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These are simple but they changed my trading immensely.  What tip (or 2) would you give to a new investor or trader?

How many times has this happened to you?  You're "in" a stock certain you're certain it's a winner.  You place a $1.00 stop because after all you don't want to lose more than $100. 

The next thing you know you're stopped out, only to see it reverse and head higher without you.  Was it your execution?  Is the market a rigged game?  Are they out to get you.....or was it the $100 you were willing to risk?  Was it, in fact, large enough?

Here are a few basics I've learned since I began actively trading:

1. I don't buy a the open.  I wait for the opening drive to dip down, possibly even test the prior days mid-to low area OR I have a standing order waiting at a major moving average or fibonacci area (I love fibonacci!).
2. I had to erase the thought of risking $1.00 on a trade (unless it's a small stock).  Period.  Zip.  Hands down. Put it out of my head.  After all, i

The debate continues whether China will return to it's incredible 10% GDP pre-crisis highs with voracious appetite for all things commodity.  Or whether given their own housing bubble (with empty subdivisions, malls, amusements parks and college campus's yet to be occupied) will their monetary policy now keep them on more of a sustained 7-8% path going forward. 

Africa, in the meantime, continues to grow.  Indeed the IMF recently predicted Ruwanda's economy to grow by over 7% in 2013.   Although global slowdowns and funding due to Rebel support weighs heavily on the numbers, this type of growth is not to be dismissed (imo) .  For your consideration,  I submit this McKinsey quarterly article on What's Driving Africa's Growth? and ask you:   Is Africa The New China?:

To be sure, Africa has benefited from the surge in commodity prices over the past decade. Oil rose from less than $20 a barrel in 1999 to more than $145 in 2008. Prices for minerals, grain, and other raw materials a

This in follow up to my February post pondering if the shipping index had bottomed which was most definitely chucked in to the round file by most as the market has become convinced the industry is dead.  I still beg to differ.

Being a big believer in moving averages, if I see a stock or Index with rising moving averages, I take it as a sign of buying within a name.  That being said, if I see falling longer term moving averages (100d and 200d), that to me signals trouble; stay away or short any pop.  However when I see longer term MA's flattening.......my curiosity is peaked from a bottom fishing point of view.  My first thought "is the bad news over and is it putting in a bottom?

After writing my February post, I put my money where my mouth was and bought $NAT looking for a reversal out of it's bottom (which it did) and today it absolutely plowed through it's 200d where I banked partial. 

Do I believe that it will hold?  No.  With so many shorts it's certain to be faded *and

Meet "Curt" who, as credit lines worldwide were tightening, lost his middle management job in finance in 2006.  Of course Curt had no idea of what was to come.  He was a good worker, great work and credit history and was lucky to have a nice nest egg saved up.  He wouldn't need unemployment, no.  He'd have a job in no time so he did what every good American in his position would do.  He dusted off his resume, began to network/emailing his resume and paid his bills using his hard earned savings and waited.......for a job that would never come.  

Then bubble burst.  The market began it's long downwards spiral but Curt, undaunted, continued emailing and living off of his savings....and still did not file for unemployment.  Surely something will turn up any day now, he told himself.

For four years.  

Four years of bank failures, branch closings, massive consolidations and layoffs.

By 2010 the stock market was clearly rebounding however it was all over for Curt.  After four long years he ha

Reprinted from http://mauldineconomics.com

Would the Real Peter and Paul Please Stand Up?

By Dylan Grice

In a previous life as a London-based ‘global strategist’ (I was never sure what that was) I was known as someone who was worried by QE and more generally, about the willingness of our central bankers to play games with something which I didn’t think they fully understand: money. This may be a strange, even presumptuous thing to say. Surely of all people, one thing central bankers understand is money?

