Today, 11/12/09, the gold market took its first corrective action on the downside. The question many traders will have now is, have we hit the high end for gold this year?
In my latest video I examine that question in some of the internals that I see and feel are important in this market.
As always our videos are free to watch and there is no need to register.
“Research In Motion Ltd. (RIMM) will spend up to $1.2 billion to buy back about 21 million of its shares, or 3.6% of its total shares outstanding. The buyback will start Nov. 9 and last for up to one year.”
That was the headline news today on Research in Motion symbol RIMM so I decided to look at the chart to see what was going on in the “real world”. When I got to the chart, one thing immediately jumped out at me and that was the negative action that this market has shown in the past several weeks. Looking at this market a little closer I was able to see that our “Trade Triangle” technology was 100% negative and that our monthly “Trade Triangle” indicator had turned negative on October 28th at $63.38. This is a major negative in my mind for this market.
In this short video I show you exactly what we expect to see for RIMM in the future. I also share with you some downside targets that we are looking at which may surprise you.
Click here for this informative investment video on RIMM
As always our videos are free to watch and there is no need to register. I hope you enjoy the video and comment about it on our blog.
I have been involved in the securities business for my entire adult life, having been a trader at both the retail and institutional level. Trading stocks, or forex pairs is a wonderful way to stack up money, if you have the experience and knowledge to trade successfully.
Unfortunately, that learning curve can be a steep one, and expensive. With that in mind, I looked over a program to trade equities that is specifically designed for beginners. As you may know, most stock indexes are composites of a basket of equities trading on either the NYSE or the NASDAQ exchanges. These indexes are traded in a variety of methods ranging from Options to Futures Contracts, and usually originate on the Chicago Mercantile Exchange or the CBOT. The nice thing about stock indexes is there is great transparency in trading these issues. The markets are well regulated, liquid, and orderly.
Many novice traders purchase trading robots or exotic trading systems that may cost as much as $10,000 a year, and might gave limited success. I do not recommend purchasing bots or high priced systems to start. I also recommend that all traders “paper trade” on demo account until they are proficient in a single market. I do not recommend trying to trade multiple markets in the learning stage of trading, as each market has a distinct personality and demeanor. Learn to trade one market proficiently, then you might choose to move on to others. Several trade set-ups repeat themselves on a regular basis in the market. This can be attributed, theoretically, to a number of factors.
1. Technical traders trade in tight parameters and use similar indicators. Thus, support and resistance may become self-fulfilling trading patterns.
2. Some behavior economists believe the human response to a given set of trading stimulus is a constant, thus the repetitive set ups for profit.
3. Wave theorists believe the market moves in distinct and predictable patterns based upon the actual chart formations. Whatever the reason, if a novice could learn just one of these consistently profitable trade set-ups, he could be quite adept at trading the markets.
stock and futures trading trade revealed
German trader Karl Dittman has identified one of these patterns with great success and accuracy and has published his work and received a very receptive response, from experienced and inexperienced traders alike. His book, Stock Index Secret Trade would allow the greenest trader to be very profitable over a long period of time. The single trade he uses, is very easy to spot, often overlooked, and is consistent winner. Any novice would profit greatly using this simple but effective system
So what’s going to be the best plan of action for your money in the next three years? Is the value of your portfolio going to be cut in half, or is it going to double? I have my game plan in place, do you have yours?
Well, we have crossed the 10,000 point level on the Dow and the pundits are filling the pages of blogs and business magazines with predictions of all sorts. The question they are asking is a simple one, really. In the absence of any earthshaking news about positive developments in the economy, “what has caused this unprecedented run up?”
In case you’ve been sleeping on MarketClub, then here is another reason why I’m a huge fan…their notification tool titled Alerts. This email alert system gives you the ability to stay on top of the Trade Triangles as well as 18 other breakout patterns! Brad Stafford just produced a video that digs deep into the Alerts as only someone on the inside could:
http://www.ino.com/info/444/CD3257/&dp=0&l=0&campaignid=3
The video will cost you nothing is should be enjoyed by all!
David Adams
But staying on top of the changes and momentum shifts often becomes overwhelming, especially if you’re watching a large number of symbols and open positions, like me. One free tool that I utilize to help me keep on top of my portfolio is called Trend Analysis, from the team that runs MarketClub. Trend Analysis is a daily email analysis tool that gives me insight into exactly what my portfolio is doing.
People don’t look much at supply and demand these days, and they talk about it even less, but it is good ol’ supply and demand that determines the price of all material in a capitalist society. Oil is no exception, and demand has been off for quite some time, hence, the unusually large amount of surplus in our current supply. To combat this, several oil company economists have issued a few reports that indicate the supply is not nearly as large as is being reported, but my gut instinct is to not trust oil company economists.
“Fitch Ratings today made massive downgrades on various vintage ‘05 through ‘08 subprime residential mortgage-backed securities (RMBS), indicating the extent of the fallout related to subprime defaults has yet to subside.
The rating agency slashed hundreds of RMBS ratings further into junk territory”
Then went on to say:
“The projected losses also reflect an assumption that from the first quarter of 2009, home prices will fall an additional 12.5% nationally and 36% in California, with home prices not exhibiting stability until the second half of 2010. To date, national home prices have declined by 27%. Fitch Rating’s revised peak-to-trough expectation is for prices to decline by 36% from the peak price achieved in mid-2006. The additional 9% decline represents a 12.5% decline from today’s levels.”
