Friday, August 30, 2013

Investing Trading Software that's Right for You

What to Look for in Choosing Investing Software that's Right for Your Trading Style

Practice on a Free Demo Trial First Before Purchase

Most trading software comes with a free trial so you can demo it first before purchasing. If your a new investor trader practising trading the markets is a good learning experience. If you are a beginner, try practicing trading the markets first, and most importantly, do it as if you are trading your actual real money to simulate your real trading account, your real trading strategies, in real market conditions.

Customer Service and Technical Support

Any purchase of software should come with free customer service via email, instant messaging, support ticket system, and or phone access.

Real-Time and or End-of-Day Market Data

Along with the software you will need market price data to be inserted into it. Is your software provided with free or fee based data? If so, if its fee based how much are the charges for the data you need? How accurate is the data? If your software is not provided with data, what data providers and format can you use with your software?

Technical Fundamental Trading Strategies Indicators Systems

Theres many different types of profitable trading strategies, indicators, and systems based on technical and fundamental analysis. Most software has and deals with technical analysis of stock futures forex price charts. Some softwares have fundamental screeners built in to also analyze company valuation ratio metrics. Look for software that either has some technical strategies, indicators, systems that are built in and or come as an additional add-on or plug-in. More comprehensive software includes or is stand alone with a fundamental valuation screener.

Get Some Continuing Education and Training with the Software

Most but not all software providers provide free or fee based education and training for using their software, and basic to advanced investing trading education. Software product use training is a must to use it correctly, and basic advanced investing training is a big plus for your continuing education to master the financial markets.

Specific Things to Look for in Software Packages


Multiple price plot styles: OHLC, HLC, Line, Bar, Candlestick.

Plot hundreds of the most popular technical and fundamental indicators.

Create your own indicators.

High resolution and fast chart rendering.

Link your symbol and/or time frame to any other chart or watchList.

Tab, float or dock multiple charts within a workspace.

Save your own user defined chart templates with your indicator parameters and custom color settings.

Arithmetic, logarithmic, percent and fixed percent scaling.

A large drawing tool library including trendlines, Fibonnaci retracements extensions, regressions, shapes & lines and text.

Scan, sort and alerts that come directly from the indicators on your chart.


Scan, sort and alert from hundreds of pre-configured and automatically updated system lists and indexes, plus your own personal watchlists.

Show multiple data columns for technicals and fundamentals.

All data column values stream and update in real time.

Scan and sort technical fundamental data in real time.

Flag stocks to allow quick organizing of your own personal watchlists.

Create and save templates for quick access to your favorite charts and data.

Easy sorting of your watchlists to access the data you want the most.

Link the active symbol in a watchlist to any other chart in your workspace

Tab, float or dock multiple watchlists within your workspace.

Scanning Screening Sorting

Fast scanning screening and updates in real-time with your market data. Different types of software can take seconds to minutes to hours perform.

Use pre-defined scan screen conditions or create your own scans.

Choose from hundreds of available conditions or create your own.

View your scan screen conditions directly on a chart to see them correlate with your chart indicators.

Instantly sort and re-sort your watchlist and scan results with as few clicks as possible.


Price, trendline, indicator and condition alerts.

Always running, even if your computer isn't on.

Alert notification via the application or by email or by text message.

Set reminders to review specific symbols.

Notes, News and Chat 

Take and keep your own personal notes or share them with other software users.

Attach charts, watchlists, scans or entire workspaces to any note.

Review your personal notes for the active symbol, right at your fingertips.

View other users public notes for the active symbol.

Quickly find all the symbols with your own notes.

View the current and historical news on the active symbol.

View and filter in real-time social networking feeds of notes showing what other people are discussing and trading.

Discuss market strategy with other software users live and in real time with a chat function.

Market Data

Always up to date, streaming data feed either by data download or data updates.

US Common Stocks & Indexes, Exchange Traded Funds (ETFs), Mutual Funds

Other global common stocks & indexes for the markets you trade.

Forex currency pairs.

Connections to thrid party advisory alerts services.

Click the Links Below to Review Quality Investing Trading Technical Fundamental Software Packages

Track 'n Trade Futures Forex Stocks Software

Track 'n Trade Commodity Futures Forex Stocks Trading Software
Download Free Trial
 of Track 'n Trade Ultimate Trading Machine Software. Trade with the infamous Bulls 'n Bears Advantage Plug-in! You can also set up your own unique trading systems using the Autopilot for Track 'n Trade LIVE Futures or Forex.