They certainly should understand money. They print it, lend it, borrow it, conjure it. They control the price of it... But so what? What should be true is not necessarily what is true, and in the topsy-turvy world of finance and economics, it rarely is. So file the following under “strange but true”: our best and brightest economists have very little understanding of economics. Take the current malaise as prima facie evidence.

Let me illustrate. Of the many elemental flaws in macro

For those who found themselves busy fertilizing their lawns and Spring cleaning this weekend, you missed a market-moving decision as Cyprus announced (quite conveniently after Fridays close) an unprecedented levy on all bank deposits of 6.75% for accounts below $100,000 euros, and 9.9% for $100,00 euros and above.  OUCH

Adding insult to injury, if you lived in Cyprus and needed cash from an ATM machine, you were out of luck as  Cypriots awoke to find bank transfers already frozen as the government prepares to seize the assets when their banks re-open on the 19th although the glimmer of hope exists the final vote tomorrow could fail (there must be a joke there somewhere about PIIGS and flying).

All the talk from EU politicians.  All the promises that the Euro would be fine.  All of the money printing.  All of the haircuts already taken.  Blah blah blah blah.......and here we go again.

My hats off to whomever bought the enormous volume in VXX end of Feburary.  (click on chart to

Cue Gomer Pyle. 

The consumer is alive and well.  In fact the consensus for consumer sales was for a paltry 0.6% and it came in at 1.1% with prior revisions being moved up rather than down leaving even Rick Santelli somewhat speechless with nothing to complain over in the details.  This proving once again that all the fear mongering about allowing temporary  tax breaks to expire and dreaded sequestration cuts would kill the consumer were an outright fallacy.   If used to influence votes in Congress and you'd think at some point those men and women would learn how to play the game.

In fact this release could prove to be a game changer from a chartist point of view if the trend continues higher.  While some may remain nonbelievers, we have Easter purchasing as well as Spring dead ahead which can do nothing but boost spending further.  Bring it!

What a shocker people still need to eat and last time I looked, small children continue to outgrow shoes and clothing requiring new.  We a

Recently I became interested in the insurance industry while looking at the valuation of equities in general. I reviewed over 120 publicly traded companies within the industry and found 24 candidates, at least on the surface, that were worthy of further research. I looked at several areas to determine worthiness. Return on equity, shareholder friendliness, and consistent retained earnings growth were the primary determinants for worthiness. Arch Capital Group Ltd. (ACGL) was one of the 24 companies left after my initial analysis. As you all know, my analysis eventually leads me to reading annual reports. The ACGL annual report for 2004 is the cause for the following discussion(ok, monologue). The 2004 report is yet another shining example of why investors need to read the annual and other SEC financial reports released by the companies in which they invest.

In my world, purchasing stock in a publicly traded company is literally becoming part owner of said company. Any profits made by

Today was a typical Saturday.  I began to scan my watchlist, ran through the indexes and flipped through my favorite web pages for tidbits of stockmarket insight.   At one point I noticed that in wake of yesterdays selloff in gold/silver, suddenly people were posting seasonal charts for gold and silver.....as if they had just been discovered.  Helllllo McFly.   No, there is no seasonal demand for  the shiny stuff here.  Hasn't been; move along.  Economies are healing; meaning there's less of a need to hedge yourself with gold and bonds.  With no demand and less of a flight to safety,the big boys are taking profits.  Again, nothing there, move along.

I think some people just stopped paying attention but world economies are less bad, period.  While we're not out of the woods, unemployment is stabilizing.  Jobs are coming back, albeit slowly and low paying...but things are no longer deteriorating.  Maybe the gurus out there just didn't want their subscribers to know the secret to their a

Leading up to the market peak, shippers made the fatal error of buying the boom frenzy and ordering the construction of new ships.  Once credit markets constricted it was too late for shippers to turn back.  By 2009 the dime had been dropped, orders placed, payment promised, they saw a total a total collapse of freight rates; each battling the other for dwindling world wide business (see video)

Many traders believed QE would lift all boats (pun intended) and struggled over and over again to find a bottom in the Baltic Dry Index but to no avail.   Wasn't China going to stockpile again?  For years we had be "programmed" to that belief.  Many simply did not comprehend the impact of world-wide tightening and slowdown, even in China.  Voracious demand did not return and oversupply of vessels meant freight rates continued to see pressure even with the Feds money printing as new ships continued to be delivered.  

