Useful Tools (77)

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Are Investors Getting Too Bulled Up?

Ran across this post and found it interesting although anything that's only been around 7-1/2 years is truly untested but only time will tell.  All eyes are on Congress for a break in taxes for the wealthy, as well as 'stumbles' from our leader and chief, Mr. Trump.  Between the Russia investigation and foreign relations (yikes!) the tension is building, or at least being applied by the left.  Will they reach the proportions where firms hit the 'sell' button? I have to say that September is coming -  the worst month for the market thanks to Mutual Fund profit taking at end of fiscal year.  Anything is possible.  Enjoy the ride.  From LyonsShare:

Sentiment indicators can be useful tools for investors, mainly on a contrarian basis. That is, generally when readings get overly bullish, it may signal a lack of remaining buyers in the market and vulnerability to a decline in prices. Conversely, when sentiment is extremely bearish, it is often a sign that selling has been overdone and prices

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Admin

It’s hard to predict when a stock market crash will occur, so the best defense is to be prepared.

Today’s infographic comes to us from StocksToTrade.com, and it explains what happens when a large enough drop in the market triggers a “circuit breaker”, or a temporary halt in trading.

What Happens To Trading in a Market Crash?

These temporary halts in trading, or “circuit breakers”, are measures approved by the SEC to calm down markets in the event of extreme volatility. The rules apply to NYSE, Nasdaq, and OTC markets, and were put in place following the events of Black Monday in 1987.

Circuit Breaker Rules

Previously, the Dow Jones Industrial Average (DJIA) was the bellwether for such market interventions.

However, the most recent rules apply to the whole market when a precipitous drop in the S&P 500 occurs:

  Before Feb 2013 After Feb 2013
Index Tracked DJIA S&P 500
Level 1 Threshold -10% -7%
Level 2 Threshold -20% -13%
Level 3 Threshold -30% -20%

Upon reaching each of the two first thresholds, a 15-minute ha

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Admin

Predicting The Feds Interest Rate Forecast

janet-yellen-congress-2016.jpg?width=480This is one of the stranger things we've seen recently.

The research team at the San Francisco Fed earlier this week published a letter analyzing one startup's analysis of Fed communications.

Economist Fernanda Nechio and researcher Rebecca Regan looked at data from Prattle, a textual analysis specialist, as part of an examination of the Fed's communication strategy following the financial crisis.

The short of it is that Prattle was accurately able to predict what the Fed's infamous "dot plot" would look like upon its next release.

Since 2012, the Fed has released a Summary of Economic Projections (SEP) — which contains economic projections from meeting participants — after every other Federal Open Market Committee meeting. The SEP also includes the dot plot, which is an aggregated forecast of where Fed officials see interest rates at various points in the future.

Prattle's findings show that Fed communications ahead of SEP releases can indicate where the Fed's median expectation for i

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Admin

Chart Palooza

I'm continually saving charts and data points which I find interesting but generally don't post enough to share the data.  That being said, I thought "wth" and decided to share some of my most recent.  Perhaps you can find a few of interest or maybe you can translate one into a trade.  It certainly can't hurt.  Your comments would be of interest and will be answered.  Happy trading.

Online shoppers by income group.  It certainly seems Amazon benefits by middle income buyers.  Possibly they just don't have the 'time' to shop in a store, working 60+ hours a week and balancing soccer games, football, cheerleading practice, dinner, laundry, etc.

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Jet[dot]com is now selling some items at a loss to gain marketshare from Amazon

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We've had numerous talks in Chat over coal usage (is clean coal an oxymoron or what?) and this certainly backs up the belief that natural gas continues to be embraced.

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Then we have a look at Bear markets of 20% or more.The average # of months caught my eye. 

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Admin

Diamond Top In Small Caps

1291153?profile=RESIZE_1024x1024As discussed yesterday in Chat, small caps appear to be forming a diamond which can represent a "top" or merely taking a rest or consolidation before resuming it's trek higher.

Theory is to trade the direction of the break higher or lower.  IWM would work for a bullish breakout and TWM for a bearish break down for those who are unable to short.

fwiw we recently traded TWM on market weakness.  Looks as though it may be setting up again.

For more information on diamonds, I would suggest you browse through Thomas Bulkowski's pages at ThePatternSite.

For a technical analysis trader or investor, you need to be able to properly identify stock patterns his book Encyclopedia of Stock Patterns is a must have.

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Admin

Ribbon Study And $SPX Expansion

A Ribbon Study consists of 8 or more Simple Moving Average plots having different lengths thus forming a "ribbon". The lengths of those averages are in an arithmetic progression relation: the increment of the progression is defined by the initial and the final Moving Average lengths.