Worden Brothers Telechart TC2000

Worden Brothers - Telechart, TC2000, and Mobile Trading Platforms
Stock Market Charting Data Research and Online Market Tools
Free Trial
TC2000 continues to be the Stocks & Commodities Magazine reader's choice year after year for two good reasons - ease of use and speed. No other charts are as easy or as fast to scan, sort, tweak and browse. Bundle that with the fantastic personal note system, daily expert chart lessons and notes from other TC2000 users and integrated Third Party Reasearch and you'll see why TC2000 is the ultimate in convenience when it comes to staying in control of your charts and data.

Finviz Elite

FINVIZ Stock Screener Elite

Finviz provides leading financial research data, analysis and visualization, and offers the fastest and the most advanced stock screener available online, interactive markets maps, innovative market analysis and institutional services. Traders, individual investors and financial institutions including Pimco, Goldman Sachs, and JP Morgan use Finviz Elite. Maybe you should too to be profitable. Trade with very low-risk and high-reward using market neutral statistical arbitrage trading strategies with Finviz stock correlation data.


Quantpedia Screener and The Encyclopedia of Quantitative Trading Strategies

Choose your trading strategy from simple to very complex. From short-term to long-term. Equities, bonds, commodities or FX. We extracted explicit trading rules in plain language along with performance and risk characteristics and descriptive classification information. You can screen categorized data, see transparent visualizations, and examine related strategies. Avail of free and premimum Quantpedia services.

InstaForex Metatrader

Instaforex Metatrader PC and Mobile Platforms
Forex - Gold Silver Copper Oil - Commodities - Futures - NYSE CFD's

Industry standard Metatrader platform. ECN & Standard Spread Accounts. ECN Spreads As Low as 0.10 Pips. 3 Pip Standard Account Trading Spreads. Trade Gold Silver Copper Oil and Agriculture Commodities Also. Forex Analytics Buy Sell Trade Signals. Metatrader Expert Advisors Auto-Trading & Free VPS Service. Mobile SmartPhone Metatrader Software Trading.


Thomson Reuters Metastock Pro

The MetaStock PowerTools: Power to the People. The PowerTools include the Explorer, the System Tester, and the Expert Adviser. They come standard in all versions of MetaStock, and are designed to help traders of all levels.

Nison Candle Scanner

Steve Nison's Candle Scanner Software

Reduce hours of tedious candle charting analysis to just minutes easily with one click. Save hours of precious time, and boost your trading profits with candlestick guru Steve Nison's Candle Scanner. All of the filtering and analysis that Nison Candle Scanner performs for you is done instantaneously over the Internet using proprietary filtering technology that alerts you to candlestick patterns in real-time. You can filter all daily or longer term markets (plus intraday for alerts), all the time, and have only those meeting pre-specified criteria instantly be called to your attention. What could be easier and more powerful!

Market Analyst

Market Analyst - Technical Analysis Charting Software
Download Free Trial
 You need your charting package to be flexible. You need software that is extensible - able to grow with your education. You need your data to be reliable. We understand, and that is why Market Analyst is the program you need for your technical analysis. Market Analyst contains many unique features not found in any other charting application in the world. If you would like to find out how Market Analyst can give you the edge in your trading then read on, or download a copy right now.

William Gann

Market Analyst Gann Trading Software

Technical Analysis Trading Software. Market Analyst has created a Trading Software that repeats many of Gann's techniques in a charting application that traders like you who are not mathematicians could still use the advanced techniques that Gann used to assist his trading. Over the last decade we have met with many of the greatest educators who use Gann techniques in their trading, learning from them how to apply these techniques in an advanced charting application.

Decision Bar Trading Software

DecisionBar Trading Software
DecisionBar Trading Software Zeros In On Perfect Trading Opportunities In Real Time, and removes The Deadly Guessing from Picking Winners! Free "3 Dangerous Trading Myths".
DecisionBar places historical trading signals on your chart exactly where they would have occurred in real time, so you can review them and optimize your trades for current market conditions. Support and resistance (supply and demand) change from minute to minute.

Ninja Trader

Ninja Trader Platform
Free Demo
 Ninja Trader the combined result of an industry leading trading platform powered by an institutional grade trading engine that is managed by an experienced team of network professionals. Solutions for self-directed traders, automated systems and API developers all in one package.

Nison Candle Scanner Trading Software
CandleStick Trading Software for NinjaTrader

Volcone Analyzer Options Trading Software

Volcone Analyzer Options Trading Software

This type of program is simply not available anywhere else, at any price. We hired a top financial programmer to create this software exclusively for us, based on secret proprietary algorithms. It's involves complex calculations, and enough number crunching to keep a team of mathematicians busy for weeks, but you're about to find out how to get your hands on this tremendous software, which will do all this for you in a matter of seconds.

