Monday, November 28, 2011
I don't have a buy or sell stock pick this week, but to say, if and when I see the SP500 taking out the October 03 low of 1099.23. I would be a buyer one tick or more below this major support level for another bounce back up into major resistance at the 1200 to 1250 area. In the meantime, I have some further analysis below on the SP500 and Gold.
Is This December Similar to 2007 & 2008 for Gold & Stocks?
Thus far in 2011 the overall stock market movement has been much different from what we had in 2010. This year we have seen nothing but sideways to lower prices with wild price swings on a day to day basis. There just has not been any really solid trends to take advantage of this year. Instead we had to actively trade the oversold dips and sell into the overbought rallies to just pull money out of the market on a monthly basis. Last year we saw 3 major rallies that lasted several months making it easy for anyone who bought into the trend to make money if managed properly.
Looking forward to 2012 it looks as though we are going to see some major changes unfold globally that will change the way we do things live our lives. Unfortunately its a very negative outlook but I do have hope that something will be done to perserve are somewhat normal lifestyles. I’m not one to talk doom and gloom, there are enough of those guys out there already so lets stick with the charts and focus on what is unfolding now in the present and how to take advantage of it…
The charts below show what I feel is likely to happen going into the new year IF we don’t get any major headline news in Europe that triggers another selloff.
There are a lot of different things unfolding within stocks, commodities, currencies and bonds right now. And it is imporatnt to know that investments are inter-connected in some way. For example, if one investment moves sharply in one direction it will have an effect on other investment classes.
My eye is focused on the US Dollar Index which has recently had a strong run up in price. For the past couple years we have seen stocks fall when the dollar moves up. So with the dollar index now trading at a key resistance level we should see the dollar top out for a few weeks and spark a Christmas rally into year end. After that, all bets are off and we re-analyze…
On the flop side of things, if Europe comes out with major negative headline news we could see the dollar index continue its rally and breakthrough this resistance level. If the dollar moves higher from here we could easily see a multi month run up in the dollar. You do not want to be long stocks if this happens, get short stocks and hold on tight.
Gold Daily Chart Analysis:
Here is my positive out look for gold and what I feel is likely to unfold near term. But keep in mind what I just said about the US dollar index above. If the dollar continues its rally and breaks out it could actually put some pressure on gold. I know gold is a safe haven so I do expect it to hold up, but a strong dollar will neutralize a lot of the buying in gold in my opinion.
SP500 Daily Charts:
Stocks should have a solid bounce this December if the dollar finds resistance and pulls back in the coming weeks. I am expecting a bounce of 5-10% if all goes as planned.
Christmas Holiday Rally Trading Conclusion:
In short, we are entering a tough time to trade the market. Volatility is low, there are a few holidays and typically we see volume thin out as December unfolds. Light volume generally favors higher prices for stocks and commodities which is one of the reasons we get the holiday lift in prices.
The recent selloff in stocks is looking overdone to the down side and ready to bounce any day. So I am looking for signals to get long the SP500. Overall risk remains very high as sellers are still in control of the market and because we are looking to put on a trade against the intermediate trend which is down.
On Friday morning myself and my followers exited our short position on the SP500 at the open locking in 13.5% profit. We exited the position because the intraday charts are showing signs of a potential bottom and we want to avoid the tear your face off short covering rally that I feel is just around the corner. Now we are waiting for a another low risk setup and will take action to go long or short depending how things unfold in Europe.
By Chris Vermeulen Gold and Oil Forecasts
Thursday, November 24, 2011
Happy Thanksgiving! We are forever grateful to you our readers, for everything we have now and what's to come in our future. We are especially grateful to the men and women in military duty protecting the freedoms and liberty of all people around the world.
The months of November and December are the second strongest back to back months for the financial markets. Many traders and investors use this time of the year to reap big gains as they close the year out. The fact that most traders and investors are sitting in cash and underweight stocks in their portfolio’s leaves me to believe a Santa Clause rally is just around the corner. Reason being is everyone has cash on hand to buy stocks because they are selling their positions in this pullback we are in right now. I know traders well enough, they will buy back into the market trying to catch the holiday rally in the coming weeks.
Subscribers and myself have been short the SP500 for a couple weeks after watching the broad market become overbought and sentiment levels became overly bullish with greedy pigs thinking they could buy stocks after a massive month long rally that had not pullback. Once the selling started you would either get you head handed to you or you were going to make a killing buying leveraged inverse ETFs.
Those who arrived late to the rally are the ones selling out of their positions this week. The interesting thing about this week’s market condition is that I have not seeing any real panic selling in stocks, and I’m not seeing the volatility index spike in value yet.
What does this mean? Well it means we could actually see another big dip in the market which should last 1-2 days and then we get a sharp reversal to the upside.
Take a look at the SP500 & Volatility index below:
This chart allows us to get a feel for fear in the market. Me being a contrarian trader, I focus on market sentiment extremes. When the masses are losing money hand over fist I’m generally on the other side of that trade with open arms. Trading off fear is one of the easiest ways to trade the market. That is because fear is much more powerful than greed and it shows up better on the charts. Spotting panic selloff bottoms is something that can be traded successfully if you know what to look for and how to trade them.
