Several stock market indicators turned positive during the week of November 12-16. First, the President and Congress showed a willingness to cooperate in solving the nation's budget crisis. Secondly, this is the fall rally season. Downturns seldom last for long in the fall as opposed to the extensive May selloffs and summer blues.
Another important indicator was the NYSE McClellan Oscillator. It briefly went below -80 during the week and then immediately turned upward. This scenario nearly always turns into a significant rally. It is time to sell short stocks like TZA and buy long stocks like UDOW.
Another point to make concerning an imminent uptrend is the action of UDOW. Even though the stock price is at a low point, the RSI and MACD have both turned upward. This divergence is an early signal of a trend change. This new rally will probably last several weeks unless some bad world news shortens the trend.
Sunday, November 18, 2012
Sunday, November 11, 2012
Stocks Will Rebound
The stock market fell hard after the election. Several reasons have been given for the downturn, but it probably will not last. For example, the looming budget crisis was one reason that pundits gave for falling stock prices. We had this same situation in August of 2011, and Congress eventually compromised. I believe Congress and the President will agree on a solution once again, and stocks will move higher.
We just completed an uptrend cycle that ran from July to October. Stocks have already pulled back almost to the 50% Fibonacci retracement for this trend. As long as the Federal Reserve is willing to prop up the economy, I believe buyers will soon look for bargains at the current level or slightly lower.
Another reason for a stock rebound is that the economy is still slowly recovering. Unemployment is staying about the same, manufacturing is not plunging, and home-building is looking up. So, it makes sense to keep some money in stocks for the usual fall and winter rally. You could also diversify into bond funds and get paid for waiting.
We just completed an uptrend cycle that ran from July to October. Stocks have already pulled back almost to the 50% Fibonacci retracement for this trend. As long as the Federal Reserve is willing to prop up the economy, I believe buyers will soon look for bargains at the current level or slightly lower.
Another reason for a stock rebound is that the economy is still slowly recovering. Unemployment is staying about the same, manufacturing is not plunging, and home-building is looking up. So, it makes sense to keep some money in stocks for the usual fall and winter rally. You could also diversify into bond funds and get paid for waiting.
Sunday, September 9, 2012
Fall Rally Stocks
The fall rally in stocks has started early this year since Ben Bernanke has implied QE3 is coming and Mario Draghi, the ECB president, has made good so far on his promise to save the euro. Since volatility is almost nothing, XIV has risen dramatically since it is the inverse VIX exchange traded fund. It is a good time to buy XIV because the fall rally will probably continue for a few more months at least.
Another good stock to own is Google (GOOG). The stock has increased more than 40% in the past year, and Google just keeps coming up with more ways to make money. It will probably be safe to own Google as long as the fall rally continues. Supposedly, the stock market is due for a fall in 2013. You could monitor Google to decipher when you should exit stocks. Just go to Yahoo Finance and look at the chart of Google. Then, add the 9 day and 50 day simple moving average technical lines to the chart. When the 9 day moving average line falls below the 50 day line, you should sell Google and play defensively in cash or TLT, the 20 year bond ETF. TLT will go up when stocks go down.
Another good stock to own is Google (GOOG). The stock has increased more than 40% in the past year, and Google just keeps coming up with more ways to make money. It will probably be safe to own Google as long as the fall rally continues. Supposedly, the stock market is due for a fall in 2013. You could monitor Google to decipher when you should exit stocks. Just go to Yahoo Finance and look at the chart of Google. Then, add the 9 day and 50 day simple moving average technical lines to the chart. When the 9 day moving average line falls below the 50 day line, you should sell Google and play defensively in cash or TLT, the 20 year bond ETF. TLT will go up when stocks go down.
Saturday, August 18, 2012
Two Stocks To Own For 100% Gain
The stock market doesn't know whether to go up or down right now. The news is not bad enough for a big downturn and not exciting enough for a real bull rally. Under these conditions, though, you can still make money on two stocks if you are patient.
The first stock to buy is NUGT, the triple gold miners ETF, whenever it is selling for less than $9 per share. It will typically be at that low point whenever the stock market in general has pulled back. Then, be certain to sell the stock whenever it reaches $13 per share for almost a 50% gain. NUGT will most likely reach $13 during several bull rallies over a year's time. If you just catch two of these cycles, you will make around 100% for your money.
