Saturday, April 12, 2014

The End Of The Correction-Less Fantasy Land [JPMorgan Chase & Co.] - Seeking Alpha

The End Of The Correction-Less Fantasy Land [JPMorgan Chase & Co.] - Seeking Alpha



Chris Ciovacco has written another outstanding article about what severe corrections look like and how long they will last.  It is too early to say where the bottom of this correction is.  We must be prepared for the worst while there is a good chance we are close to a rebound. If the worst case takes place, the stock market could be down for months.



My guess is that we might have another 6% correction like we had earlier this year.  But volatility will continue in 2014.  There may be several 6-7% corrections.  If we rebound from the current downturn, I would be willing to bet we will have another correction in May or June.  Good stocks to buy at the bottom might be SOXL, the 3X semiconductor ETF, and TQQQ, the leveraged Nasdaq ETF.  Then, when the stock market gets near its all-time highs again, that is the time to buy TVIX, the leveraged volatility index because earnings are not that good.  2014 will primarily be a range-bound market.




Assessing The Recent Stock Market Damage [McDonald's Corporation, Utilities SPDR (ETF), iShares MSCI Japan Index (ETF), iShares MSCI EAFE Index Fund (ETF)] - Seeking Alpha

Assessing The Recent Stock Market Damage [McDonald's Corporation, Utilities SPDR (ETF), iShares MSCI Japan Index (ETF), iShares MSCI EAFE Index Fund (ETF)] - Seeking Alpha



Eric Parnell has written a very good article about why the recent stock market decline is most likely just a correction.  He mentioned that the S&P 500 bounced off the 150-day moving average line when we had our 6% correction earlier this year in January to the first part of February.  So, if the S&P falls to 1793, that could be the turn-around point for stocks.



Eric also mentioned that LQD, the corporate bond ETF, is doing just fine.  If we were headed for a bear market, it would be dropping along with the rest of the stock market.  The credit markets are okay.  PFF, the preferred stocks ETF, is also doing well.  XLU, the utilities ETF, is also showing no signs of stress.  An all-out bear market would send XLU down with most other stocks.



Another point that Eric made was that VIX, the volatility index, was behaving normally.  Highs of recent years are only around 21, and we are currently in the 16 range.  If perchance VIX goes above 18, it might keep going to 21 while the S&P 500 moving average might break its 200-day line.  This would probably signal a reversal, though, because the economy is nowhere near a bear market scenario.




Market selloff will stop when the 'smart money' quits selling | Michael Santoli - Yahoo Finance

Market selloff will stop when the 'smart money' quits selling | Michael Santoli - Yahoo Finance



Here is a great article explaining the reasons for the recent stock market sell-off.  Big institutions are basically taking profits.  You have also probably noticed multiple tops in the major stock market indexes.  We don't have enough buyers to push the market higher. That may change after stocks fall 8 to 10 %.



The good news in this article is that the economy is actually okay.  So, we are probably experiencing a large pullback rather than a beginning bear market.  The challenge will be knowing where the bottom of the sell-off is.  When $NYMO, the McClellan Oscillator, gets to -80, that might be the bottom.  It is currently -48.




Friday, April 11, 2014

10 signs that a bear is stalking the market- MSN Money

10 signs that a bear is stalking the market- MSN Money



This is an excellent article by Jim Cramer about bear signs.  It is possible that we will get an oversold bounce on Monday, though.  $NYMO, the McClellan Oscillator is at -48, and a rally will certainly take place soon especially if it goes all the way to -80.  However, the stock market will continue to ratchet down for the near future.  You will have to take profits on short-lived rallies.



Jim thinks earnings will be terrible, and the stock market bull is out of gas for going higher.  Also, China and Japan are not doing well.  This situation will pull down the whole global economy including us.  Our economy is actually doing pretty good right now, but the fact that "good news" is being dismissed means there is a lot of fear in the market, and that is why stocks will keep going down.


Wednesday, April 9, 2014

Tesla Motors Inc (TSLA) news: GM's Ignition Vs. Tesla's Titanium And 'Befuddling' Peak Deliveries - Seeking Alpha

Tesla Motors Inc (TSLA) news: GM's Ignition Vs. Tesla's Titanium And 'Befuddling' Peak Deliveries - Seeking Alpha



Here is a great article on why Tesla (TSLA) is a buy when the price is in the low $200 range.  The author states that Tesla most likely will meet or beat their earnings guidance.  There is also no other electric vehicle that can beat Tesla on distance range before a recharge is necessary.  The company also has excellent service support.  I own shares of Tesla and will buy more shares on significant pullbacks.  Tesla can probably gain more than 30% each year.

Tuesday, April 8, 2014

ETFs: Comparing The Incomparables, A Second Time [ProShares UltraPro QQQ ETF] - Seeking Alpha

ETFs: Comparing The Incomparables, A Second Time [ProShares UltraPro QQQ ETF] - Seeking Alpha



This is an outstanding article by Peter Way about how to gain money through popular ETFs.  Whether we are at a stock market top or not, we will always have oversold situations after a few big days of sell-offs.  That is the time to buy momentum ETFs that formerly lead the market, like TQQQ, the Nasdaq leveraged ETF, TNA, the small cap leveraged ETF, and FAS, the financial stocks 3X ETF.  Peter maintains you can make 110% per year if you trade these stocks correctly.  You must sell when you have a profit, though, and hold the cash for the next sell-off opportunity.



Small caps and the Nasdaq 100 are still the innovators.  TSLA is another stock to buy when it pulls back near its 50-day line.  You could have a core holding of future multi-bagger stocks, but use some of your shares for trading.  If you can make 10% on trading 10 times each year, you will have made 100% on that portion of your money. Virtually every month gives us a chance to buy low, and we can sell some shares when the market gets overbought again so that we are always making money in the present time rather than waiting for a future payout.



  

Saturday, April 5, 2014

Dow Theory Signal Questions Bullish Economic And Market Trends - Seeking Alpha

Dow Theory Signal Questions Bullish Economic And Market Trends - Seeking Alpha



Chris Ciovacco has written another excellent article on how to determine which way the stock market is going.  He presented a 50-day chart of the Dow Jones showing a flat 50-day line, and cases where this occurred previously in 2011 and 2008 resulted in large stock market declines.  Whenever Chris turns cautious and Jim Cramer turns bearish, I will follow their lead and reduce my long positions while buying more TVIX, the volatility index ETF, for downside protection.