On the chart you can see the pullbacks in the SP500 which triggered a panic selling spike in my green indicator. What I look for is a pullback in the SP500 and for my panic selling indicator to spike over 20. When that happens I start watching the volatility index for a spike also. The good news is that the volatility index typically rises the following day making my panic indicator more of a leading one.
I could write a 20 page report with cheap ink going into depth this with topic, but that’s not the point of this report. Just realize that the stock market is likely going to put in a bottom very soon and likely end with a STRONG panic selling washout this week or next. If you want to learn more about how to trade market sentiment and panic selling you can read my strategy which was published in Futures Magazine.
Prepare for a sharp drop in the market which should kick start a holiday rally in the next few trading sessions.
Also consider trading precious metals and the forex pairs as they will be moving big if and when stocks take a big upside reversal.
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Tuesday, November 22, 2011
Over the recent couple months the precious metals charts have made some sizable moves. Most investors and traders were caught off guard by the sharp avalanche type selloff and lost a lot of hard earned capital in just a few trading sessions. Gold dropped over 20% and silver a whopping 40%.
The crazy thing about all this is that these types of moves in precious metals can be avoided and even taken advantage of in certain situations. There is no reason for anyone to continue holding on to those positions after they pullback 6% of more because of the type of price and volume action both gold and silver had been displaying in the past few sessions.
I warned investors on Aug 31st that precious metals were about to top any day and that protective stops should be tightened or taking profits was also a smart move. It was only 2 trading sessions later that precious metals topped and went into a free fall. You can get my detailed analysis if you read my report “Dollar’s On the Verge of a Relief Rally Look Out!”.
A couple weeks later once precious metals has found support and the uneducated investor’s were licking their wounds wondering what the heck just happened to their trading accounts… I put out another report but this time with a bullish outlook. Silver was currently trading at $29.96 and I had a $35-$36 price target over the next two months. Gold was trading down at $1611 and I saw it heading back up to $1750-$1775 area before finding resistance and pulling back. I considered using a financial translation agency to help me convert the statistics but decided to tackle this issue myself. Both these forecasts were reached over the next two months. You can quickly review the report called “Precious Metals Charts Point to higher Prices” for more info.
With all that said, what exactly are the charts saying right now?
Current Precious Metals Charts Summary:
The past 6 weeks we have been watching both gold and silver struggle to hold up but they have managed to grind their way to my price targets. After reaching those targets a couple weeks ago sellers have stepped back into the precious metals market and put pressure these metals.
Last week gold and silver started to pullback in a big way with rising volume. This could just be the start of something much larger which I will cover in just a moment.
The wild card for precious metals and for every stock and commodity for that matter is Europe. Every other day there seems to be headline news moving the market and most of takes place in overnight trading for those of us living in North America. It’s this wild card which is keeping me from getting aggressive in the market right now.
Let’s take a look at the charts.
Silver Precious Metals Chart:
Silver is currently in a down trend and may be starting another leg down this week. Long term I am bullish but for the next couple months I am remain neutral to bearish for silver until it forms a base to start a new uptrend from.
Gold Precious Metals Chart:
Currently I am neutral/bearish on gold. If it can trade sideways for a few weeks then I will become bullish.
Precious Metals Charts Conclusion:
In short, I feel there is a good chance the US dollar will continue higher and if that happens we should see strong selling in North American equities, commodities and likely on the precious metals charts.
Financial markets around the world are at a tipping point meaning something really big is about to take place. The question is which way will investment move. The only thing we can do is trade with the current trends, price patterns and volume.
At this time I still see a higher dollar and that means lower stocks and commodities. This could change at the drop of a hat depending on the news that comes out of Europe so the key to trading right now is to remain cash rich and taking only small positions in the market.
If you would like learn more about etf trading and receive my daily pre-market videos, intraday updates and detailed trade alerts which even the most novice trader can follow then click here to join my free trading education newsletter and my premium trading alert service.
By Chris Vermeulen
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Monday, November 21, 2011
I've got a low-risk high-reward sell-short stock pick on Autodesk software this week. I see the major market indicies topping out here near term with a retest of the September October lows.
According to Zacks Investment Research, Autodesk Inc Nasdaq ADSK reported third quarter 2012 earnings of 36 cents per share, beating the Zacks Consensus Estimate by 2 cents. Earnings per share, including stock-based compensation but excluding one-time charges increased 33.3% year over year, driven by continued growth in revenues across geographies and business segments.
Revenues increased 15.1% year over year to $548.6 million in the reported quarter, beating the Zacks Consensus Estimate of $544.0 million. Revenues were also at the higher end of management’s guided range of $535.0 million to $550.0 million.
The year-over-year growth in revenues was driven by higher license and other revenues, which increased 17.5% year over year to $331.4 million. Maintenance revenues rose 11.6% year over year to $217.2 million in the quarter. Additionally, the revenues for the quarter were boosted by 36.0% increase on a year-over-year basis in the Suites revenue and an increase in the platform solutions and emerging business segments.
On a segmental basis, Platform Solutions and Emerging Business revenues jumped 21.0% year over year to $210.0 million in the reported quarter.