Stock Signals Alerts

Live Trading Seminars

Stock Option Forex Futures Training Seminars Webinars Workshops
Click Here For The Complete 2013 Schedule

Professional investors traders teaching successful low-risk high-reward
trade strategies. Power profit secrets for stocks, options, forex, futures
investing trading success. Or avail of Home Study Courses and or
Trading Softwares available to improve your investment returns.

Monday, August 26, 2013

Investing in US Mortgage Profits

Click Here for a Free Trial of the "Profit Rockets" Stock Pick Service

As a result of excellent second quarter results, earnings estimates have been rising for Nationalstar Mortage Holdings (NSM), sending the stock back to Zacks Rank #1 (Strong Buy).

About the Company

Based in Lewisville, Texas, Nationstar is one of the leading residential mortgage services companies in the U.S., with a servicing portfolio of $312 billion. The company offers servicing, origination, and real estate services to financial institutions and consumers.

Excellent Results for the Second Quarter

On August 6, 2013, Nationstar reported its second quarter 2013 results. Pro-forma earnings for the quarter came in at of $1.50 per share substantially ahead of the Zacks Consensus Estimate of $0.97 per share.

Earnings were up in comparison to both the prior quarter pro forma earnings of $0.85 per share and Q2 2012 pro forma earnings of $0.44 per share.

Total revenues came in at $603.7 million, up 40% from the prior quarter and up 198% from the second quarter of 2012. Total originations during the quarter surged to $7.1 billion, up 109% from $3.4 billion in the first quarter.

Pro forma servicing portfolio stood at $435 billion and the bulk acquisition and flow pipelines grew to the $400 billion during the quarter.

Strong results for the reported quarter were primarily a result of higher volumes, lower original expenses and the company’s focus on high margin channels. During the quarter, Nationstar completed the acquisition of the mortgage origination business of Greenlight Financial Services for $75 million. The company expects Greenlight to originate more than $8 billion annually.

The management reaffirmed its guidance for FY 2013 at $4.05–$4.75 per share and for FY 2014 at $6.45–$7.50 per share.

Positive Earnings Estimates Revisions

As a result of excellent results, analysts have been revising their estimates for current quarter and the fiscal year 2013. Zacks consensus estimates for the current quarter and the current year have increased to $1.25 and $4.63 per share respectively, up from $1.23 and $4.39 per share, 30 days ago. The company has delivered positive surprises in each of the last four quarter—with an average surprise of 21.75%.

Solid Industry Outlook

Mortgage servicing industry stands to benefit from the improving economy and the healing job market. As the economy improves and rates rise, prepayments slow down extending the cash flow of servicing assets. NSM had acquired a large amount of mortgaged assets over the last 3 years at very low acquisition multiples. The company expects the value of these assets to appreciate as the economy improves.

Lower unemployment leads to a reduction in portfolio delinquencies, servicing costs and advance balances.

Further, a number of large financial institutions have recently announced that they intend to explore the sale of additional servicing assets. According to NSM’s management, this trend bodes well for Nationstar and will undoubtedly allow them to continue to grow their platform.

The Bottom Line

NSM is a Zacks Rank#1 (Strong Buy) stock. It also has a longer-term Zacks recommendation of “Outperform”. Further with an improving outlook for the mortgage servicing, this stock should be a solid pick for your portfolio.

Click Here to Review More Financial Intelligence

Friday, August 23, 2013

Professional Investing Trading Education

Finding quality professional trading education that fits your budget and helps you to be a successful and profitable investor and trader is not that easy with the many low quality unprofessional education programs being marketed online by people who are successful online marketers but unsuccessful investors and traders.

Being involved in the financial markets since 1989, I've reviewed and used so many investing trading education programs I can't count them all, and with most of them not worth the money being charged for them. After this much time and experience using and reviewing these programs, there are trading education programs from leading educators that I've use myself and recommend to anyone who wants to be a successful investor and trader in the long-term.

One thing I look for in a professional trading education program is who created it and are they themselves successful investors and traders in the long-term. There's no need to re-invent anything here. It idea is to copy successful investors and traders and apply that education and experience to our own trading style to be successful ourselves.

Being successful in the financial markets is all about managing risk. Manage risk correctly and you will be a successful investor trader, and the money will simply follow your success. Doing anything in life can be simple or complicated. It's your choice as to how simple or complicated you want your investing and trading to be. Why not try to keep things simple and keep your stress levels as low as possible?