The way I view a moving average, especially a large one, is that is the average price of stockholders who have held since "that" point in time.  So if you're looking at a 50d, it's the average price of shareholders who purchased in the last 50 days.  If it's a MONTHLY moving average............NOW you're talking funds who have skin in the game and HAVE had skin in the game for months or years.  I want to be one of them if I'm a long/hold investor.  I want to "buy" when they buy.

I've always felt, that from a long/holding investing point of view, this study can also be an interesting way to view a coming expansion, after a long market consolidation.  View these historical charts and give me your view.  Ex

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Admin

460x.jpgWith the recent news that a Russian hacker ring has amassed some 1.2 billion username and password combinations, it's a good time to review ways to protect yourself online.

The hacking misdeeds were described in a New York Times story based on the findings of Hold Security, a Milwaukee firm that has a history of uncovering online security breaches.

Hold Security told the Times that the data was pilfered from some 420,000 websites and is "the largest known collection of stolen Internet credentials." Hold's researchers did not identify the origins of the data or name the victim websites, citing nondisclosure agreements. The company also said it didn't want to name companies whose websites are still vulnerable to hacking, according to the Times report.

If there's reason to believe your information might have been compromised, change your passwords immediately.

One of the best things you can do is to make sure your new passwords are strong. Here are seven ways to fortify them:

  • —Make your

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Admin

4th Of July Week

1290739?profile=originalWith the holiday up us, I see volume drying up which overall is bullish (no heavy volume selling).  Non-farm payrolls are the main focus however I expect any surprise to find buyers (algos) on any dip. There seems no marco headline news to alter this at this juncture.

We will be taking a brief holiday to return on the 7th however check in for our Charts section as you never know what will be uploaded during this down time. 

We haven't had a double digit correction in 33 months.  How much longer can it last is anyone's guess.  I remain bullish but cautious.

Stock up your coolers, your propane tank or charcoal and enjoy the long weekend.

U.S. markets will close early Thursday and remain closed on Friday the 4th.  Enjoy!

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Admin

Where The Jobs Are 5 Years Into The Recovery

Five years since the end of the Great Recession, the economy has finally regained the nine million jobs it lost. But not all industries recovered equally.  This awesome interactive from the NYTimes demonstrates what's moving and what is not along with over 200 charts drilling it down in simple terms.  Tell your high school and college attendees.  Are they in these growth areas?   Click chart to make the jump to the interactive.

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Admin

50 Stocks Most Loved By Hedge Funds


Google Inc.
$178
58
6%
-6%
Apple Inc.
$533
51
8%
8%
General Motors
$54
45
6%
-16%
American Intl Group
$77
43
7%
3%
Time Warner Cable
$38
42
8%
1%
American Airlines Group
$25
40
7%
53%
Citigroup Inc.
$141
37
6%
-11%
Microsoft Corp.
$331
37
6%
8%
Hertz Global Holdings
$13
33
6%
-1%
Micron Technology
$28
32
6%
20%
Facebook Inc.
$148
30
6%
6%
Cheniere Energy
$14
28
8%
34%
Actavis
$36
27
5%
24%
Forest Laboratories
$25
26
7%
55%
Delta Air Lines
$32
25
7%
38%
NorthStar Realty Finance
$5
25
7%
21%
Bank of America
$153
24
7%
-7%
Charter Communications
$15
24
6%
1%
Liberty Global Class C

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Admin

Your hear the reassuring echos all of the time.  "Don't worry! The market will always come back."  But do they?  What about dividend reinvesting and adjusted for inflation?  Given the data, one can easily see why smart money continues to invest in bonds, annuities, universal life, etc.  Merely my .02 cents but remember, charts don't lie - people do.

Consider these two overlays — one with the nominal price, excluding dividends, and the other with the price adjusted for inflation based on the Consumer Price Index for Urban Consumers (which I usually just refer to as the CPI). The charts below have been updated through today's close.

The Big Three
The Big Three

The 'Real' Big Three
The 'Real' Big Three
Price Change
Price Change


The charts require little explanation. So far the 21st Century has not been especially kind to equity investors. Yes, markets usually do bounce back, but often in time frames that defy optimistic expectations.

The charts above are based on price only. But what about dividends? Would the inclusion of div

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Admin

Bono joining the board of Fender and rumors that Dr. Dre will join the board at $AAPL. What do academics say about share prices and out performance when celebs take a seat at the board room table?  Increased exposure, higher consumer interest, improved sales.........or just a temporary blip on the chart?

Imagine the fight over Steven McQueen if he were alive today.  Ever car manufacturer, including TSLA, would go wild. 

