Friday, January 29, 2010
On January 27, the EUR/USD (exchange rate between the euro and U.S. dollar and the most widely trade forex pair) slipped below $1.40 for the first time in six months.
In other words, the dollar -- which most analysts considered all but doomed a short while ago -- now stands at a 6-month high against its main competitor. This brings to memory an interesting quote from EWI's president Robert Prechter's May 2009 Elliott Wave Theorist. Bob talks about the stock market, but it applies equally to forex:
To anyone not versed in socionomics, everything the stock market does is saturated with paradox.
— When T-bills sported double-digit interest rates in 1979-1984, investors saw no reason to abandon their T-bills for stocks; when T-bill rates were low in the 2000s, investors saw no reason to put up with the “low yield” of T-bills and sought capital gains in stocks. The first period was the greatest stock-buying opportunity in two generations, and the second period was the greatest stock-selling opportunity ever.
— When long-term bonds yielded 15% in 1981, investors were afraid of Treasury bonds even though they were about to embark on the greatest bull market ever; in December 2008, when the Fed pledged to buy T-bonds, rising prices appeared so strongly guaranteed that the Daily Sentiment Index indicated a record 99% bulls, just before prices started to fall.
— When oil was $10.35 a barrel in 1998, no one made a case that the world was running out of black gold; but when it was 7-8 times more expensive, some three dozen books came out arguing that global oil production had peaked, a theme that convinced investors to begin buying oil futures…about a year before the price collapsed 78%.
— In the second half of the 1990s, the idea that stocks would always be the best investment “in the long run” became popular just as a long period of superior returns was coming to an ignoble end. [As] of today the S&P has underperformed safe, boring Treasury bonds for the past 40 years, since 1969.
— Just when nearly everyone -- including world-famous investors -- finally panicked and conceded in February-March 2009 that the financial and economic worlds were in dire shape, the market turned around and shot upward in its fastest rally in 76 years.
Prechter's quote spells out the crucial importance of market sentiment for the trend. Ironically and paradoxically, when everyone gets utterly convinced that the trend is here to stay, that's the time to start looking for a reversal. The "surprising" turnaround in the U.S. dollar is just another example.
Now, a sentiment extreme by itself may not mark a reversal; a market can stay overbought or oversold for a long time. What helps to pinpoint a turnaround is Elliott wave analysis. If your charts show a completed Elliott wave pattern AND your sentiment indicators are pinned to the max, a change in trend shouldn't be far off.
Forex analysts blamed the latest euro weakness on "Greece’s and Portugal’s budget crises." (Bloomberg) Sounds bearish, but wouldn't it be ironic if instead of falling further, the euro would now rally? The latest short-term forecasts by our intensive Currency Specialty Service show that it's indeed likely.
No, not because things might improve in Greece or Portugal -- because the EUR/USD's Elliott wave pattern is putting in a short-term low. To find out what exactly that means for the pair, read our latest forex forecasts today.
Click here for more forex trading resources.
Thursday, January 28, 2010
What is a Trader's Contribution to Society?
By Dr Van Tharp Orignal Turtle Trader & Founder of the International Institute of Trading Mastery
Q: I have a question I'd like to ask you and it's in regards to establishing a mission statement for me as a trader.
As a trader, what is the REAL service that I provide? What's my contribution to society at large?
I've been reading a book by Steve Pavlina called Personal Development for Smart People: The Conscious Pursuit of Personal Growth (See Page 177 through 197), and I seem to be having a hard time in clearly seeing the values we add as traders.
I couldn't think of any other qualified expert to ask this question than you.
A: Traders serve an extremely valuable function for market based societies because they provide liquidity and distribute risk. Traders "lubricate" the market and thereby help the economy and all of its participants — everybody, in effect. Does that inspire you? Can you take on those functions as a driving force behind your trading? Will those functions serve as your mission?
Rather than asking what service your trading provides, ask yourself, "What is my bliss?". Follow your bliss and you'll find a deeply powerful mission.
I love what author Joseph Campbell says, "When you follow your bliss . . . doors will open where you would not have thought there would be doors; and where there wouldn't be for anyone else."
My experience is that when you follow your bliss you are in tune with your mission.
Dr Van Tharp International Institute of Trading Mastery
Wednesday, January 27, 2010
Trade What You SEE Not What You BELIEVE
This is part two of my January 18 interview with Roberto Hernandez, Dick Diamond's trading course assistant.
Click here for more about Dick Diamond and his Intensive 4-Day Trading Course Seminar March 7 - 10 Orlando Florida
Vadim Pokhlebkin: Roberto, have you continued to work with Dick Diamond since we last spoke? How has your professional relationship progressed?
Roberto Hernandez: I'm happy to say that it has progressed. Dick teaches his course only three times a year. But last year students kept calling me wanting to attend another seminar. So I asked Dick -- actually, I begged him -- to have a fourth seminar because the three regular ones were full; we even had waiting lists for the second and third classes. Dick agreed to have a special seminar in November and that turned out to be the best class we had all year. It was also full, and we made one important addition. Now, every student leaves not only with Dick's Market Mentor booklet with his market-timing indicators spelled out, but you also get a paper trading account. We had trading software representatives in class helping students to learn it. So if before we had some students who had no idea how to use software, now you have everything you need to apply Dick's principles. That's a big improvement, I think, and Dick is happy with it too, because now he can spend more time with each student on the actual trading material. We've not yet decided if we're going to have a fourth class this year.