The following investing trading education companies have trading education programs I highly recommend for beginner to advanced traders to increase their skills at being successful and profitable in the financial markets. These companies and the persons behind the creation of these trading education programs are successful investors and trader over the long-term in the own right, and anyone investing in their programs should be forever grateful for the knowledge and experience that has gone into creating these programs.

Dr. Van K. Tharp Ph.D International Institute of Trading Mastery

Van Tharp is one of the original famous traders in Jack D. Schwager's trading book "Market Wizards" which are interviews of the world most profitable traders. Van Tharp is also known as the "Traders Coach". Van Tharp's Home-Study trading education programs are the best available and he also conducts trading seminar workshops. If you want the finest trading education then Dr Van Tharp trading education programs are you best choice.

Robert Prechter of Elliottwave International

Robert Prechter has forecasted more successful major market calls than anyone else in the markets. He forecasted the 1987 stock market crash as well as many other major market moves. He provides trading education programs of home-study courses, online learning programs, and from time to time, investing trading seminars along with online webinars. If you want the finest Elliottwave Fibonacci trading the Robert Prechter trading education programs are your best choice.

Steve Nison of Candlecharts

Steve Nison is known as the father and expert in Candlestick charting investing trading. His Candlestick trading education programs are the finest available and from time to time he conducts live trading seminars along with online webinars too. If you want the finest Candlestick charting trading education then Steve Nison courses are your best choice.

These three men provide the finest highest quality for money paid trading education you can find on the planet in my opinion. Click the links above to review and or purchase their programs.

Click Here to Review More Successful and Profitable Financial Intelligence

Wednesday, August 21, 2013

Short Selling the Empire of China

Short Selling China by Dr Van Tharp International Institute of Trading Mastery

We could debate mightily about who has the toughest trading job on Wall Street but it would be tough to argue against short sale specialists having a spot near the top of that list.

Institutional short sellers are different from the other folks on the street who are picking names to buy. To understand just how tough it is to be a short seller in the money management world, I talked with a professional short seller.

After considering the challenges of institutional short selling, we’ll look at what one of the most famous short sellers of our era has to say about shorting opportunities related to China.

The Trials and Tribulations of Being a Short Seller

As a fascinating starting point, one might say that my partner, Christopher Castroviejo has short selling in his DNA. Christopher’s grandfather, Benjamin Smith, was the one of the largest short sellers (if not the largest) during the market crash that started in 1929. This earned him the nickname “Sell ‘Em” Ben Smith.

For seven years, Christopher ran “short only” money for some firms and high net worth individuals who are household names. He and his firm TC Management had some amazing short side scores including Clearly Canadian and Citibank.

I asked Christopher about the general differences between traders who short stocks for a living (like the hedge fund manager we’ll discuss below) and the much more common stock purchasing manager, Christopher had some interesting and useful insights.

Fighting the market’s long-term bias. Almost everyone knows that the U.S. equities markets have been in a long-term uptrend. So putting together a portfolio of stocks that will head down takes more work and patience than finding ones that will move up along with the market. It’s kind of like a salmon swimming upstream.

Short sellers are often in positions early and have to wait. Those on the short side (and their clients) often have to have seemingly infinite patience. No one at the company wants their stock price to go down, so the efforts to keep price up often delay the inevitable for many quarters or even years. Short selling is a mental stretch for clients. Most money management clients want smooth returns, and equity curves for short portfolios are usually anything but smooth! The waiting game I mentioned above can be tough for clients to endure.

Good short trades get crowded. When ideas start to work, “me too” traders start to pile on. With lots of short interest in a stock, short squeezes can become painful. A short squeeze happens when price rises enough that those short the stock have to start liquidating all or part of their position. Since exiting a short trade means buying the stock, this extra buying adds fuel to the up move.

The bottom line is that successful short sellers have to do more “on the ground” research and dig deeper into a company’s information to find ideas than those who are buyers. Channel checks (how much product or service volume is really flowing) require even more due diligence. Accounting reviews move from routine to full-out forensic exercises. Because of the extra due diligence, short sellers with good, long-term track records are rightfully held in high esteem.

A Short Seller with a Record of Success

Jim Chanos, founder of Kynikos Associates, is widely recognized as one of the best short sellers in the business. He was famously involved in uncovering the problems at Enron and WorldCom (he was, of course, short their stocks) and has had admirable performance over a very long short-selling career.

His latest idea for a slide is the weakness he sees in China. His research into the problems with China have led him to be a very outspoken short seller of venerable Caterpillar. He says that this short was already his most profitable play for 2013.

