apex, the Oct. 9 and 10 Short Term Update amped up the urgency of its analysis and wrote:

“Odds have increased that a market high is in place. The structure, coupled with turns in the other markets, suggests a top is in place. The potential, at the least, is four a large selloff... Watch Out! The market faces a stout correction."

Before landing at its March 10, 2008 bottom, the March 5 Short Term Update afforded respect to a bullish alternate count and wrote: "Prices should carry above the wave a high (13165) before it ends."

At its four-month high, the March 16 2008 Elliott Wave Theorist went on high, bearish alert and wrote: The DJIA is entering "Free Fall territory."

One week before the U.S. stock market landed at its 12-year low of March 9, our Feb. 27, 2009 Short Term Update utilized a traditional turning pattern to outline a specific time window for the onset of a major upside reversal. In STU's own words:

"By all indication, this pattern is back on track... the turn will come on or near March 10, 2009. Anywhere in this time period may mark a turn, which will obviously be a market low."

Once the bullish winds of change had turned, the March 16 Short Term Update wrote:

"When the market speaks, it behooves us to listen. The implications of this are that the... major stock indexes are in the initial stages of a multi-month advance."

Finally, the April 2009 Elliott Wave Financial Forecast calculated a specific target range for the Dow's rally: the 9,000-10,000 level.

So, now that the upside objective is met, where are prices set to go next? For more analysis from Robert Prechter, download a free 10-page July issue of Prechter's Elliott Wave Theorist

Robert Prechter, Chartered Market Technician, is the world's foremost expert on and proponent of the deflationary scenario. Prechter 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.

Wednesday, September 09, 2009

Surfing the Current Market Wave

By D.R. Barton, Jr. of Van Tharp Institute

Click here for Dr. Van Tharp 2009 Live Trading Workshop Schedule

“The only function of economic forecasting is to make astrology look respectable.”— John Kenneth Galbraith

I’m sitting here this evening on a porch in North Myrtle Beach, South Carolina watching the waves. Earlier, I spent about an hour body surfing those same waves and had a great time with my whole family, including my dad.

There are lots of different types of waves to ride, but I do have my favorite. The best waves for me are the ones that don’t look like much on the surface but have lots of underwater pull. They always give the best ride. For an added benefit, the casual onlooker doesn’t really understand how you went so far, so fast.

In my opinion, that’s the kind of wave that the housing market is about to ride.

The state of the residential housing market is one of the most debated topics in economics right now: has it bottomed and started back up or is the worst yet to come? If you listen to the media, you probably have the impression that housing has hit bottom and is on its way back up. Then there’s this complicated but compelling graphs that has been cited a lot recently that paints a different picture.

Why the Housing Market Matters

Understanding the big economic picture is not just an exercise for institutions and fundamental investors. Traders of all stripes benefit from understanding the long term economic trend. These longer term trends are initiated by and sustained by changes in macro influences that affect nearly every household and business in the country. When these things change, they tend to affect (move) the markets for a long time. For example, interest rate changes will affect the economy and markets for months and years.

One big driver of the economy is housing. The housing market is such a huge part of the economy that it has a major effect on investor sentiment and the financial markets. Housing reports move markets and have done so significantly in the last two years as there have been a lot of changes in that sector recently (Understatement!).

This was evident again on Friday (8/21) when the National Association of Realtors reported that existing home sales had higher volume figures than expected. The market popped on the announcement (and this was on top of a very strong up week).

Of course, all the giddy reports of the better volume news failed to mention two other points further on down in the press release: the continuing drop in the existing home prices and the rise in the inventory of homes for sale. With the current strong near term bullish sentiment, the positive news gets accentuated and the negative news gets ignored. (Now even my third grade economics students know that if supply goes up and prices go down, demand is not going up.)

Adding Some Longer Term Data to the Outlook

Credit Suisse has been getting a lot of attention recently and for good reason. It shines some much-needed light on the broad mort-gage market story.