Revenues from the Architecture, Engineering and Construction business segment were $152.0 million, up 12.0% year over year, while Manufacturing revenues increased 14.0% year over year to $134.0 million in the quarter. Revenues from the Media and Entertainment business rose 6.0% year over year to $53.0 million in the quarter.
Autodesk posted significant upside in all of its geographical regions on the back of continued adoption of its products. Revenues in America jumped 12.0% year over year to $200.0 million.
International businesses continued its strong performance during the quarter. EMEA revenues climbed 10.0% year over year to $202.0 million. Asia-Pacific revenues escalated 28.0% year over year to $146.0 million.
Revenues from emerging economies (16.0% of the total revenue) climbed 15.0% year over year to $87.0 million.
Gross profit (including stock-based compensation but excluding one-time charges) was $500.1 million, up 14.5% year over year. However, gross margin decreased 40 basis points (bps) from the year-ago quarter to 91.2%.
Operating expenses (including stock-based compensation but excluding one-time charges) increased 10.6% year over year to $390.6 million, primarily attributable to higher marketing & sales expenses (up 11.4% year over year) and research & development expenses (up 15.0% year over year) which fully offset a 4.8% year-over-year decline in the general and administrative expenses. However, operating expenses, as a percentage of revenue, contracted 290 bps to 71.2% in the quarter.
Operating income (including stock-based compensation but excluding one-time charges) of $109.5 million was up 31.5% year over year. Operating margin came in at 20.0% in the quarter, up 250 bps year over year, attributable to strong revenue growth and cost controls in the quarter.
Balance Sheet and Cash Flow
Autodesk’s balance sheet remains strong with no debt. The company exited the third quarter of 2012 with total cash and cash equivalents of $1.34 billion, compared with $1.37 billion in the previous quarter. The decrease was due to the closing of 10 strategic acquisitions during the quarter. Cash flow from operating activities was $138.0 million compared with $132.4 million in the prior quarter.
For fourth quarter 2012, Autodesk expects revenues in the range of $575.0 million to $590.0 million. The Zacks Consensus Estimate is pegged at $581.0 million.
GAAP EPS is expected in the range of 26 cents to 29 cents. Non-GAAP EPS is expected in the 42 cents to 45 cents range. The Zacks Consensus Estimate is currently pegged at 34 cents per share, which is evidently below the guided range.
For fiscal 2012, Autodesk expects revenues in the range of $2.20 billion to $2.21 billion. GAAP EPS is expected in the range of $1.17 to $1.20 and non-GAAP EPS is expected in the range of $1.70 to $1.73. The Zacks Consensus Estimate is pegged at $1.39. Autodesk expects non-GAAP operating margin to improve between 210 and 240 basis points in fiscal 2012.
Additionally, the company provided a sneak peak into their fiscal 2013. For fiscal 2013, Autodesk expects revenues to increase 10.0% on a year-over-year basis, with about 150 basis points increase in the GAAP operating margin and roughly 200 basis points increase in non-GAAP operating margin, over the fiscal 2012 figures.
In our view, Autodesk’s expanding product portfolio and broadening industry and geographic reach will help it sustain its longer-term growth strategy of providing high-volume, lower-cost CAD software. We believe this will likely drive earnings going forward.
Moreover, the acquisitions that are being made in the field of CAD and gaming middleware sections will provide the company with long-term opportunities, particularly in the web-based communities that will likely boost the company’s cloud offerings going forward.
However, foreign exchange fluctuations and increasing exposure in Europe and competition from Adobe Systems Inc. ADBE, Parametric Technology Corp. PMTC are the headwinds. Additionally, there is a risk of customer concentration as an estimated 30% of the Autodesk’s business comes from 1% of the customers.
We have a Neutral recommendation on Autodesk’s shares in the long term. Currently, Autodesk has a Zacks #4 Rank, which translates into a short-term (1-3 months) ‘Sell’ rating.
Sell Short Autodesk – Ticker ADSK
Sell Entry: 36.86 to 32.91
Take Profit Areas: 21.40 to 20.47, 14.42 to 13.73
Autodesk, Inc. provides design software and service solutions to customers in architecture, engineering, and construction; manufacturing; and digital media and entertainment industries. It operates in four segments: Platform Solutions and Emerging Business (PSEB); Architecture, Engineering, and Construction (AEC); Manufacturing (MFG); and Media and Entertainment (M&E). The PSEB segment offers AutoCAD, a computer-aided design application for professional design, drafting, detailing, and visualization; and AutoCAD LT, a software for professional drafting and detailing. The AEC segment provides Autodesk Revit products that collect information about a building project and allow this information to be coordinated across other representations of the project; AutoCAD Civil 3D, a surveying, design, analysis, and documentation solution for civil engineering; AutoCAD Architecture that built on the AutoCAD platform for architects; and AutoCAD Map 3D, which provides direct access to data needed for infrastructure planning, design, and management activities. The MFG segment offers Autodesk Inventor, which provides a set of tools for 3D mechanical design, simulation, analysis, tooling, visualization, and documentation to manufacturers; AutoCAD Mechanical, a software to accelerate the mechanical design process; and Autodesk Moldflow, an injection molding simulation software, as well as a range of services, including consulting, support, and training. The M&E segment provides Autodesk 3ds Max, which offers 3D modeling, animation, and rendering solutions for game developers, design visualization professionals, and visual effects artists; Autodesk Maya, a solution for film and video artists, game developers, and design visualization professionals; and creative finishing solutions. It licenses and sells its products and services directly, as well as through distributors and resellers worldwide. Autodesk, Inc. was founded in 1982 and is headquartered in San Rafael, California.