VP: When I attended the course three years ago, Dick said something very striking to us on the first day. He said that most of us would not succeed as traders because we wouldn't have the discipline to follow his method. That honest warning hit me like a cold shower. In your estimate, how many students have been able to repeat Dick's success? Your success? Of the ones you stay in touch with, how many have added to Dick's trading methodology?
RH: Dick's statement remains true. In class, everything seems very clear: Just do what Dick says. But when students return home, most go back to their old habits. Their main mistake is that they trade what they believe, not what they see. In other words, they follow their emotions rather than Dick's method. Dick makes himself available to every student after the course, but personally I stay in touch with four-six students from each seminar. Most of those are doing well, although it is a low percentage of the overall class. Dick's right: Only a few students per class have the needed discipline. By the way, if you think the seminar's main goal is to teach you how to make money trading, it's not. The main goal is to teach you how not to lose money. Those who have the discipline to follow Dick's method typically succeed.
As for other trading methodologies . . . I compare the seminar to learning to read for the first time. When you come to Dick's course, he first teaches you "the alphabet," then you progress to "words," then "phrases." Then you go home and review. After some time, once you've learned this new "language," you can try and learn another one.
VP: By Bob Prechter's latest estimates, this bear market is far from over. What word of advice would you offer to traders who choose to speculate in it?
RH: I agree with Bob. My daily and weekly oscillators are pointing down, so we are at the very least looking at a substantial (and tradable) correction. But the volatility will definitely increase again. And as I said before, if you are not experienced with trading in volatile markets, this is not the time to cut your teeth. Most novices see the markets jump up and down and they want to catch every move, so they trade more often. That's a mistake; I've learned you have to scale back and trade with the larger trend. So, my advice for any would-be speculators would be:
First, way too many people jump into trading before they know up from down. Make sure you know what you're doing; I think Dick's course is good for that.
Second, trade with the trend. But you'd be surprised at how many people lose money even if they get the trend right. They have no game plan: no idea how to place stops, when to take a loss or a profit, nor the discipline to do any of that. Dick can give you the trading tools, but the discipline part is up to you. So be very careful out there. I wish all of your readers good luck.
Click Here to Learn from Dick Diamond at the upcoming 4-day trading course in Orlando Florida
Tuesday, January 26, 2010
Cause and Effect: Thinking Differently for Traders and Investors by D.R. Barton, Jr. of Van Tharp International Institute of Trading Mastery
Click Here To Review More Information and Registration for Van Tharp Institute Trading Education Workshops
When I was training to be a chemical engineer, decision making was quite “black and white”: Learn the rules of the physical world and then apply them. Learn how molecules combine and separate. Learn how mass and energy get transferred from place to place. Learn what is economical and what is not. And lastly, study hard and get good grades.
Once I was out and practicing engineering in the real world, things weren’t always so cut and dried. Outside influences often complicated things. The world of “black and white” became a world with many shades of grey. In a pristine lab environment (like back at school), molecules always combined the same way. But in the real world, contaminants could get in the system and reduce yields or create new and undesirable products altogether.
Equipment that was rated at “x” horsepower would always seem to run a little less efficiently because some field condition (normal wear, extra bends and turns, fluctuating temperature and humidity) would strip away efficiency.
In the end, the best engineers in the real world of processing plants were those who could deal most effectively with problems and conditions not found in the text book. And it will come as no surprise to most that raw intelligence was not directly correlated to success on the floor of a chemical plant. The best engineers had a certain savviness or what my Dad would call “horse sense” about the best engineers.
And I have found a very similar quality in the best traders and investors that I’ve gotten to know. They don’t have to be the most book-smart folks (though a few are), but they have a certain grounded grasp of the big picture that allows them to adapt, correct and continue with self-assured ease.
This group of characteristics that turns the average thinker into someone with good common sense or “street smarts” is somewhat difficult to sum up in a few sentences. But let’s look at some of these concepts or decision making loops that may be most easily modeled.
Trading Is Not Engineering or Accounting
Before we jump into some key decision making characteristics, let’s be clear on the differences between the learning paths for trading and the path for traditional knowledge-based professions like engineering, accounting or medicine.
I’ve often heard professional traders lament that those desiring to learn their craft see a few mouse clicks and some fairly elementary math and assume that they, too, can be consistently successful traders and investors in matter of days or weeks. Some pro traders will respond to this sentiment with a saying like, “A highly paid doctor or lawyer had to study for years before getting compensated handsomely. Who would expect to get paid like me after studying just a couple of weeks or months?”
And while part of that thought process is correct (the fact that there are knowledge based aspects to both trading and accounting), there is also a major fallacy in the argument.
Acquiring and demonstrating minimal proficiency in the basic knowledge set needed for engineering or accounting or law or medicine will lead to a well-paid position for the vast majority of participants. Not so for traders.
The learning path for a trader is more like that of a professional poker player. Demonstrating knowledge and proficiency in the basic skills only gets you a seat at the table, it doesn’t assure you of an income. While the poker-trading analogy isn’t perfect, their paths of progression are much more related than that of an doctor or an engineer and a trader.
Let’s look at one key area that makes trading very different from doctoring or engineering: the search for certainty or “What happens when you do everything right and it still turns out wrong?”