For those not familiar with terms here, mort-gage rate resets are the periodic adjustment in interest on home loans that have some type of variable rate. Naturally, changing the interest rate also changes the mort-gage holder’s monthly payment. Many homeowners in the last few years bought homes with adjustable rate mort-gages (ARMs) or balloon rate mort-gages that had very low initial or “teaser” rates. Those low initial rates are then reset higher at some point.

Option ARMs give mort-gage holders alternative payment options. The lowest cost option is a minimum payment that does not even cover the interest accrued in the last month. This means it's fairly simple for a homeowner with an option ARM to end up underwater (the homeowner owes more money on the mort-gage than the property is worth). This can occur even in a market where prices are holding steady. If real estate prices are dropping though, it is even more likely that a homeowner with an option ARM will end up upside down, which then makes refinancing nearly impossible.

Alt-A is the category of loans made to borrowers with credit scores just above the subprime level. You have heard, no doubt, about the high foreclosure rates in the subprime area over the last two years and the global financial havoc it wreaked. Many reputable analysts anticipate Alt-A to be the next big problem.

There's a huge amount of Alt-A and option-ARM resets happening in 2010-2011, with that peak being even bigger than the subprime peak of last year. Potentially, a lot could happen to reduce the effect that this peak could have on the banking system but this is the 800 pound financial gorilla in the room. Ignore him at your own peril!

It is not my intent to paint a negative picture but to paint a fuller picture with a greater depth of data for your own evaluation. Without some consideration about what is happening in the economy and where it’s going, you lack very important context for trading the market. Simply taking in the headlines at face value like last Friday’s existing home sales rise can be dangerous. What does your big picture look like right now? How do the current market levels fit in with your big picture?

I believe the current market rally is driven by force-fed liquidity (cash injections). As I have said recently, this artificial stimulus requires us to toss to the sidelines much of our traditional analysis as this market powers upward on excess currency. In today’s market, you can’t see the underwater pull by just looking at the surface.

If you are riding this wave, be sure you have a firm exit plan or else the wipeout could be nasty.

Great Trading! D. R.

About D.R. Barton, Jr.: A passion for the systematic approach to the markets and lifelong love of teaching and learning have propelled D.R. Barton, Jr. to the top of the investment and trading arena. He is a regularly featured guest on both Report on Business TV, and WTOP News Radio in Washington, D.C., and has been a guest on Bloomberg Radio. His articles have appeared on and Financial Advisor magazine. You may contact D.R. at the Van Tharp Institute

Tuesday, September 08, 2009

How to Trade in a Fast-Moving Bear Market Chicago Trading Seminar

Bear Market Bear
How To Trade In A Fast Moving Bear Market Chicago Trading Seminar September 11 & 12

It's one thing to know how something works but quite another to make it work for you.

The Wave Principle is no exception. Yet learning how to put it to work in your own trading can really separate you from the herd – because "with the herd" is no place to be in this market. Here's your opportunity.

The response to our intensive, small-group trading course has been so overwhelmingly positive and the demand so strong that our instructors have decided to take the course on a world tour. At each stop, our most experienced Elliotticians and career traders will teach you how to use the Wave Principle and supporting technical tools to capitalize on the unique opportunities – and avoid the dangerous pitfalls – you’ll encounter in this bear market.

Click Here To Reserve Your Seat Now

You'll spend two days with EWI's top trading instructors, and you can even ask them questions after you leave – get ready to go back home and kick your trading into high gear.

Drawing on more than 40 years of combined experience analyzing and trading the markets, Senior Tutorial Instructor Wayne Gorman and “Trader’s Classroom” instructor Jeffrey Kennedy team up to share with you the best techniques, tips and tools they have to offer.

In an intimate classroom setting, Wayne and Jeffrey walk you through carefully selected lessons and hands-on exercises that will send you home with the understanding and confidence you need to begin applying these techniques in your own trading.