Click here to review different investing trading software that scans analyzes stocks for different technical fundamental criteria, and low-risk high-reward trade pattern setups.
Click the Autodesk stock chart below for a larger view.
Friday, November 18, 2011
Andy, a self-made millionaire trader, is offering to let you trade alongside him.
Learn everything about how he trades: his system, risk management, everything . . . coach you AND have his personal trading coach work with you for the next 90 days, risk-free.
If at any time during those 90 days you decide it’s not for you, then just say the word and you’re done. It doesn’t cost you a cent to try it.
Click here to get all the details on your 90-day trial.
It’s not often you get a chance to be coached by and trade alongside a self-made millionaire trader (who made his money trading, NOT collecting big salaries and fees like so many on Wall Street).
It’s also just as rare to get the chance to be coached by a turnaround trading coach who’s trained a self-made millionaire trader.
Today, you’re getting the opportunity to get both risk-free for 90 days.
Could you do what Andy did?
Could you turn $1,600 into $1.4 million in 5 months?
Or could you pay yourself $329,260 from your trading account and still have over $1 million to trade?
Mike Ser answered that question pretty honestly: He doesn’t know.
He (correctly) says:
“The reality is anyone who tells you they can guarantee you’ll make money, get rich or whatever by using their system is flat out lying to you.
A lot of people (like Andy) have gotten rich by following trends, but a lot of traders have also gone broke trading trends and just about every other trading strategy out there. We can help you but, ultimately, your failure or success ultimately rests in your own hands.”
I appreciate his honesty. We don’t get enough of that in the online trading community these days.
What I like even better is that they’ve set it up so you can actually try the service out for 90 days—a FULL THREE MONTHS—before making a final decision on whether it’s right for you.
Click here to see the details of the trial.
Thursday, November 17, 2011
No hotels, no jet lag. If you have a high-speed Internet connection, you can attend this intensive, 8-session online trading course.
You'll spend 8 interactive online sessions with EWI's top trading instructors, almost as if you were sitting side-by-side.
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 – this time over the Web!
In an intimate online classroom setting, Wayne and Jeffrey walk you through carefully selected lessons and hands-on exercises that will give you the understanding and confidence you need to begin applying these techniques in your own trading.
Your education goes at a steady yet relaxed pace, plus it continues even after you've completed the online coursework. Your trading mentors Wayne and Jeffrey are available to clarify a critical lesson or answer that forgotten question that popped up while doing your homework – or even weeks after you've completed the program.
Here's what you'll learn:
Elliott Wave Trading Fundamentals
Psychology of Trading and the Markets
Technical Tools that Complement Elliott
Developing a Trading Strategy
Determining Support and Resistance Levels
Entry and Exit Strategies
Placing and Adjusting Stops
Trend Reversals and Pattern Recognition
Click here to review and register for the How to Trade in a Fast-Moving Bear Market Online Webinar
Tuesday, November 15, 2011
AND be coached by the trader who taught him.
You know Andy Man went from having less than $1,600 in his account on April 29 of this year to becoming a millionaire trader five months later.
Well, today you’re invited to start a 90-day trial of Andy Man’s breakthrough new Part-Time Gold Trader service.
Click here for all the details.
If you take this 90-day trial today, you’ll also get Mike Ser’s Turnaround Trader Training and Coaching Program. This program is essentially how Mike taught Andy how to trade.
The Cool Part: Because of how they set up the trial, you can actually complete the ENTIRE training before the trial is over. PLUS you get to trade alongside Andy for three months—either on paper or live in the market, whichever you prefer.
On top of that, your trial includes three months of LIVE coaching webinars and Q&A sessions. Yes, all during your TRIAL PERIOD.
Mike and Andy want to give you a chance to really review everything in their service before making a final decision on whether it’s right for you.
You can click here to get all the details now.
The Downside: After the first 250 traders start their trial, the membership dues are going to go WAY up. If you’re interested, please check it out right now before you pay more for putting it off. Click here to review the program.
Monday, November 14, 2011
I don't have a buy or sell stock pick this week again. SP500 and the major indicies are hitting major resistance now. I see a trading range for stocks for awhile, then I see the September lows being tested again. Instead I have some important information below on a very possible deflationary depression coming. For now I recommend staying in cash, selling short depending on each stock by stock situation, and or trading the forex or commodities markets for some price moves this week.
Social psychology precipitates economic depressions.
Don't blame Martin Van Buren for America's first deflationary depression. Social mood rode higher in the saddle than did our 8th President, who only stood 5' 6".
Elected in 1836, by the time Van Buren assumed office in March 1837 a speculative bubble had burst and a banking crisis was at hand (sound familiar?) -- the national mood had turned south and the "Panic of 1837" followed. Van Buren was known as "The Little Magician," but he could not pull an economic recovery out of the hat. He met defeat seeking a second term.