Doctors, engineers and indeed most professions live in a cause and effect world. If you do A, then a very high percentage of the time B will follow. There are notable exceptions, when a treatment doesn’t work or a product line gets contaminated, but by and large if you do the correct action, you get the correct result.
Trading is quite different. A trader can have the perfect set-up and entry, execute everything perfectly and still have the trade result in a loss. While traders lose money in this situation, that’s a problem perhaps but probably not the biggest problem. The largest problem for most people is the mental disconnect between cause (doing everything right) and effect (losing money). That result conflicts with their classical education which does not equip them with the tool set required for managing uncertain outcomes.
If we do things exactly right and still only get the desired result 60% of the time (or 50% or even 40% in long term trend following systems), traditional cause-and-effect thinking can easily make damaging conclusions. Since cause and effect seem only causally (no pun intended) related . . .
The rules really aren’t good and don’t serve me.
I no longer need to follow my rules exactly. (or at all)
I can tweak the rules so I am in better control (or at least feel like I’m in control)
When a trade or group of trades doesn’t come out well, our typical human reaction to solve a problem kicks in. Almost all traders and investors tweak their systems and strategies prematurely, based on too little data (too small of a sample size). So many people have been trained in an education system that teaches us to solve a problem if we don’t get the desired outcome with pure cause and effect thinking. Dealing with highly complex systems with great levels of uncertainty is just not in most people’s basic educational background or experience.
The good news is that cause-and-effect thinking works in most areas of our personal and professional life. And it is deeply rooted in our need to be right. It does not, however, serve traders well.
A useful solution to overcome our mental “cause and effect” disconnect is simple to describe, but it’s very difficult to adopt for the long term: broaden your view of trading results. We must allow our trading and investing strategies to play out long enough to reach their expected profitability. Fretting and wringing your hands over the results of every trade is not very useful and can lead to premature judgments and tweaking.
Each trade should be evaluated ONLY in terms of whether or not we followed our trading rules without regard for the dollars and cents results. Reset your cause and effect decision process only after you have a group of 30 or 50 trades (or an even higher number if you trade more frequently). Then you can evaluate cause and effect on a statistically valid data set, not on any one trade or group of trades that have so many more outside influences than one can ever hope to control.
Reviewing only large data sets creates a discipline that serves several purposes:
It reduces stress by telling our mind that no single trade matters very much, as long as we follow our rules.
It reduces the variability of results over time because we’re only adjusting our system or strategy after an appropriate interval of time.
It greatly increases the chances of profitability because we do fewer of the systematic things that cause losses.
No one trade is important (as long as you always respect your stop loss)—it is just a useful data point as part of the larger whole. Allow yourself and your strategy the luxury of time. And don’t be surprised if lower stress and greater profitability follow close behind.
Great Day & 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 SmartMoney.com and Financial Advisor magazine. You may contact D.R. at the Dr Van Tharp International Institute of Trading Mastery
Monday, January 25, 2010
The Market This Week after Last Week’s Big Decline
The global stock markets are still digesting the big helping of Obama’s bank restriction plans, along with China’s squeeze on its loan money supply. Actually China has been pulling in the reigns on its economy for awhile now, but the markets weren’t listening and they kept moving higher. Risk aversion may be the prudent thing again, and the dollar should be looking to gain for now. The US economy is not recovering in real terms yet. Any recovery is because of short term monetary and fiscal stimulus, not job growth and gross domestic product increases. With India too hot currently, look for consolidation there, and China almost as hot, look for a correction to buy in. Shorting an economy like China could be financial suicide even if you think its headed down small or big. China has so much money and positive things going for it long term, they can squeeze the biggest of them, and easily take out the rest. Give the fundamentals time to catch up with the higher prices is my suggestion. As for the USA, I think the decline last week will extend for awhile no matter what the news.
Important Global Economic Data Reports This Week
Monday: German Consumer Confidence
Tuesday: UK and USA Gross Domestic Product
Wednesday: Australia & German Consumer Price Index. USA New Home Sales. USA and New Zealand Central Bank Interest Rate Decision.
Thursday: German Un-employment Rate. USA Durable Goods Order. Japan Consumer Price Index and Jobless Rate
Friday: USA Personal Consumption and University of Michigan Confidence Survey
My Stock Pick this Week
Is a sell on a high end New York Retailer. Retail stocks followed the broader markets lower Friday. If this trade plan below works out we could be looking at a price of 10 or below possibly later on. Since October 15 2009, the stock price has been in a downtrend, and looks to be continuing. If you think high end consumption will continue then don’t short it. I’m betting it’s taking a downturn for awhile, with the cash market looking like its drying up in my opinion.
Sell Short Macy’s – Ticker M
Sell Entry: 15.44 Sell Stop
Take Profit Areas: 14.37 to 14.26, 13.30 to 13.20, 12.53, 11.15
Macy’s Company Profile
Macy’s, Inc., through its subsidiaries, operates department stores in the United States. Its retail stores and Internet Web sites sells a range of merchandise, including men’s, women’s, and children’s apparel and accessories; cosmetics; home furnishings; and other consumer goods. The company maintains Web sites, such as macys.com and bloomingdales.com. As of January 31, 2009, it operated approximately 840 retail stores in 45 states, the District of Columbia, Guam, and Puerto Rico under the names ‘Macy’s’ and ‘Bloomingdale’s’. The company was formerly known as Federated Department Stores, Inc. and changed its name to Macy’s, Inc. in June 2007. Macy’s, Inc. was founded in 1820 and is based in Cincinnati, Ohio with an additional office in New York, New York.