Then finally, a glimmer of hope.  Moodys projected that most new ships would b

You know those moments.......when you were at a family function or out for a few cocktails with friends when someone brought up the topic of the economy or stock market.  Those conversations were fairly easy to side step  and ensure you'd still be on speaking terms tomorrow.  The last five years, however it's an entirely new ballgame and avoidance is not becoming any easier.  I think the basic problem for the general public (and many small investors) is that they expected a snap back in jobs in 2-3 years, as is normal after a recession.  The problem isn't the current administration.  The problem is that we didn't simply experience a recession.  We experienced a global financial crisis which is a horse of an entirely different color.  

You really can't blame them for not understanding the difference between the two.  Most haven't been alive long enough or have knowledge of economic history to realize the ramifications.  According to a White House Crisis and Recovery in the World Economy

Growing up on the South side of Chicago, you learned two lessons at an early age.  If it was Sunday afternoon you didn't walk in front of the (tiny black & white) television screen and you never, ever tried to change the channel if the Bears were playing.........not if you were partial to keeping your arm.  Sunday afternoons were a time of pigskin worship and the Superbowl.....the ultimate homage.   Those were our idols.  Our supermen.  Plowing through linemen in December slush with chunks of turf in their face mask; there was no greater glory.  Just how much longer this sport remains as it is, I'm beginning to worry.

I don't say this because of the sky high regular season tickets prices with an average of $144 a piece; sufficient to feed a family of four for a week.  It's not because it's falling in popularity.  In fact according to a Harris poll, in 2012 football became the #1 most popular sport in the U.S. surpassing America's past time, baseball.   In fact betting on NFL games i

My infatuation with technology, internet, and social media companies has passed for the most part. I rarely pay attention to any of them. I will admit to keeping one eye on Google and Amazon. Google has a moat that isn't easily overcome. Amazon is really a low cost retailer that interacts with it's customers through the internet. Let me restate that, Amazon is THE low cost retailer, the Walmart of the internet, so to speak. All that being said, you must be asking yourself “Why in the hell is he writing a blog about Pet Med Express?”. Let me give you some background on how I ended up here, writing this.

As many of you know at StockBuz, I use the Vuru website frequently while researching companies. It provides some nice tools and the price is right, free. Anyway while visiting the site and scanning the discussion area, I came across a post by user Alexleroi about Pet Med Express (PETS). Generally I find that user's posts very insightful. In the post, he pointed out two major issues with

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Growing in popularity, price matching has become the norm however I see it truly mutating and it's only going to get worse [for margins] if you ask me. 

Times were when clipping coupons in the Sunday paper saved you a buck or two with some retailers offering double coupon days and Senior discount days [generally the day before the new ad was to be released] in order to clear old merchandise off the shelf.  For those of us struggling to budget with small children, double coupon days at Venture and Zayres was a boon and if there was a Blue Light Special on ham at Kmart, we were there.  That was the 70's and inflation was taking a bite out of our pocket.

Evolution slowly lead to price matching between retailers *if* you had a valid ad in hand and your checker called over the Manager for approval who would scrutinize every detail, glasses pulled down to the tip of his nose.  This alone guaranteed you a good 5-10 minute wait [mininum], usually with a runny-nosed whining child, impatient a

A long standing theory of reversals for Technical Analysts, buy [or sell] a break of a third trend line has been around for ages.  Also considered by some as the Fan Principle, it allows you to wait for supply and demand to battle it out and jump in when the winner [trend reversal] finally reveals itself.........not to mention with a nice base for support [or resistance].