Chanos has made several public presentations about the problems with China and backed his position with lots research and data. Chanos’ analysis is noteworthy for all serious traders and investors because China has become such an important player in many areas of the global economy that any contraction in the Middle Kingdom would have worldwide ramifications.

Yeah, We Get It — China Is Important

Few people need convincing that China is a pivotal player in the world economy but to drive the point home, here are some great charts by Australia’s Treasury Department in 2011.

It isn’t necessary to dig into the details because the point is clear: China is the world’s leading consumer of construction commodities by far. Thanks to its rapid urbanization and growth goals, it has become the primary consumer of base metals like steel, aluminum and copper. They are also the world’s top user (and producer) of coal. The list could go on and on — but we get the picture: China’s growth and consumption have been huge drivers for the global economy. If that growth sputters, reverberations will be felt just about everywhere.

Why Chanos Doesn’t Like China

When a smart guy with a track record like Chanos repeatedly sounds the alarm, on a lynchpin to global economic health, it’s at least worth a listen. To keep this piece from getting even longer, though, let’s look at some of the key concerns on China in bulleted fashion:

China’s GDP numbers are suspect. This isn’t the first time you’ve heard this (gaps from regional numbers vs. national numbers, etc.), but even with number fudging, the slide in GDP persists:

China continues its overinvestment. Chanos lists some numbers like 12% too much cement capacity, 10% on steel and 18% on autos — and these are compounded annual growth rates for the past 5 years! This bleeds over into a fixed asset investment boom that’s hard to fathom… The chart below shows Fixed Capital Formation as a Percent of Gross Domestic Product.

Compare’s China’s fixed asset investment rate of 45% to the U.S. at 15%, Japan at 21%, and even high growth Brazil which is only at 21%. We’ve all heard of empty cities and huge shopping malls in China with less than 10% occupancy. And the economic accounting for the drag these projects put on the economy? About as reliable as their GDP numbers.

All this tastily funded by a credit boom. When China tried to start some banking reforms recently, the stories of undercapitalized banks made front and center headlines which precipitated a 10% stock market plunge in two days.

China’s real estate bubble is in full swing. The affordability index for big city housing is off the charts! Check out this living expense comparison for several Chinese cities and notoriously pricey London and NYC:

Wages are rising, putting stress on margins and manufacturing costs. This trend is pushing some manufactures to “offshore” work from China to cheaper labor markets. According to the official People’s Republic of China government website (, private sector manufacturing pay rose 16% in 2010 and 11% in 2011. Minimum wages are also scheduled to rise 13% through 2015.

To be honest, this is only the tip of the iceberg of Chanos’ China thesis. The Chinese peoples’ lack of faith in government to control graft and wealth hoarding signal additional warnings.

Cut to The Chase - What Investors and Traders Should Do

You may not have the deep pockets and infinite patience of Jim Chanos to be able to short China-dependent stocks, but you can use China as one of your early warning “canaries in the coal mine”.

Every investor and trader should add the announcement of China’s GDP numbers to their “data to watch” list. The next one will be in mid-October. In addition, realize that China related stocks, like base metal miners and most commodity related plays, should be kept on a short leash.

Because China is a command economy, the central government has many levers that it can still pull to delay a slowdown (and to adjust the numbers so that the slowdown looks less apparent). But a lot of smart money is betting on just such a slowdown. As individuals, we’d do well to err on the side of caution as well.

Click Here to Review More Profitable Financial Intelligence

Tuesday, August 20, 2013

Hedge Fund Trader Shows You How to Make 12% a Month

For the past 7 years Dr. Adrian Manz has used a unique income investing approach and has beaten the S&P 500 26-to-1.

Since 2006, it has averaged 143.97% per year, versus the S&P's 5.5%.

That's enough to pay you an average of $14,397 profit for every $10,000 in your portfolio . . . every year for the last seven years.

Even more remarkable is how it performed during the crash of 2008. That year's return: 233.32%.

Click here to see and get this strategy.

This is not theory. Dr. Adrian Manz is a hedge fund trader who has used this income strategy to make enough money to buy three houses (including a California beach house). It's how he supports and provides a globetrotting lifestyle for his family.

He shares this unique income strategy in this breakthrough new presentation.

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Monday, August 19, 2013

Investing in Oil Gas Distribution

Click Here for a Free Trial of the "Profit Rockets" Stock Picks Service

Magellan Midstream Partners (MMP), Zacks Investment Research Rank #1 (Strong Buy), is a publically traded partnership which stores, transports, and distributes petroleum products. This stock is worth exploring given the political chaos in the Middle East, the hunt for yield in the face of rising treasury yields, and the North American energy boom. Further, Magellan is showing strong upward earnings revisions momentum.