Click here to review and trial the Trading Software we used in determining our sell short position on M.
Click the Macy's Stock Chart for a larger view.
Friday, January 22, 2010
A Comment On Wednesday and Thursday Triple-Digit Stock Market Decline. Click here for the real market forecasts that predicted it.
On Wednesday, January 20, the DJIA took a 100-plus point leap over the equity cliff edge. As for why, well, the experts of Wall Street set their sites 7,400 miles to the east, on China. Here, the following headlines from the day step in:
* "US Stocks Slide On China Concern."
* "US Stock Rally Shanghaied"
* "Bears Dig A Hole To China."
Here's the gist:
The Dow and company got wind that China's Banking Regulatory Commission (CBRC, for short) told its banks to cease lending in January. Despite the CBRC's flat-out denial of said rumor, the specter of fear still managed to suck the optimism out of the U.S. marketplace. In the words of one news source:
"People are concerned that the stock rally so far has been driven by liquidity. If China's pulling away, it's the first step in tighter monetary policy..." MarketWatch)
"First Step" my asparagus. Fiscal tightening by China's monetary authorities is a long-established practice. Ever since China's economic steed charged out of the gate -- after decades of not even having a horse in the race -- its officials have had their hands tightly on the reigns:
* December 2006: China's Banking Regulatory Commission urged lenders to call in all outstanding loans, discourage the creation of new mutual funds, and deter foreign inflows.
* January 2007: China's Security Regulatory Council revealed that 70% of the companies listed on the Shanghai Stock Index were "not good by Western standards and will probably lose money."
* May 2007: China's Finance Ministry triples the "stamp tax" on stock trades.
* June 2006 to October 2007: China's Central Bank raises the bank reserve ratio NINE times to a 10-year high of 13%, all the while increasing interest rates FIVE Times.
YET -- from June 2005 to October 2007, the Shanghai Composite Index bulldozed over every attempt to cool it down, soaring 500% to an all-time record. All the while, the United States stock market joined in the boom to never-before-seen heights.
Then, on January 12, 2010, the CBRC raised its reserve rates to 16% for the first time since June 2008. That day, one news source stated the obvious with this remark: "China Becomes First Major Economy To Slam On The Brakes" while the rest of the world puts its monetary-easing pedal to the metal.
On January 12, the CBRC also raised the interest on inter-bank loans and short-term treasury bonds in order to prevent an overheating of economic growth.
And once again, China's stock market continued to rally right alongside the Dow Industrials in the full week following the CBRC's most recent lever pull. So, the very notion that US stocks all of a sudden found China's long-standing policy to be cause for concern -- is straight out ridiculous.
Don't waste time in fundamental fallacies. The market's technical picture can tell you what's really going on before fundamentals catch up.
Click here to review more new school financial intelligence and what real expert market forecasting is all about.
Wednesday, January 20, 2010
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Tuesday, January 19, 2010
Click Here For The Free 13-Page 2010 Important Investment Report
Please recall with me the prevailing investor sentiment from this time last year.
U.S. stocks had been in strong decline for more than a year. Some of the most celebrated bulls had turned into bears, and the few bears that did exist before the downturn had become even more bearish. The Daily Sentiment Index for the S&P registered an astonishing 3 percent bulls -- virtually no one was betting on the upside -- and the bleakest of forecasts for 2009 called for nothing short of financial apocalypse.
But well-known contrarian analyst Robert Prechter took the opposite side of the trade. Prechter, a long-time bear, emerged as a solitary bullish voice among overwhelming bearishness. After closing out a record short recommendation that gained 800 downside points in the S&P, he issued the following bullish warning to bears:
"The market is compressed, and when it finds a bottom and rallies, it will be sharp and scary for anyone who is short."
In the following days, the mainstream media reported that "perma-bear" Robert Prechter had turned bullish -- the reports were only half true. Prechter had, in fact, turned intermediate-term bullish, but he stopped short of recommending average investors to jump back in. Why?
Prechter saw something on the horizon that the shortsighted mainstream market watchers did not, which brings me to the untold portion of this story …
In Prechter's eyes, the bear market is far from over, and what he expects to happen after the current rally ends is significantly important to how you position your portfolio now.
Prechter's firm, Elliott Wave International, is now offering for a limited time The Most Important Investment Report You'll Read in 2010. Inside, Prechter reveals his big-picture outlook for U.S. stocks and the U.S. economy. The eye-opening 13-page report, originally published for paying subscribers to his Elliott Wave Theorist, examines the government's unprecedented involvement in the financial markets and private enterprise. It reveals what's already taken place in candid detail then focuses you on what the government's measures will actually do for the U.S. financial markets and economy.
Be assured, this report delivers analysis you will not find on the front page of The New York Times or Wall Street Journal. It delivers independent insights from the man who saw the bear market -- and today's bear market rally -- coming when virtually no one else did.
But hurry, this free 13-page report is available for a limited-time only due to its timely content.
Click Here For the Free 13-page Report
Robert Prechter's firm Elliott Wave International has just released its annual "Most Important Report of 2010." Inside, Prechter delivers hard facts, eye-opening charts and straightforward commentary to help you take advantage of the opportunities – and avoid the dangerous pitfalls – that you will face in 2010. You'll get analysis and forecasts you can act on, and you'll learn what the government's unprecedented involvement in the financial markets will mean for your portfolio in 2010 and beyond.