America's first deflationary depression lasted until 1842. Van Buren blamed over-zealous business practices and a credit bubble (sound familiar 2x?). The panic precipitated bank failures; many speculators who bought land to capitalize on railroad expansion lost everything. The depression worsened as Van Buren continued Andrew Jackson's economic policies. Businesses failed and unemployment was widespread. There were even "food riots" in several cities.
Author's note: Because of substantial revenue inflows into the Treasury during the boom of the early 1830s, the United States government became debt free in 1835. Ironically, this was the very year the depression began. Stock prices fell sharply despite the federal government paying off all of its debt. Conventional wisdom would have us believe reducing the national debt, or paying it off entirely, would lift stock prices. It didn't happen in 1835, so there must be something else at work. That "something else" is social mood.
The 1837-1842 deflationary depression comprised Supercycle Wave II, the end of which saw the beginning of the biggest economic expansion in history -- Supercycle wave III! The 1929-1933 Great Depression still grabs more attention, but in fact the earlier Supercycle Wave II decline set the stage for the United States becoming the greatest economic and military power the world has ever known.
President Herbert Hoover held office during the 1929 Crash and onset of the Great Depression, a.k.a. Supercycle Wave IV. Yet no U.S. President has thus far been at the helm during a Grand Supercycle market decline. The last decline of that degree had its origin in the South Sea Bubble in 1720, when Great Britain's King George I was on the throne. The rampant speculation of the time spread beyond the financial class, such that porters and ladies' maids had enough money to buy their own carriages. Members of the clergy took part in the mania. Poof! Life savings were wiped out. England's Postmaster General committed suicide. Hundreds of members of Parliament lost money. As for the directors of the South Sea Company itself, they were forced to give up their property and arrested to boot.
Martin Van Buren led the nation during our country's first Supercycle depression -- as President he was powerless to stop it. Who will occupy the Oval Office when the next Grand Supercycle depression develops? This we believe: That individual will be powerless to prevent it. He or she will only be a President.
What is more powerful than a President of the United States? The answer is "social mood." How is this powerful force shaping the economy?
Discover the answer in the 90-page Free Report called the Deflation Survival Guide.
Now is the time to prepare for a deflationary depression. Start by reading the 90-page free eBook, Deflation Survival Guide, which includes Robert Prechter's most important analysis and forecasts regarding deflation. This guide will help you survive a major deflationary trend, and even equip you to prosper.
Click here to download your free eBook, the Deflation Survival Guide, now >>
Thursday, November 10, 2011
Andy is the full-time engineer I told you about the other day who trades gold & silver part-time.
On April 29th, he had less than $1,600 in his trading account – over the next 5 months he turned that into over $1.4 million.
The last video gave you an overview of how he trades. Today’s video gives you the nitty-gritty details behind his million-dollar trading method.
He even goes into his trading account and walks through, day by trading-day, how he did it.
Click here to get the “Million-Dollar” Method now.
In this video Mike Ser, Andy’s trading coach, lays out all the practical details you need to start trading Andy’s method.
Mike and Andy said their goal was to give you enough information to be able to trade this strategy just by using the info in this video.
I love the fact they’re so willing to share the details of their system with everyone.
Best of All: you DON’T need any special software or systems to implement this today. I’m a big fan of what these guys are doing.
I don’t want you to miss out on this so go get this Million-Dollar Method now.
Click here to get the “Million-Dollar” Method now.
Make sure you leave a comment on the video. Mike & Andy are giving away a big gift. If you don’t comment, you can’t win.
Click here to review more gold and precious metals resources.
Wednesday, November 09, 2011
The skill that I'm referring to is Journaling. Yes, Journaling.
And the best way to teach you how to Journal effectively is to give you some Real World Examples.. and I'm not just talking about one or two examples… How about 97 Real World Journaling Examples!
THE FACT IS: Journaling is YOUR WAY of being honest with your self… being ACCOUNTABLE to yourself for your trading actions and MIS-ACTIONS.
You see, until you are honest with yourself on where you are, RIGHT NOW, with two things… Your Trading Discipline and How Your Trading Plan is REALLY performing… you will not see the success in trading that you seek.
I want to put you on the right track, starting immediately, so that you don't have to waste another day dreaming of being a successful trader… and you can actually start living the dream.
In this FREE 106-Page Master Report "97 Real World Journaling Examples", you'll learn, SPECIFICALLY . . .
97 Real World Journaling Examples straight from the trading journals of real traders.
HOW journaling your trades and trade results IS DIFFERENT if you make 3 trades a day or 100 trades a day.
WHAT to Journal (some things are important to journal, and some just waste your time).
Should you Journal with a Paper and Pen or do it Electronically? You get examples of both!
How To Journal Your Emotions (This, my friend, winds up being the REAL KEY to your journaling success. Being honest with our emotions will be your quantum leap to solid trading discipline, leading to consistent trading success.) Examples ABOUND!
You'll Find A Journaling Technique that Rings True For You! (Journaling is individually unique to each trader and with 97 Real World Journaling Examples one or two will surely have you saying, "That fit's me to a tee!")
REMEMBER: In order to move forward with your trading success, you must accurately assess where you are RIGHT NOW (Be Accountable!), so you know exactly where and how to improve your results… and JOURNALING is your tool to do this!