Fitch explains this:
“The home price declines to date have resulted in negative equity for approximately 50% of the remaining performing borrowers in the 2005-2007 vintages. In addition to continued home price deterioration, unemployment has risen significantly since the third quarter of last year, particularly in California where the unemployment rate has jumped from 7.8% to 11%.”
One of the nice things about scalping emini index futures contracts is the freedom from predicting long term, or any term, for that matter, pricing trends. I simply trade what is on the chart in front of me. I will surely admit that much of what I see leaves me scratching my head.
Did I mention that the stock market, by some indicators, is in positive territory for 2009?
And while I am in a questioning kind of mood, can someone explain to me just how the stock market could be in positive territory for the current year?
I don’t spend much of my time pondering the mysteries of life, such as, “what is the meaning of my existence”, or matters of metaphysical consequence. But the rationale for the recent rise in prices is beyond my little one-watt brain’s ability to compute. I have never seen the economy in such shambles, nor the employment numbers, nor the GDP numbers…..
The Fed has taken extraordinary measures, of questionable theoretical value, to prop up the economy, and the government has spent itself into oblivion.
Did I mention the stock market is up this year?
Maybe I should start contemplating the meaning of life.
By Barry Ritholtz – June 8th, 2009, 9:30AM
Over the past 5 years, I have appeared on various Financial TV shows over a 100 times. But I am also a huge consumer of financial news, in print, on the web, radio, and of course, TV. Being on both sides of the camera gives me a fairly good perspective on what does and doesn’t work on TV. I also have some strong ideas as to what is good and bad TV in terms of providing a social utility, being part of the democratic process, etc.
Indeed, this is a longstanding interest of mine. Over the weekend, I referenced the current Columbia Journalism Review (CJR) issue that focused on the role of the media in the credit crisis, stock market and economic collapse (CJR on CNBC, WSJ & Business Press). This area has long interested me (hence, our media panel at TBP conference). But I was surprised this post generated 100 comments from readers.
One emailer challenged me on CJR’s CNBC piece: “Its easy to complain, but what would you do to “fix” Financial Television?”
Challenge accepted. Here are my general suggestions as to how to “fix” what needs repair on not just CNBC, but all FinTV.
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How to Fix Financial Television
1. Stop Yelling. Stop interrupting. Stop Talking Over Each Other: This is not Jerry Springer, its serious business. People’s retirement and investments are at stake. Please treat it that way.
2. Bring us People We Don’t Have Access to. What various FinTV channels do really well is when they bring us long, thoughtful interviews with the likes of Warren Buffett, WIlliam Ackman, David Einhorn, and others. People we wouldn’t ordinarily have access to. Example: This morning, CNBC had on James Rickard. More of this please.
3. S – L – O – W D – O – W – N
4. Risk: All traders must appreciate the potential downside of trades. So too, must FinTV. Explain stop losses. Understand Risk/Reward. Recognize there are periods when Buy & Hold is a jumbo loser.
5. Lose the Octobox. Fire whoever came up with the Decabox. ‘Nuff said.
6. Separate the Signal from the Noise. Understand that most of the day-to-day action is simply noise. Look at a long term chart, you can barely see 9187 or 9/11. If those major events get lost in the long term trend, what does the intraday jags, kinks and reversals mean? Very little. Recognize that not every data release, slice of news, or rumor is at all significant. Stop treating them as if they were.
7. Fact Check: An awful lot of things on air get stated with authority and confidence. Much of them are little more than junk or pop myths. Why is it that the more dubious a proposition is, the greater the confidence the speaker seems to muster? Consider fact checking as much of the statements that are made on air as possible, and making frequent corrections.
8. Accountability is important: I am astounded at some of the money losing hacks that are various shows again and again. These are the “articulate incompetants” to use Bennett Goodspeed’’s phrase. Why not keep track of the records of guests — and let the viewers know how their past few calls have been. Are they Perma-bulls or bears? Are their stock picks awful? Are they reliable money makers? If not, let us know. (Of course, the better question is, if not, why even have them on?)
9. Bring Back Louis Rukeyser: Not the man, but rather, his style. Wall $treet Week — Rukeyser hosted it from 1970 to 2005 — was plain-spoken, thoughtful and accessible. Quiet, contemplative, discussions, with intelligent market participants, revealing helpful information. The investing public would appreciate something of that sort — again.
10. Sound FX: What is with all the bizarre sound effects every time a screen changes? Its financial news, not a video game. Kill ‘em.
11. Embed your video (on your own website or YouTube) instead of using WMP. At long last, thank you.
12. Investigative Pieces: David Faber seems to have a monopoly on deep, long thoughtful analyses. Be they on Wal-Mart, the credit crisis, whatever, his long format work is a highlight of CNBC. More of these, please.
13. Most stock picks are losers. That’s normal, but the audience does not realize this. A big part of the challenge is informing the viewer that finding the biog winners is a low probability, high outcome event. As in a baseball, a 350 hitter is a star. Explain this to your audience.
14. Stop the Bull/Bear Debate: This is a vast over-simplification of the market, and often does not serve the audience well. There are nuances and variables that get lost when you reduce everything to black and white.
15. Partisanship: Leave your personal politics at home. Viewers don’t care what most of you think.
16. Respect the Audience: We are adults. Treat us that way.
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