Monday, January 18, 2010
The Market Week Ahead
Earnings reports are in full swing this week and month now. Will the earnings reports keep the stock market rally moving forward? The reality of the past is that even good earnings reports lag stock equity prices. So relying on earnings report to propel stock prices is not as good a indicator as you might think. Some of the earnings reports coming in this week are General Electric, Citigroup, Goldman Sachs, Bank of America, Google, and IBM. There’s another potentially big market moving event this week. It’s the Massachusetts Senator race on Tuesday. Depending upon how that goes, it could be a plus or negative for the Obama administration, their reforms, and the financial markets.
Global Major Economic Data Reports This Week
Tuesday: German ZEW Survey, Bank of Canada Interest Rate Decision, New Zealand Consumer Prices
Wednesday: Bank of England Minutes and UK Job Claims, Canada Consumer Prices
Thursday: JPY Coincident Index, Switzerland & UK Money Supplies, USA Philadelphia Report, Canada Business Outlook.
Friday: UK and Canada Retails Sales
My Stock Pick this Week
Is a short sell on a big Indian Communications company. Long term I’m totally bullish on the India markets. Right now, it’s had a big upside run, and needs some cooling off in my opinion to see if the fundamentals can keep up with the current high valuations now and going forward. This company’s PE ratio is now about 65. India is a big grower for sure going forward, but I would looking to buy into this stock at lower prices indicated below in my short sell position take profit targets. The sell-off from the 20 area at the end of October 09 has more legs I think from a technical and fundamental point of view in the short to intermediate term. I would possibly start to get interested in going long on this company if the price was south of 13 with the 8 to 10 area possibly being very good prices to go long.
Sell Position: Tata Communications Ticker TCL
Sell Entry: 15.76
Stop-Loss: 16.26 or Higher
Take Profit Areas: 15.26 to 14.26, 14.03 to 13.01, 13.01 to 12.70, 10.88 to 10.63, 8.10 to 7.91
Tata Communications Company Profile
Tata Communications Limited, together with its subsidiaries, provides various telecommunication services in India and internationally. The company operates in three segments: Wholesale Voice, Enterprise and Carrier Data, and Other Services. The Wholesale Voice segment provides international long distance and national long distance voice services. The Enterprise and Carrier Data segment offers corporate data transmission services, such as international private leased circuits, frame relay, Internet leased line circuits, and national private leased circuits. This segment provides IP networks and wholesale IP transit services to tier-2 ISPS, and regional carriers; and value-added services, such as content delivery networks. It also offers mobile signaling services, such as signal conversion and managed roaming services; virtual private networks and associated managed services, including multi protocol label switching; Ethernet services; Internet access; managed hosting; messaging; Internet telephony; collaboration and conferencing services; managed security services; and other professional services. The Other Services segment provides global roaming, Internet, virtual private network, data centre, and TV up-linking services. This segment offers various Internet and broadband services, such as connectivity, messaging, Internet telephony, wi-fi services, and a range of content services. The company, formerly known as Videsh Sanchar Nigam Limited, was founded in 1986 and is based in Mumbai, India. Tata Communications Limited is a part of the Tata Group.
Click here to review and trial the Trading Software we used in determining our sell short position on TCL.
Click the Tata Communications Stock Chart for a larger view.
Thursday, January 14, 2010
Think You're A Forex Genius?
You know, being in this industry, you get used to alot of big egos.
These 'so-called' experts, boast and brag about how big their accounts have grown, what big risks they've taken and how they've basically got the Forex know-how locked up.
Most of the time, the only thing they've got locked up, is hot air.
But once in a great while, you come across traders that just flat-out, know their stuff. These types are what I call, "Forex Geniuses."
Click Here To Test Your Forex Knowledge, Just Type In Your Email and I'll Send You The Quiz Immediately to Your Inbox:
Are you one of these traders? Are YOU a Forex Genius?
While I shudder at calling myself a genius (hey, a guy's gotta have a little humility!), I've been around the Forex block a time or two - and have devised a short 9-question test that can help measure Forex prowess.
I won't give away all the questions but expect to be quizzed on certain currency pairs, currency trading times and the 'L' word - leverage. Feel free to do your homework beforehand but no cheating when it comes to taking the actual quiz!
Obviously, not everyone who aces this quiz is a Forex Genius HOWEVER, those who are 'in the know' and can answer these questions correctly, are probably ahead of the game and much more likely to be successful than those who don't take the time to familiarize themselves with these principles.
So how about it? Test your Forex knowledge and find out if you truly are worthy of the being called a Forex Genius.
Click here to pop in your email and we'll send you my Forex Genius Quiz right now.
Good day and good forex trading.
Wednesday, January 13, 2010
How to Trade in a Fast-Moving Bear Market Trading Seminar
Intensive LIVE Trading Course | World Tour
London England January 18 & 19, 2010
Click here for more information and registration.
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 for 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
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.
Click here for more information and registration.
Tuesday, January 12, 2010
Click here for Dr Van Tharp's Trading Home Study Programs & Workshops
Blueprint for Trading Success Workshop
Presented by Dr. Van K. Tharp International Institute of Trading Mastery
January 14-16 Thursday-Saturday Cary North Carolina
Click Here To Review More Information and Registration for the "Blueprint Trading Success" Workshop
You know you want to be successful in the markets, but you also know where you are right now. You have so many ideas but how do you transform all of that into real forward motion?