Click here for the New Free Video: Part-Time Gold Trader Turns $1,657 into $1.4 Million by Wealth Insider Alliance
Tuesday, November 08, 2011
That’s how one famous trader described the market during one of his most profitable periods as a trader.
Andy, the engineer who turned $1,600 into $1.4 million in five months during 2011, says that statement perfectly describes his recent success.
(If you missed his story, click here to hear it and get the secret behind his success.)
He actually uses the same method, and found a sector with the same market conditions, the other trader was describing.
This is part of the three-legged combination of factors that are responsible for his million dollar profit.
In today’s video, you get that three-legged combination. You also get to see how other traders use it to turn tiny accounts into giant accounts.
A 19-year-old trader who borrowed $1,600 to start trading, and became a millionaire by the time he was 26.
A 52-year-old contractor who went from making $50,000 a year at his full-time job, to making millions from his $11,000 trading account, and a trader who started with about $5,000 and 12 years later ended up with $15 million using the same basic approach.
It’s a fascinating story. Click here to hear these inspiring trading stories.
It’s a great piece of market history. You have all these traders trading across different markets, at different times. They’re all using the same trading strategy.
They’re all in sectors with the same market conditions.
They all turn a tiny account into over a million dollars; in some cases, over ten million dollars.
I highly recommend you watch this free video.
I’m willing to bet that you will have at least one “aha!” moment when you watch this video.
Click here to watch it now.
It’ll help your trading even if it turns out that you don’t personally want to trade Andy’s strategy.
Can you guess what trading strategy Andy uses? I’ll even tell you what sector he
trades—gold and silver. What do you think is working like crazy in that market, and let him turn $1,600 into $1.4 million in five months?
Click here to review more gold and precious metals resources.
Monday, November 07, 2011
No new stock pick this week. Unless your a gambler on the buy long side with some short-term momentum price moves I suggest selling the SP500 stocks short again for now, or staying on the sidelines in cash, and or trading the forex market for some price moves. For the time being, I'm seeing the SP500 index topped out at 1285.09 heading lower to test 1099.23. Anything at or below 1099.23 I would be an avid buyer for a quick bounce back up to 1285.09 plus. After that, re-analyze the market to determine its primary trend direction again, which if I bet now would be down. Instead of I have some market analysis below to help you in your trading this week and next.
How to Trade This Headline Driven Stock Market
With all eyes on the unemployment report and Europe, the CME Group’s PR Department nearly created an all out panic with their announcement after the market close on Friday relating to futures maintenance margin. The original statement was vague and I was quite concerned until I checked out the CME Group’s web-page and the PR Department sent an update clarifying their position. At this point I think the crisis has been averted, but this is just another reminder that we live in “interesting times.”
Keep in mind that if the CME starts raising margin rates across the board for futures contracts in order to protect themselves stocks and commodities could collapse. Silver recently has is margin rates increased and silver since then dropped 25% in value. So imagine if they raised the rates for more commodities…
The current price action in the marketplace pales in comparison to the world’s geopolitical tensions and deteriorating social mood. In my trading career, I have never seen the price action in the indices react so violently to intraday headlines and rumors. Risk is high and the types of traders profiting from this market are day traders and very short term traders with trades lasting just a couple hours to 24 hours in length. Aggressive trading which small position sizes is all that can be done right now. This is not meant to be investment advice, but more as a function of the market environment in which we find ourselves currently trading within.
Right now it is hard to say where price action in the broader indices heads in the short-run. One headline out of Greece or Italy could dramatically alter economic history. In the intermediate term I remain neutral to bearish for a number of reasons. One indicator I follow is the bullish percent index on the S&P 500 which at this point is arguing for lower prices.
The chart below illustrates the S&P 500 Bullish Percent Index:
As can be seen above, the S&P 500 Bullish Percent Index is presently at an overbought status. When looking at the relative strength and full stochastics indicators one would argue that a pullback is warranted. Historically when the S&P 500 Bullish Percent Index is this overbought, a pullback ensues which ultimately sees the S&P 500 Index selloff. The more arduous task is trying to determine just how deep the pullback on the S&P 500 Index might be.
It is critical to point out that while I do believe a pullback is likely, I will not rule out a rally into the holiday season. Much of the near-term price action is going to be dictated by headlines coming out of Greece and the rest of Europe. In addition to Greece, Italy is also starting to see increased concern regarding an unsustainable fiscal condition. Depending on how the European Union handles the varying degrees of risk in the near term, we could see price action react violently in either direction.
With the market capable of moving in either direction, I wanted to point out some key price levels which should act as clues regarding potential future price action in the S&P 500. The two key support levels to monitor on the S&P 500 Index are the 1,240 and 1,220 price levels.
The daily chart of the S&P 500 Index below illustrates the price levels:
For bullish traders and investors the key price level to monitor is the recent highs on the S&P 500 around the 1,290 area. The weekly chart below demonstrates why this price level is critical and which overhead levels will offer additional resistance should the recent highs be taken out to the upside.
SP500 Weekly Chart Analysis:
While I am neutral in the intermediate to longer term presently, in the short run I have to lean slightly bearish simply because of the future headline risk and also because a major head and shoulders pattern has been carved out on the hourly chart of the S&P 500 Index. This type of chart pattern is synonymous with bearish price action.