Courtesy of FT

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Admin

th?&id=HN.608023376202893503&w=300&h=300&c=0&pid=1.9&rs=0&p=0David Einhorn’s Comments at the Greenlight Re (GLRE) Investor Day on May 20th 2014

  • Bernanke was predictable, but the new chairwoman is less predictable.
  • It has been 5 yrs into the recovery. Corporate profits have increased a lot and continue to grow. Current earnings expectations are high at a double-digit growth rate. Q1 numbers are showing the economy growing at  ~1%.
  • The fund is fully invested at 114% long and 66% short. It has increased its net long book from 35 to 50%.
  • Largest longs are Alpha Bank, Apple, gold, Marvel, Micron, and Oil States International.
  • Longs are cash-rich tech companies and businesses benefiting from structural changes. Shorts include secular decliners, momentum stocks, and iron ore related companies. Macro overlay due to monetary policy and unresolved imbalances.
  • Divergence between stock and bond markets?  Bond market is saying that economy is slowing down and yields have come down. Yields are not down because of deflation – we are not in deflation as commo

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Admin

i7lYQc0cAlQU.jpg?width=415When stock and bond markets took a dive in late January, hedge-fund manager David Ford kept his cool.

Ford watched emerging markets melt down and read warnings that the U.S. economy could crater too. As prices dropped, he overcame the impulse to flee with the rest of the herd and, instead, bought more corporate bonds, Bloomberg Pursuits will report in its Summer 2014 issue.

After two decades as a trader, Ford credits his serenity to experience -- and to the 20 minutes he spends in his pajamas each morning repeating a meaningless mantra bestowed on him by a teacher of Transcendental Meditation two years ago.

“I react to volatile markets much more calmly now,” Ford, 48, says. “I have more patience.”

He also has more money. Latigo Partners LP, his event-driven credit fund, climbed 24 percent last year. He almost beat the surging stock market with a bond fund. Ford is part of a growing number of Wall Street traders, including A-list hedge-fund managers Ray Dalio, Paul Tudor Jones and Micha

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Admin

NFLX To Face More Competition

In the area of streaming video and television, Mode Media (previously Glam) had quietly filed for IPO in 2013 and postponed it's IPO indefinitely in 2011.  I'm sure board member Mark Andreessen would love to push it forward but is this the right time with markets at all time new highs? 

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Glam Media changed its name to Mode Media at its NewFronts event today in New York. Glam chief Samir Arora told Adweek prior to the presentation that the new moniker reflects a commitment to entertainment as well as rebranding its properties beyond its core women's lifestyle offerings.

And he's evidently not kidding about entertainment. Over the last 18 months, his team has quietly developed a consumer-facing video product, which Arora likens more to Netflix than iTunes. Five to 20 percent of the video programming will be original content, but the rest of the shows will originate from syndicated deals made with TV companies. Mode Media has been working with Creative Artists Agency (CAA) to acquire qual

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Admin

Test Yourself. Are You A Psychopath?

1290780?profile=RESIZE_480x480Everyone knows at least one, if you ask my humble opinion.  I have a few prior salesmen and Managers I'm confident would score highly on this subject and I have no doubt that there are far more psychopaths out there than most realize exist.  I'm certain many more in certain career fields than others.  For example there's probably far more in finance than there are in nursing however that's purely my opinion.

Psychopathy is a condition that causes people to display anti-social behaviour, lack of empathy and remorse, and fearless dominance. Find out more .  This test were devised by Professor Kevin Dutton, University of Oxford. He is a best selling author and an expert on the psychopathic personality.

Psychopathy does not always lead to criminal behavior. However when psychopathy is accompanied with low social cognition, it will usually lead to pathological narcissism. This narcissism drives violence behavior towards others and triggers failure in relationship and in keeping an occupat

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Admin

Funday Monday Reads May 19th

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Hump Day Reads May 14th

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  • Normally very bullish Piper Jaffray warns the stealth correction should NOT be ignored.  BofA agrees. CNBC
  • The U.K.'s unemployment rate fell to a 5-year low of 6.8% in Q1, said the Office for National Statistics today, giving more fuel to those calling on the Bank of England to hike rates.
  • The 10 year broke 2014 support.  The 2.6 level is a "magic number for some, as it has been a risk-down, risk-off trigger. There are investors who sell stocks after it gets below 2.6 percent, as it's seen as predicting an economic slowdown" said Art Hogan, chief market strategist at Wunderlich Securities. (click chart to enlarge)
  • Morgan Stanley analysts are calling a bottom in coal mining stocks, seeing a recovery in the thermal coal market pulled forward by the recent polar vortex and extreme cold; inventories have been falling rapidly, and the firm believes thermal coal prices will continue to rise.
  • Following public backlash on proposed Net Neutrality rules, the FCC backtracks and says

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