Blueprint attendees create a customized, comprehensive plan that details exactly what they have to do to reach their trading goals. Are you ready for that?
Through his modeling work with top traders, Van Tharp has discovered the blueprint for trading success that will ensure you consistent prosperity as a trader.
This course is a complete structured program that will launch you to a more advanced skill level in your trading. You will learn strategic, focused steps that will serve you throughout your entire trading career whether you are a beginner or have years of trading experience.
During these intensive, hands-on three days, you will learn clear and concise tasks to master that will take your trading from ho-hum to visionary. You will leave with a thorough checklist of action steps to guide you to a higher level of performance.
This workshop illustrates the relationships among the steps so that the process is logical and reasonable. Moreover, Van Tharp will show you how to take each step experientially, so you really get it. Dr. Tharp is an expert in delivering elicitation questions to bring forth each person's most important issues.
"Well structured and put together expertly. Van is clearly highly experienced and knowledgeable and presents his material with enthusiasm. The fact that he speaks from experience makes the learning experience that much richer." Michael Tan, Australia.
Click here to learn more about and register for the Blueprint for Trading Success Seminar
Monday, January 11, 2010
First Happy Prosperous New Year! Knowledge > Dated Goals > Plan > Action > Success
The Market Now and Ahead
China is to allow stock index futures trading, short selling, and trading on margin now. Equities went higher into the New Year and may continue up as the next earnings season starts. I still think the markets are headed for another fall of either minor and or major proportions longer term. In the meantime, check your risk reward ratio before going long into this market is my best suggestion unless you’re buying into some dividend plays for long term, as they have fully priced valuations right now, and as you will see below on one of them. The global data report calendar this week is loaded with potentially major market moving reports. This is looking to be a very fun and potentially rewarding week.
Important Major Global Economic Data Reports This Week
Monday: Switzerland Retail Sales, Canada Housing & Building Reports, New Zealand Business Opinion, Japan Trade Balance and Current Account.
Tuesday: Japan Watchers Survey, UK Retail Sales, Housing, and Trade Balance. Canada Housing and Trade, USA Trade Balance.
Wednesday: UK & Germany Gross Domestic Product, Germany Public Finance Balance, UK & Euro Zone Industrial Production, USA Beige Book.
Thursday: Australia Unemployment, ECB Central Bank Interest Rate Decision, Germany Consumer Prices, USA Retail Sales and Import Prices.
Friday: Euro Zone & USA Consumer Prices, USA Michigan Confidence Survey
My First Stock Pick of 2010
Is a global healthcare behemoth and is almost fully valued right now in my opinion. If they can keep earnings stable and moving up, which they could, then my trade plan below may work out. If not, if you own it, it’s because of the 3% or so dividend or any number of other reasons for a longer term return. If you’re going to go long at this current price & time, do it with the leaders and avoid the laggards, especially right now.
Buy Long Johnson & Johnson – Ticker JNJ
Buy Entry: 63.05 to 64.26
Stop-Loss: 62.00 or Lower or 8% from Your Buy Entry Price
Take Profit Areas: 65.52 to 66.15, 67.09 to 67.85, 69.49 to 70.28, 74.82 to 75.67, 81.42 to 82.34
Johnson & Johnson Company Profile
Johnson & Johnson engages in the research and development, manufacture, and sale of various products in the health care field worldwide. Its Consumer segment provides products used in baby care, skin care, oral care, wound care, and women’s health care fields, as well as nutritional and over-the-counter pharmaceutical products under JOHNSON’S, AVEENO, CLEAN & CLEAR, NEUTROGENA, RoC, LUBRIDERM, LISTERINE, REACH, CAREFREE, STAYFREE, SPLENDA, TYLENOL, SUDAFED, ZYRTEC, MOTRIN IB, and PEPCID AC names. The company’s Pharmaceutical segment offers products in various therapeutic areas, such as anti-infective, antipsychotic, cardiovascular, contraceptive, dermatology, gastrointestinal, hematology, immunology, neurology, oncology, pain management, urology, and virology. Its products include REMICADE, a biologic to treat Crohn’s disease, ankylosing spondylitis, psoriasis, psoriatic arthritis, ulcerative colitis, and used to treat rheumatoid arthritis; TOPAMAX, for adjunctive and monotherapy use in epilepsy, as well as for treating migraines; PROCRIT that stimulates red blood cell production; RISPERDAL oral, a medication to treat the symptoms of schizophrenia, bipolar mania, and irritability associated with autistic behavior in indicated patients; RISPERDAL CONSTA, an injectable, and INVEGATM Extended-Release tablets to treat schizophrenia; LEVAQUIN and FLOXIN, anti-infective products; CONCERTA, a product for treating attention deficit hyperactivity disorder; ACIPHEX/PARIET, a proton pump inhibitor; and DURAGESIC/Fentanyl Transdermal, a treatment for chronic pain. Johnson & Johnson’s Medical Devices and Diagnostics segment offers circulatory disease management, orthopaedic joint reconstruction and spinal care and sports medicine, surgical care and women’s health, minimally invasive surgical, blood glucose monitoring and insulin delivery, and diagnostic products, as well as disposable contact lenses. The company was founded in 1886 and is based in New Brunswick, New Jersey.