A hedge against geopolitical factors:

The social unrest in Egypt and Syria has the chance of spilling into the broader Middle East and supporting a risk premium in the crude oil market. Investing in an energy based asset may help to insult your portfolio against geopolitical risk and higher energy prices. Moreover, the events in the Middle East put a spotlight on the importance of North American energy production and transport. Strong and growing U.S. energy activity is a national security issue.

A healthy and growing payout:

Magellan has a deep history of distribution growth with 44 quarterly increases and a compounded annual growth rate in distribution of 12% between 2001 and Q1 2013. At the same time, it has an attractive distribution yield just below 4.0%. The company recently raised its fiscal year 2013 distributable cash flow by $50 mln to $630 mln.

Magellan’s yield is comfortably above the 10 year treasury yield of about 2.80% and is yielding similar to the Investment Grade iShares Corporate Bond ETF (LQD). A rising payout should help cushion the impact of higher rates on your portfolio.

At a recent conference, the company highlighted that fee based and low risk activities accounted for 85% or more of its operating margin. S&P recently raised Magellan’s credit rating to BBB+ from BBB hinting that credit quality is improving. The company is expected to have a distribution coverage ratio greater than one for the foreseeable future.

A way to capture rising U.S. oil production:

U.S. oil production remains vibrant, and is expected to continuing growing. U.S. production rose 20.5% year over year in the 4-weeks ending August 9th. Production is approximately 7.5 mbd, and the U.S. Energy Information Agency has said U.S. oil production could reach 10 mbd by 2030. There will be plenty of need for transport and storage facilities. The company has been playing up the start of its Longhorn pipeline and its Double Eagle joint venture.

The latest 10-K indicated that Magellan operated 9,600 miles of pipelines through 14 states in the midcontinent region. This enables it to exploit production in North Dakota, Colorado, and Texas. It is offering investors a way to profit from the Permian Basin and Eagle Ford energy formations.

Earnings estimates are rising:

Over the last 30 days, the 2013 Zacks Consensus Earnings per Share Estimate has risen 10% to $2.49, while the 2014 Zacks Consensus Earnings per Share Estimate has increased 5.5% to $2.66. In the past 30 days, estimates have been raised nine times for 2013 and ten times for 2014. There have been no estimate reductions.


Magellan is worth exploring given its strong growth in earnings, healthy payout, and operation in a business with supportive macro fundamentals. You don’t have to travel the earth to find a good investment prospect with Magellan.

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Friday, August 16, 2013

Three Upcoming Currency Trading Opportunities

Some major currency pairs are offering excellent trading & investment opportunities in the weeks and months to come according to Van Tharp International Institute of Trading Mastery. Why? As Van always points out in his monthly market updates:

“Crisis always implies opportunity. Those with good trading skills can make money in this market—a lot of money. There were lots of good opportunities in 2012, and many more to come in 2013.”

I agree! It’s almost like he is talking about the Forex markets right now. The central banks are in crisis mode and their competitive, easy-money policies mean we’ll continue to see powerful currency movements as we have had recently. This currency crisis/opportunity will benefit short- & medium-term traders in particular.

As a swing and day-trader, I analyze higher timeframe charts to help guide me to opportunities in my preferred timeframe. Based on the higher timeframe charts, I’ll share three currency pairs where I believe “the music is going to play” in the coming weeks and months: USDCHF, USDJPY and Gold.

Gold, you might ask? Is Gold really a currency? Yes, I believe so. It is an age-old currency that was replaced a couple hundred years ago by paper money that, indeed, allows for easier transactions. From a trading perspective, I find that Gold prices and currency prices behave exactly the same and I apply my same Forex trading systems to Gold for very similar results.

After Its Big Move Up, Where is USDJPY Heading?

As a direct consequence of “Abenomics” (the popular label applied to Prime Minister Shinzo Abe’s aggressive monetary easing policy to boost Japan's competitiveness) we saw a strong momentum move long USDJPY which lasted more than 9 months in a row and offered multiple short- & medium-term trade opportunities. Here’s the monthly bar chart for USDJPY:

The main question now is: was that it or are we going to see even further upward momentum? Well, it depends. Let’s get into more detail by moving to the weekly bar chart below. Late last year, the Yen devaluation took off and we saw four higher pushes up with the last push cutting through the Big Number of 100.00. The USDJPY was obviously in a very strong trend, but then, experienced a rapid, relatively weak 4-week pull-back where the 8-month moving average acted as first support (see black line in the monthly chart above).