Plus your education continues even after you leave. Once the course is over, your trading mentors Wayne and Jeffrey are available to clarify a critical lesson or answer that forgotten question that popped up on your way home.

Here's what you'll learn:

* Elliott Trading Fundamentals
* Risk/Reward Assessment
* Discipline Guidelines
* Psychology of Trading and the Markets
* Technical Tools that Complement Elliott
* Developing a Trading Strategy
* Determining Support and Resistance Levels
* Fibonacci Applications
* Entry and Exit Strategies
* Placing and Adjusting Stops
* Trend Reversals and Pattern Recognition
* And More!

We provide everything you need to become a winning Elliott wave trader. You can even take all the course materials home with you so you can reference the lessons after you leave.

Besides your increased confidence and expanded Elliott wave trading knowledge, you'll also take home a valuable course packet, which you'll receive upon arrival.

Use the workbook and other resources during the course to follow along with each lesson, make notes, complete training exercises on your own – and most important – review the materials as often as you like after you leave.

Here's what's inside your course packet:

(Laptops are not required for this course.)

* EWI's one-of-a-kind Bear Market Tutorial workbook, which includes all of the most important lessons and exercises, handpicked by your instructors

* Sleek, durable USB thumb drive, filled with digital copies of all of Wayne's and Jeff's presentation slides and materials covered during the 2-day course

* The Basics of the Wave Principle, a condensed, "Cliff Notes" style reference book originally created exclusively for EWI analysts

* Personalized name badge and EWI-embossed note-taking tools

Click Here To Reserve Your Seat Now

Monday, September 07, 2009

Weekly Stock Pick

Buy Sell Hold

The Market This Week

The USA August Unemployment report last Friday came in at 9.5% - 9.7% depending upon where you’re getting your data from. This week the market will digest this and give more clues for its future direction. I’m betting its down. If unemployment keeps increasing then GDP should decrease. I think US unemployment is heading for double digits still, and I do think a depression for the USA is very possible. With traders coming back to the market after the Labor Day Weekend, we should be seeing increased volume, and volatility as the market decides its next moves this week. Commodities look to be a good place to park money especially soft commodities such as food, except for pork until Swine Flu goes away.

My Stock Pick This Week

Speaking of Swine Flu, my stock pick this week is involved in the production of hogs, processing of pork, production of turkey, and live cattle operations. The company is releasing its quarterly results Tuesday morning. Analysts are expecting a loss of 55 cents a share, considerably wider loss than last year's two-cent loss. One of the biggest problems for this company is its fixed costs associated with their operations, as current genetics along with the environmentally “clean” methods now required to raise hogs means profits are only realized when their facilities are running at full capacity. Volatility in feed and energy prices along with the “Swine Flu Pandemic” have all worked against their profitability. These problems are affecting this companies profitability with a decline in current demand with sales falling short of analysts forecasts, and margins are decreasing while costs are increasing. Classic recipe for a lower stock price it smells like.

Sell Short Smithfield Foods – Ticker SFD

Sell Entry: 13.28 to 12.71

Stop-Loss: 13.41

Take Profit Areas: 12.14 to 11.57, 11.26 to 11.12, 10.39 to 10.26

Smithfield Foods Company Profile

Smithfield Foods, Inc., together with its subsidiaries, engages in the production and marketing of fresh meat and packaged meat products in the United States and internationally. It involves in the production of hog, processing of pork, production of turkey, and live cattle operations. The company offers fresh pork to retail customers as unprocessed, and trimmed cuts, such as butts, loins, picnics, and ribs; packaged meat products, including smoked and boiled hams, bacons, sausages, hot dogs, deli and luncheon meats, pepperoni, dry meat products, beef, and poultry, as well as ready-to-eat prepared foods, such as pre-cooked entrees, and pre-cooked bacons and sausages. It sells its products to supermarket chains; wholesale distributors; the foodservice industry, including fast food, restaurant and hotel chains, hospitals, and other institutional customers; export markets, and other further processors. The company sells its products through its salespersons and independent commission brokers. Smithfield Foods, Inc. was founded in 1961 and is headquartered in Smithfield, Virginia.