Very often a consolidation within a trend is considered a "resting period" before another leg down [or up] continues but how can one tell if the trend is truly over?  That's when a break of a 3rd trend line comes in handy.

It worked quite well when the U.S. Dollar reversed.

I also utilized the method getting long WLT @ $29.60 [just to name a few]

Now I've been stalking bonds to the short side along with every other market participant after having been long TLT in the Spring of 2011 [now flat] but this chart of TBT has truly piqued my curiosity.

I'll be waiting and watching for a 3rd tre

Are you a news addict?  A market junkie?  Are you fully functional to walk away or are you hooked?  Do you need the fix on your television every day?  Can you make it through the trading day without the bias and noise?  Just grab the morning's econ numbers and step away; cold turkey?  I triple-dog dare you.

Ignore the plethora of pontificating pundits [or as I call them *smidiots*] chanting that the market is cheap.  The CEO's cheerleading for their own product; always painting a rosey future picture [even if they have to change that forecast down the road].  Seriously?  Can you say bias?  Turn off the clowns whose job is to entertain you as they "educate" and convince you to "buy buy buy!".   The *anal*ysts  playing tug-o-war, "my way is better" over sectors; each with his own belief system of valuation.  P/E is the way to go.  No, it's price to cash flow, tangible-book-value, forward earnings vs. TTM [trailing twelve month for you newbies] or whatever justification they can find t

So the markets now are driven by the fiscal cliff.  What will happen?  If they don't do something, the markets will plunge.  If they come to some sort of agreement, the Dow would be up 1,000 points. 

Nobody wants to be long on a failure to come up with a solution, and nobody wants to miss the boat on a 1,000 point Dow rally.   OK, 1,000 points is not much.  Maybe I should say 2,000 points.

In any case, this reminds me of a recent Howard Marks interview where he talked about the European situation.  He says there are three things he can say for certain about the situation:

1. He doesn't know what will happen in Europe
2. Nobody knows what is going to happen in Europe
3. If you ask an expert what they think will happen and take their advice, it would be a mistake.

So to apply this to the current situation:

1. I have no idea what will happen in Washington with the fiscal cliff
2. Nobody knows what will happen in Washington with the fiscal cliff
3. If you ask an expert what they think will happen and take the

A discussion in Chat the other day prompted me to pull out some charts to demonstrate visually the points being covered.  On this topic Ryan and I agree.  Specifically, that seeing a double high in price just isn't enough in our book to call something a double top with any form of confidence when risking my money.  Rather I would prefer to see some form of negative divergence in indicators to lead me to believe that the trend is weakening and ready for a reversal.

Now the learned gentlemen @ FreeStockCharts.com lay out some great guidelines in their Chart School on double tops:

1. You have to have a prior trend to reverse.
2. Volume increase on the breakdown [as they clear out stops] is helpful to confirm.
3. Time.  I'm also in agreement with them that I prefer to see one to three months elapse in the building of the two peaks.  Remember, big money is placing their buy/sell orders based on weekly and daily timeframes.  That's not to say that these conditions cannot exist intraday [5/15

It’s a very basic human trait. It happens all over the world, and people have been doing it since time immortal. Comparing ourselves against how we perceive our neighbors, coworkers, family, and friends is the inevitable result of striving to get ahead in this world. For the last decade, American’s have increasingly relied on credit to ensure that their house was just as big as the one next door.

Unfortunately, as we’ve seen over the last few years, this trend has come back to bite many of us where it hurts most; our checkbooks. The Huffington post estimates that nearly half of America are liquid asset poor, and many might not even realize it. Too many of us now live at a barely sustainable level that leaves us vulnerable to a single financial blow such as a medical emergency.

Savvy real estate investors need to understand this all too familiar condition and keep it foremost in their mind. Making sure that you can afford to sit on a purchase for longer than you mind be comfortable with i