With momentum this strong, it is not unusual for the trend to continue even further after a shallow pullback. Since it is more likely that a trend will continue rather than reverse, we should expect a continuation of the devaluation. At the moment, however, prices are in “no-man’s land” between the last lower high (green line) and the recent lower low (red line). To mitigate risk before considering a long position, a price move above first the big number 100.00, and then 101.52 would be necessary. Then, a continuation in length & strength of the prior move should be expected. A deeper pullback becomes more likely in the case that prices show further weakness and break below 93.74.

The potential target for the long move is 120.00 and 85.25 for the short move (see price target areas marked with small grey rectangles on the right in the chart).

What Happened to the Once Great Trading Pair USDCHF?

The USDCHF was once my preferred candidate for short trades, but for about 2 years now, nothing much has happened on the short side. Where do we stand?

Overall, the pair is still in a clear down trend on a long-term basis (see the monthly chart below). In the strong, mid 2011 down-spike, prices overextended from the 8 & 21 period MAs (black & blue line). Prices needed some time to “rest” to allow the moving averages to “catch up”. The MAs have caught up now and one can clearly see that they are all nicely lined up in correct order (8<21<50<200) — a sign of a prevailing strong trend in the monthly chart below. The down trend is far from being over.

The weekly chart below provides in better detail a nice rounded pattern with once higher highs turning (for about 2 months) into lower highs. The prices were not strong enough to cross above the Big Number of 1.0000 and have formed lower highs since then.

I see this upward correction coming to an end soon. If USDCHF breaks lower than 0.9000, it would provide confirmation for the resumption of the down trend. This could take a couple of weeks, but if it does, the prior strong down move would continue to an expected level below 0.7000 (marked with the gray box on the right of the chart). Multiple trade opportunities will offer themselves to traders who are prepared with good swing systems on the way down to 0.7000. That’s a distance of more than 2000 pips with barely any support levels in the way.

Gold — Where Do We Stand?

For about 2 years now, Gold has been in an intermediate down trend from its 2011 high of 1950USD. Gold’s high occurred after an unprecedented 12-year uptrend with relatively minor corrections. Since May of last year, Gold increased its downward acceleration, breaking through the weekly 200MA which had previously acted as strong support (see the weekly chart below).

You might ask: can gold go lower after all the money printing and chaos in the financial world in the last two years? A look at the market technicals help answer that question — of course. All of Gold’s MAs line up in correct order pointing to a strong down trend. For 5 weeks now, prices have come back to just join the MAs — a very healthy development for a continuing downtrend. Is this enough of a pullback to resume the downtrend? Let’s have a look at the market dynamics of a lower timeframe.

The daily chart above shows a nice green rejection candle on August 1 (red circle), which indicated a continuation of an intermediate long correction move. However, a test of this candle low has proven to hold (after having made a quick new low) which was followed by a decisive up move clearing prior resistance. Now again we have two lines: the break of the green line indicating further upward correction towards 1400USD (within a still prevailing downtrend), or, the break of the red line pointing towards a resumption of the 2-year downtrend towards 1200USD and lower.

Trading the Current Forex Markets

Given the discussion, was it possible to make money swing trading in this recent turbulent environment? Yes — Gold was my most profitable swing trading currency during the last two months with three very good trades. My system had me enter short first on a daily bar setup and then enter short twice on 4h bar setups. All three trades (see the chart above, red arrow for short entry, green arrows for long entries) were based on the Busted Breakout system, which is one of the three systems I will teach at the Forex workshop in Berlin this September.

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Monday, August 12, 2013

Investing in Residential Home Construction

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Housing stocks have fallen from their recent highs report Zacks Investment Research. Yet builders like Hovnanian Enterprises, Inc. (HOV - Snapshot Report) are still expected to generate double digit earnings growth this year and in 2014. Is this stock weakness a buying opportunity?

Hovnanian and its brands, which include Brighton Homes, Parkwood Builders, Town & Country Homes and Oster Homes, is one of the most recognizable homebuilders in the United States. Founded in 1959, it has operations in 16 states, including the hot housing markets of California, Florida, Illinois, Arizona and Virginia, and the District of Columbia.

Big Beat in the Second Quarter

Hovnanian reports earnings outside of the normal earnings cycle. It reported second quarter earnings results all the way back on June 5. But it was a sign of things to come with the rest of the homebuilders as it easily beat the Zacks Consensus by 120%.

The company made a penny, beating the Zacks Consensus by 6 cents. The Zacks Consensus was looking for a loss of 5 cents.

Revenue was up 23.8% to $423 million. For the first six months of fiscal 2013, revenue rose 27.8% to $781.2 million.