Click here to review and trial the Trading Software we used in determining our short position on SFD.

Click the Smithfield Foods Stock Chart for a larger view.

Friday, September 04, 2009

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Have a great and safe Labor Day Weekend!

Wednesday, September 02, 2009

China's Stocks Crash: Is The United States Next?

Shanghai Stock Exchange
In the past three weeks alone, China's formerly sizzling stock market has gone from bull market leader to bear market letdown. On August 30, the Shanghai Composite Index plummeted 6.7%, its largest one-day drop of 2009 so far. And, of the 89 global markets tracked by Bloomberg, the Shanghai index came in last place.

As for what caused the freefall, mainstream experts point their collective finger at one main factor: Growing fears that China's monetary officials will turn off their easy-money spigot. Here, this August 31 BusinessWeek stands in:

"Investors began selling on concerns that banks will cut back on lavish lending that had helped push shares up by more than 80% since that start of the year."

Here's the thing: the drunken lending habits of China's banks have been on the global Concern-O-Meter for quite some time now. And last I checked, its needle reading jumped from "Don't worry be happy" -- to -- "Be Afraid, Be Very Afraid" many months ago. To wit:

May 2009: China's deputy central bank governor seriously questions the "sustainability of the rapid growth in credit and its possible adverse impact," and a Wall Street Journal piece warns that China's stimulus spree is "pillaging bank balance sheets" as the quantity of loans vastly outweighs their quality.

June 2009: "China's Banks Are Warned About Loans" (WSJ). China Bank Regulatory Commission issues an internal directive to commercial banks to "tighten supervision of loans" and ensure those loans serve the needs of the "real economy" and not "financial speculation."

July 2009:"China Aims To Rein In Lending." (Associated Press) China's two largest lenders reveal they will "sharply slow credit growth."

Yet during that time, the mounting anti-lending rhetoric failed to take the wind out of the Shanghai Composite Index's sails. Prices rallied without resistance to new yearly highs until early August.

(China Falls: Bellwether, Or Blip? EWI provides multiple opportunities to stay ahead of the world's leading markets. Our teams of analysts specialize in their region of expertise. For Europe, click here. For the United States, click here. For Asia-Pacific stocks, click here.)

So if the "fundamental" shoe doesn't fit, what's the real story here? Well, I'll make it really simple: the Shanghai Composite Index has plunged more than 20% from its 2009 high on August 4. And, in the days leading up to the market's reversal, China landed on the radar of several of EWI's subscription-based publications. For our analysts, the time had come to stage a full frontal attack and warn of a major turn in China's fortunes.

Here, the following catalogue of previous publications fills in the blanks:

August 2009 Elliott Wave Financial Forecast observes the unsustainable nature of China's latest stock market rise and writes: "China's debt bubble will succumb."

August 14 Asian Short Term Update: "All eyes continue to be on China as we ascertain whether or not an intermediate-term-top is in place."

August 14 Short Term Update: Presented the following close-up of China's main stock market and wrote: "A break of the trendline will be the next important tip" that a larger decline is underway.

Shanghai Composite

August 14 European Short Term Update: "Though not under our normal purview for ESTU, China has been the central source of liquidity...China's sharp decline may be a case of the pin meeting the balloon."

(Editors Note: As for the historic October 19, 2007 peak in the Shanghai Composite Index illustrated on the chart above, the September 2007 Elliott Wave Financial Forecast wrote: “The only bubble that continues to expand is that in the Chinese stock market. The following statistic suggests strongly, however, that its peak cannot be far off.”)

Whatever the market, our team of analysts take their coverage to the next level: From confronting current changes in trends to anticipating those changes before they occur.

Click Here to Review the Elliott Wave Global Financial Forecasts