Click here to review and trial the Trading Software we used in determining our buy long position on JNJ.
Click the Johnson & Johnson Stock Chart for a larger view.
Friday, January 08, 2010
Click here for Orange Juice and Other Futures Forecasting Services
Right now, being a fundamental analyst assigned to the Orange Juice market is a lot like being Tom Brady's sports agent: the job is pretty much done for you.
Here's the gist: Over the last month, OJ prices have taken the commodity field by storm, scoring rally after rally to land at their highest level in two years. AND -- the entire time, OJ's fundamental backdrop has been supported by a "perfect storm" of bullish conditions; namely: a record-setting cold snap across much of the southeast United States, growing concerns of an unmanageable flu season, and fears of frost damage to orange crops in the world's second-largest producer Florida.
"As Temperatures Plummet, OJ Prices Heat Up," wrote a January 6 ABC News report, the same day OJ futures triggered their exchange-set upside limit.
Like I said before -- it takes no work at all to pin high OJ prices on polar-like weather conditions. BUT what about seeing OJ's upside potential BEFORE the icy winter blasted into the southern U.S.?
Now that would be a story worth knowing.
Orange Juice Analysis: Drink It In:
The January 6 Daily Futures Junctures presents labeled price charts, objective insight, and live, video analysis of the near-term trend underway in OJ. Get the complete publication today.
Here's the thing: Today's positive fundamentals only complement a bullish Elliott wave pattern that has long since been underway in OJ. On this, EWI's chief commodity analyst and long-time Futures Junctures Service editor Jeffrey Kennedy presented the following close-up of OJ in the August 2009 Monthly Futures Junctures.
At the time, OJ prices stood well below the $1.00 mark as the mainstream experts described a big "squeeze" of minimal bullish data: i.e. sufficient supply, competitive retail values, and the "mildest" Atlantic basic hurricane season since 1997. As one popular news source put it at the time, "Basically, with no news on the weather front, this market's really just trading sideways."
But, as Jeffrey's chart above shows, the technical "news" front was far from quiet this past summer; Jeffrey's wave count called for the continuation of OJ's uptrend in a powerful impulsive rally.
The best part is, Jeffrey revisits the orange juice market in the January 6, 2010 Daily Futures Junctures to reveal where, and when the next big move could begin.
Get the complete story today, absolutely risk-free.
Thursday, January 07, 2010
Click here for Interest Rate Specialty Services
Imagine the disappointment the Japanese faced in the 1990s. Their 1980s boom created enough wealth to buy landmarks like Rockefeller Center and Pebble Beach. But the 1990s turned inflation into deflation. Stimulus packages and bailouts failed to prop up Japan's property market and to prevent the deflationary collapse.
Now the United States government is trying to do the same thing.
One argument inflationists make is that the U.S. can’t have deflation because it will simply print enough money to counteract it. But the Japanese tried that and failed, but interestingly, it did succeed in holding up one economic statistic -- the GDP number. Even as Japan's stock and real estate bubbles imploded (commercial properties fell by 87%!), Japan's GDP continued to press higher, as seen in the chart.
Why did GDP continue to grow amidst the deflationary collapse? First, the rest of the world was still growing, so Japanese exporters still had customers. Second, as my recent Weekly Insight pointed out, GDP is a crude instrument that measures only money spent and not the source of the spending. One reason the Japanese kept thinking their economy was on the verge of improving was the mistaken belief that GDP is a measure of economic performance. It's not!
The ivory-tower idea that the U.S. can create inflation via the printing press has the real-world example of Japan as a case study against it. In fact, Japanese 3-month yields have been below 1% since 1995, which shows that deflation can persist for a long time despite the supposedly inflationary policies such as low interest rates, quantitative easing and budget deficits.
Many argue that the U.S. is not like Japan. That is true! Japan was in a much better position to fight off deflation than the U.S. is presently, based on these factors:
1. Japan had a large export sector that benefited from a weak currency. The U.S. doesn’t.
2. Japan had a high savings rate going into the bust. The U.S. doesn’t.
3. Japan had a current account surplus. The U.S. has a current account deficit of about $2 billion per month. This means that the U.S. needs to import $2B every month.
If Bob Prechter's forecast for continued weakness in stocks and economy comes true, the Fed, Congress and the President will have a good reason to try and inflate at all costs. However, similar to Japan's experience, although the printing and spending may hold up GDP, it won't necessarily hold up assets and save the U.S. economy from sliding into a full-blown depression.
Jason FarkasA chance reading of a book on technical analysis and the Austrian school of economics eventually led Jason Farkas, CMT, to Elliott Wave International. Prior to joining EWI Jason worked for 14 years as a futures, options and equity trader. Jason has been tutored by some of the best investment minds, including legendary trader Dick Diamond. Jason's Weekly Insights appear every Friday in EWI's intensive Currency and Interest Rates Specialty Services.
Click Here For More Specialty Services Information
Wednesday, January 06, 2010
I have to admit, this is a little weird.
It's a video that reveals a story about the #1 reason why most people lose money trading Forex, and how the "story-teller" himself was ultimately able to help those people make a life-altering "shift" in their trading.
Why do I say it's "weird"? Maybe because it's about stuff most people are afraid to admit about themselves & their trading.