The hourly chart of the S&P 500 Index is shown below:
Right now I remain slightly bearish, but should the head and shoulders pattern fail and/or we begin to see multiple positive reactions to news coming out of Europe a strong rally into the holiday season is likely. Unfortunately all we can do is monitor the key price levels and wait patiently for Mr. Market to tip his hand.
Until we see a breakout in either direction, we could see price action inhabit the 1,220 – 1,290 price range for several weeks before we get any more clarity of future direction. Until I see a breakout, I will remain relatively neutral with a slight short term bias to the downside based on price patterns in the shorter term time frames. This is a tough market to trade in, and I don’t want to get chopped around or do any heavy lifting. I’m going to focus my attention on high probability, low risk trade setups until directional biased trades make more sense.
In closing, I will leave you with the thoughtful muse of the late Texas Congresswoman Barbara Jordan,
“For all of its uncertainty, we cannot flee the future.”
Market Analysis and Thoughts By:
Chris Vermeulen – ETF Trading Videos & Trade Alerts
JW Jones – Options Trading videos & Options Alerts
Friday, November 04, 2011
The Dow Jones Index saw its largest single week loss since early 2009. This comes as it sold off sharply as the S&P 500 finished its biggest monthly advance in nearly 25 years. Traders aggressively sold US Dollar long positions against the Euro and other major counterparts. This move comes following the announcement of aggressive new aid for Greece and other troubled Euro Zone governments. Overall trends favor further USD declines. Still, it will be critical to watch major economic news this week and next.
The US Dollar continues to track movements in the Dow Jones with stunning accuracy, and we expect the Dollar to respond to major shifts in broader market sentiment. With a US Fed interest rate decision and a US Nonfarm Payrolls coming up today, volatility is guaranteed. We should expect strong US data to drive stocks higher but the US currency could actually decline.
Forecasts call for unchanged interest rates from the US Fed and a fairly tepid gain in October US Nonfarm Payrolls data. These weak and gloomy economic forecasts make it surprising to see such large advances in the US S&P 500. Right now, we believe that recent rallies in the Dow and simultaneous US Dollar tumbles are short-covering. What does this mean? Traders are covering previous DJIA short positions and closing US Dollar long positions. This is forcing stocks higher and the safe-haven Buck lower.
We only need to look at the recent rate of change in the equity markets for evidence of short covering. In normal bull market conditions, price will tend to trend higher while downside corrections are swift and sharp. Fear is a stronger emotion than greed. Price tends to fall much more rapidly than it rallies as traders are running for the exits in a panic. Yet we have most recently seen the opposite. Extreme rallies emphasize that market conditions are far from normal and traders holding short positions are liquidating in a hurry.
We look to the coming days with great interest.
This is because the first week of the month often sets the pace for the remainder of the trading period. It will be critical to watch whether the S&P 500 can post further explosive gains and continue its uptrend through the month of November.
We wait with much anticipation the first trading week for November. Recent trends suggest the Dollar may continue lower this month. However, key event risk could just as easily drive major price shifts the other way causing a major shift in direction.
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Thursday, November 03, 2011
It’s been several weeks since I’ve written about Gold and we have had a wild ride since the 1910-1920 highs in August. When gold was trading at that lofty price I forecasted a major correction was nearing. We were shorting gold from $1862- $910 prior to the huge $208 drop that took place over just a a few days. We covered our short at $1725 and then Gold rallied back to a double top at $1920 and then fell back to $1531.
That pullback to $1531 qualifies as a Fibonacci retracement of the 34 month rally from $681 to $1920, and would also qualify for a price low for a 4th major wave correction that I discussed in prior forecasts. My initial targets for the Gold pullback were $1480-$1520 if the $1650 area was violated. Most recently we have seen Gold run up to 1681 which is another Fibonacci resistance zone a few times and then back off to the low $1600’s.
With the recent push over $1681, we can now confirm the 4th wave is over at $1531 lows and that the 5th wave is likely in the very early stages, but beginning to build steam. I will say that we want to make sure the 1650-1680’s areas are defended by Gold on any pullbacks in order for this forecast to remain valid. During this 5th wave up, eventually we should see the $2380 ranges in Gold, but it will not take place overnight. In the next few months I am looking for Gold to attack the $1900 range, possibly even by year end, and then in 2012 attacking the $2000 plus ranges.
With all of the Macro events in Europe changing on an almost daily basis, the whipsaws in both the precious metals and equities markets are difficult to forecast and trade for most investors. However, Gold has been moving in defined Fibonacci and wave patterns for ten years now, and has about three years left in a 13 year bull cycle if I’m right.
Below is the updated weekly chart of Gold. You can see prior low’s as they related to oversold indicators, and where we just came off the 1531 lows and its Fibonacci pivot along with the oversold indicators below.
Look for Gold to attack 1775 first, then 1800, 1840, then 1900 in the coming 6-10 weeks or so.
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Wednesday, November 02, 2011
In a shocking turn of events, Greece has put the adoption of the bailout plan up for a public vote. The outcome of that vote 10 weeks from now is anything but certain. Until that clarity emerges, it will be hard for US stocks to advance beyond the highs made last week.
If the Greeks approve the deal, then we should see the positive momentum for stocks resume.