Hovnanian was able to raise home prices in the quarter throughout the country to offset increases in labor or material costs. Homebuilding gross margin percentage increased 150 basis points to 18.9% from 17.4% in the second quarter of fiscal 2012.

Backlog also rose 23% to 2,827 homes compared to Apr 30, 2012.

The Turnaround is Here

The turnaround in earnings tells the story of the housing recovery.

Fiscal 2012: -$0.54

Fiscal 2013 Expected: $0.18

Fiscal 2014 Expected: $0.50

Fiscal 2013 is expected to be the first profitable year since 2006.

Shares are Down Double Digits from the 52-Week High

While shares rallied big into the end of 2012 as the housing recovery picked up steam, they've yet to reclaim the high hit on Jan 2, 2013 of $7.43.

Instead, shares have fallen about 29% from that high.

While Hovnanian is trading with a forward P/E of 29, investors aren't looking for value but are buying the expected 170% earnings growth this year and another 184% growth in fiscal 2014.

The summer housing market has been strong. We'll see just how strong on Sep 5, when Hovnanian is expected to report fiscal third quarter results.

The housing stocks seem to have lost their shine in recent weeks, but the fundamentals are still solid. Investors might want to keep this Zacks Rank #1 (Strong Buy) on their housing investment short list.

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Friday, August 02, 2013

Key Financial Market Trend Change Calls

A Record of Spotting Major Market Turns Most Investors Miss by Elliott Wave International

Elliott Wave International is dedicated to helping subscribers anticipate the next major market turn. No, we don't always "get it right" - yet the examples below speak for themselves.

1. In 2005, EWI called the 2006 real estate turn.

Some say real estate can't go down because far too many people are concerned about a real estate bubble, a worry that is now even greater than it was for stocks at the March 2000 NASDAQ peak ... it is actually another sign of a top when participants are dismissive of the warnings. The Elliott Wave Financial Forecast, July 2005. House prices peaked in July 2006. By April 2012, the Associated Press reported, "Home prices have fallen 35% since the housing bust."

2. In 2007, EWI called the stock market turn.

Aggressive speculators should return to a fully leveraged short position now. We may be early by a couple of weeks, but the market has traced out the minimum expected rise, and that's enough to act upon. The Elliott Wave Theorist, Interim Report, July 17, 2007. Those aggressive speculators were rewarded. From an Oct. 9, 2007, high of 14,164, the Dow Industrials tumbled to 6,547 by March 9, 2009.

3. In 2008, EWI called the crude oil turn.

Less than six weeks before the $147 high in the price of oil, the June 2008 Financial Forecast observed that "The case for an end in oil's rise is growing even stronger." The chart below was published in that issue:

Note that the sentiment index on the chart shows bullish sentiment reaching 90%. By December 2008, the price of oil had declined 80%.

4. In 2011, EWI called the retracement high in the CRB Index.

The CRB index has reached the upper end of its corrective-wave trend channel while simultaneously reaching a Fibonacci 50% (1/2) retracement of the 2008-2009 decline, as it completes an A-B-C rally. This index should soon begin another wave down that takes it below the 2009 low. The Elliott Wave Theorist, January 2011. The CRB index topped less than four months later.

5. In 2012, EWI called the turn in gas prices.

The rush to extrapolate [rising prices] is all we need to conclude that the odds of ... gasoline prices going to the moon are extremely low. The Elliott Wave Theorist, April 2012. Gasoline prices topped during the same month that issue published.

6. In 2009, EWI called the turn in stocks.

The majority of investors thought that the period from October 10 to year-end 2008 was a major market bottom. But over the past four months The Elliott Wave Theorist, The Elliott Wave Financial Forecast and the Short Term Update have repeatedly stated, without equivocation, that the market required a fifth wave down. There were no alternate counts. The Wave Principle virtually guaranteed lower lows, and now we have them. I recommend covering our short position at today's close. The Elliott Wave Theorist, Special Investment Issue, Feb. 23, 2009. The Dow Industrials hit a major low just 10 days later!

7. In 2012, EWI called the trend change in bond yields.

Investors' waxing fears will cause them to start selling bonds, which will lead to lower bond prices and higher yields. If rates do begin to rise as we expect, most observers will probably be fooled. The Elliott Wave Theorist and Financial Forecast, Special Report, June 2012. On July 5, 10-year bond yields climbed to 2.72%, its highest level since July 2011.

In each of these forecasts, the consensus opinion was on the opposite side. Most investors never saw these major trend changes coming. Again, we're not perfect -- no forecasting service is.

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