Click here to check out this "weird" Forex story:
The Forex trading video will show you why you're still losing money in the Forex market, & how to finally become an independent trader.
You'll be pleased to know this isn't any type of gimmick, these are REAL techniques based on 35+ years of trading experience.
You're going to want to watch the entire video to see exactly how this discovery, how thousands have now become independent Forex traders, & how you can do the same by simply copying it. Don't forget! Watch the entire video, because you will be surprised!
Click here for the Forex Nitty Gritty
As you immerse yourself in the story, see how close it is to YOUR Forex story.
(pay close attention)
p.s. Do you think it's "weird"?
Tuesday, January 05, 2010
Around the globe, emerging economies have become a fixture of business news and investor speculation. But for an average, longer-term investor like myself, does it really make sense to invest in a market a world away from home? To get some answers, I caught up with EWI Asian-Pacific Financial Forecast Editor Mark Galasiewski. We discussed one of the indexes he's been most optimistic about over the past year: the SENSEX.
Ian Forrest: For the past few years, fast-growing emerging economies have been all over the news. For investors interested in Asian markets, China is obviously a center of attention. Why should I be interested in India?
Mark Galasiewski: Emerging markets are going to offer some of the best long-term stock market opportunities for many years to come. Among emerging market stock indexes, India’s is one of the oldest, and the multi-decade patterns that we’ve identified in it offer the clearest long-term bullish view at present. India also offers more investment vehicles for international investors to participate in compared to other emerging markets that are in bull markets. Indians, though, are very lucky because they have so many options right at home.
IF: I tend to be more of a long-term investor; are emerging markets too unstable for me? Is India better suited to a particular kind of investment strategy?
MG: Anyone who’s looking for a multi-generational bull market to invest in should be interested in India. Long-term investors will probably appreciate our monthly publication, The Asian-Pacific Financial Forecast. Short-term traders may be interested in taking advantage of the greater daily swings in India’s stock market compared to those in most developed markets. Our Asian-Pacific Short-Term Update service publishes commentary on India’s CNX Nifty Index three times a week.
IF: That sounds like a pretty strong endorsement. So is this the time to get into the Bombay exchange?
MG: Actually, depending on when people are reading this, and your investment timeframe, now may not be the best time to invest in India. So you’ll have to subscribe to our Asian-Pacific stock market reports to determine the best entry and exit points. Remember, though, we do not offer trading advice. Our services try to identify the price patterns as they unfold, but it’s up to you to determine whether and when to buy or sell.
Moves in the Sensex: Follow Mark Galsiewski's analysis of Indian markets with The Asian-Pacific Financial Forecast - read it risk-free online. Here's How.
IF: You released an interim update in March that you've been referring to in The Asian-Pacific Financial Forecast pretty regularly. Why should we care about an interim report that you released over nine months ago? How valid can that still be?
MG: In the mid-1940s, at a time far more nervous than the present, Ralph Nelson Elliott said that the United States’ bull market would continue to run for “several decades.” He was able to make that forecast because of the clear long-term wave patterns that he had identified in the Dow Jones Industrial Average. None of Elliott’s intellectual successors—including Charles Collins, Hamilton Bolton, A.J. Frost, and EWI’s Founder and President Robert Prechter, Jr.—made any changes to Elliott’s original wave count. We believe that our forecast for India’s SENSEX will similarly stand the test of time.
IF: A lot of folks are worried about U.S. markets and looking to other markets to insulate themselves from any further turbulence in the NYSE down the road. How immune would the SENSEX be to a downturn in the U.S. economy?
MG: Elliott made a key observation about markets: You have to analyze each one independently. Think of the difference between Japan and the United States in the 1990s. Or how Australia’s stock market recovered to new all-time highs in 1934, just five years after the 1929 top. Or even how far above its year 2000 high the SENSEX trades now, while the S&P 500 sits well below its own. Those divergences represent the differences in each market’s long-term wave pattern. The major world indexes may ebb and flow together, but that doesn’t mean their structures are exactly the same.
IF: Based on some of your previous writing, I checked out some Indian news outlets. I quickly became aware of three things: I don't know what a lakh crore is; the politics make no sense to me; and I can't tell whose reporting is reliable. Are there any good voices out there for me to pay attention to? What's the best way to follow Indian financial news if you live outside of India?
MG: When you look at financial markets through the lens of the Wave Principle, after a while you will understand that news and opinions are useless. Very often the market appears to do the opposite of what it should—or the opposite of what it did last time under the same circumstances. Conventional analysts have no choice but to dismiss such inconvenient truths, because they have no other model to help them make sense of events. But we do have such a model: Markets are patterned according to the Wave Principle, and those patterns repeat over and over again at all degrees of trend—from intraday to multi-century. It’s a perspective you just can’t get anywhere else. It doesn’t always give the right answer—no methodology does—but we think it’s still the best forecasting method available anywhere.
IF: How can a U.S. investor invest in India?
MG: There are several ETFs and mutual funds that one can buy on U.S. exchanges. Search for “India ETF” or “India mutual fund” on the Internet, and they’ll come right up.
IF: Sounds easy enough. So what can the waves tell us about what's coming up for the SENSEX right now?
MG: Nice try! You know I can't just give that away. You'll have to subscribe to find out.
Mark Galasiewski regularly covers the SENSEX in EWI's monthly Asian-Pacific Financial Forecast. Get access to his latest forecasts and analysis risk-free.
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