If the Greeks vote down the deal, then it may simply be to get a better deal squeezed out of the Eurozone partners. That may indeed happen, followed by upward movement in stocks.
If the Greeks vote down the deal AND no other deal emerges, then it will likely be a disorderly default with massive losses in European markets with waves of pain hitting our shores as well.
My guess is that we will be stuck in a trading range between the 50 day and 200 day moving average (S&P 1189 to 1274) until this is resolved. And during that time the market will probably overreact to every glimpse into how the Greek citizens will vote.
Best buckle up for a bumpy ride.
More Zacks Investment Research Articles to Put Greek Situation in Perspective
• Buying on Greece Going Rogue
• Greece Holds Euro Deal Hostage
• Euro Dilemma, In Depth
Other Featured Commentaries on Zacks
• The Techno-Fundamental Edge
• What's Your Stock's Price Target?
• Aggressive Growth Stock Picks-Nov. 1, 2011
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Tuesday, November 01, 2011
I’m sitting here with a mountain of technical analysis reports that are causing my desk to buckle this morning, all shouting “breakout”, “buy”, and “uptrend”. So I’m wondering, “is there a scenario out there where these might actually come to pass?”
At this point I thought it might be useful to engage in what Albert Einstein called “thought experiments” and come up with a New Theory of Everything. In any case, you have probably all figured out that I am a frustrated novelist. As my old friend and former mentor, Sherlock Holmes, used to say, “Eliminate the obvious, and consider all other possibilities.”
First, let’s see how we got here. It was obvious to me that the market was overdue for a huge short covering rally that would take the index up 20%-27% off the lows (see my early September piece “My Equity Scenario for the Rest of 2011”). That’s why I entitled my October 8 webinar “The Short Game is Over.”
That is exactly what we got. Corporate earnings came in much better than traders expected, triggering a huge rush by under-performing managers to bring in some decent numbers by year end. We hit my target of the 200 day moving average at 1,275, a gain of 19.7%, and saw the second best month in stock market history.
Enter black swan number one. Last week, the hedge fund community established heavy short positions expecting a complete breakdown of the European sovereign debt crisis talks. But the bar was set so low they could only succeed. Ten minutes before midnight, we received an unexpected news flash about a comprehensive three part deal that was clearly a major leap forward. The Dow futures immediately gapped up 200 points in the overnight market.
That delivered the massive short covering rally on huge volume that generated all the technical green lights now on my desk. Conventional active managers panicked and stampeded to address substantially underweight positions which they achieved only recently at the market bottom.
So what happens next? In a few weeks, the Supercommittee reaches its deadline for achieving comprehensive budget balancing targets. Guess what? The hedge fund community is setting up large short positions in the run up to that day, betting that intransigent Republicans will refuse to agree to any tax hikes whatsoever, automatically triggering huge, deflationary spending cuts. The bet is that a market crash is a guaranteed outcome, similar to the one that followed the debt ceiling debacle in July.
Enter black swan number two. A smiling and deeply tanned John Boehner appears in front of the cameras at ten minutes to midnight, announcing that “he went the extra mile” and “reached across the aisle” and resurrected the $4 trillion deal he almost reached with Obama last summer before the Tea Party stabbed him in the back. The Dow futures immediately gap up 200 points in the overnight market, and a monster rally ensues, taking the S&P 500 up to its 2011 high of 1,367 by year end.
We then go into January with a market that looks very toppy and expensive. Active managers and talking heads complain bitterly that this is all short covering not justified by the fundamentals. But hey, a dollar made a short covering market buys just as much Jack Daniels at the bar as one made from long only buying. Hedge fund managers bet the ranch that a new market crash is coming, taking it back down to the bottom of the range 300 points lower. Traders are salivating at the prospect of making a killing, and active managers hurriedly move to underweight positions again.
Enter black swan number three. The People’s Bank of China announces in a carefully worded statement that its campaign to end rampant real estate speculation has finally succeeded. Developers have been seen cutting prices on new apartments coming on the market as much as 25%. As a result, the risks to the Chinese economy are now to the downside, and the central bank immediately cuts interest rates by 0.5%.
The Dow futures immediately gap up 200 points in the overnight market as the mother of all short covering rallies explodes. Commodities, like copper, coal, platinum, and palladium go through the roof. BHP Billiton (BHP), Joy Global (JOYG), Freeport McMoRan (FCX), Union Pacific (UNP), and Caterpillar (CAT) go bid only. Oil soars. The S&P 500 touches a new all-time high at 1,565. A major hedge fund manager jumps off the top of the Empire State building and crashes into a taxi on 5th avenue driven by an immigrant Nigerian taxi driver. His pockets are fill with trade confirms showing gigantic short covering losses. There is a twisted grin on his face.
OK, the Nigerian taxi driver was a bit much. But I will tell you one thing for sure. This flock of black swans absolutely has not been discounted by the market, and has a much higher probability than the market’s many armchair strategists, pundits, and seers realize.
Personally, I put the odds of all this unfolding at one in three. If we do manage to claw our way up that high, we will be at the top of a 13 year range for the market. Then the greatest shorting opportunity of a generation will be on the table because the Great Crash of 2012-2013 will be just around the corner.
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