A second stock that has predictable annual cycles is TLT, the 20 year treasury bond ETF. People and institutions will run to treasury bonds whenever they have no faith in the stock market. You could buy TLT for $110 per share when the stock market is at a winter high in March. Then, just calmly wait for a May selloff that will eventually run the price of TLT up to around $130. Sell TLT at that point for an 18% gain.
So, owning these two stocks at various times during the year will most likely net you more than 100% for your money if you are patient. You don't really have to be in the stock market all of the time to make money. Just be sure you are in the right stocks at the right time. Then, sit on you hands the rest of the year to make sure you don't lose the money you have gained.
The first stock to buy is NUGT, the triple gold miners ETF, whenever it is selling for less than $9 per share. It will typically be at that low point whenever the stock market in general has pulled back. Then, be certain to sell the stock whenever it reaches $13 per share for almost a 50% gain. NUGT will most likely reach $13 during several bull rallies over a year's time. If you just catch two of these cycles, you will make around 100% for your money.
A second stock that has predictable annual cycles is TLT, the 20 year treasury bond ETF. People and institutions will run to treasury bonds whenever they have no faith in the stock market. You could buy TLT for $110 per share when the stock market is at a winter high in March. Then, just calmly wait for a May selloff that will eventually run the price of TLT up to around $130. Sell TLT at that point for an 18% gain.
So, owning these two stocks at various times during the year will most likely net you more than 100% for your money if you are patient. You don't really have to be in the stock market all of the time to make money. Just be sure you are in the right stocks at the right time. Then, sit on you hands the rest of the year to make sure you don't lose the money you have gained.
Monday, August 6, 2012
Monthly Dividends With Capital Gains
One of the great things about investing is that you can own fairly safe stocks while getting a paycheck from those companies every month. One such company has the ticker symbol of O, Realty Income. They pay 4.3% annually in monthly installments, and the stock has grown by around 33% in the past year. Realty Income is one of the best companies in the world for getting superb dividends and capital gains at the same time.
Another amazing monthly payout company is TLT, Barclays 20 Year Treasury Bond Fund. TLT is part of the iShares group of fixed income, U.S. government stocks. The dividend is only 2.5% each year, but the stock has grown more than 20% in the past year. Gaining 20% or more each year is an investor's dream. Some people think we are in a bond bubble, but I believe TLT can continue to grow. The Federal Reserve has stated that interest rates will probably stay low for the next two years, and they are also actively buying U.S. bonds. We also have a lot of investors and institutions who prefer the safety of bonds, and they have no desire to own a lot of stocks.
Thus, buying O and TLT now may be one of the best things you have ever done. The stock market has lost a lot of steam lately, but good dividend stocks will continue to flourish. You will also get a bit of cheer every month when you see the payout from these two stocks in your investment account. Just be certain to sell the stocks if they drop 10% or more to protect your capital. You can always buy them back later.
Another amazing monthly payout company is TLT, Barclays 20 Year Treasury Bond Fund. TLT is part of the iShares group of fixed income, U.S. government stocks. The dividend is only 2.5% each year, but the stock has grown more than 20% in the past year. Gaining 20% or more each year is an investor's dream. Some people think we are in a bond bubble, but I believe TLT can continue to grow. The Federal Reserve has stated that interest rates will probably stay low for the next two years, and they are also actively buying U.S. bonds. We also have a lot of investors and institutions who prefer the safety of bonds, and they have no desire to own a lot of stocks.
Thus, buying O and TLT now may be one of the best things you have ever done. The stock market has lost a lot of steam lately, but good dividend stocks will continue to flourish. You will also get a bit of cheer every month when you see the payout from these two stocks in your investment account. Just be certain to sell the stocks if they drop 10% or more to protect your capital. You can always buy them back later.
Wednesday, August 1, 2012
Stock Market Timing
A lot of money can be made in the stock market if you learn how to time your trades with a high degree of accuracy. Unfortunately, good timing involves more than knowing how to read the charts. For example, we currently have a paradigm shift in oil supply. We are getting millions of barrels of oil from the Bakken area of North Dakota now as well as new oil in Texas. The Energy Information Administration has been reporting excess inventories of oil that never used to happen. This resulted in the price of oil dropping below $80 per barrel in the last part of June 2012. Moreover, the leveraged oil bear ETF called ERY rose significantly in June. So, the fundamentals are clearly in place for lower oil prices in the future. Don't buy ERY today based on the fundamentals, though, because the stock chart shows a clear downtrend in July. You will be buying at the wrong time.
Then, on top of tricky timing issues that can usually be resolved by due diligence, we have some situations that are beyond are our control. For example, last week, the president of the ECB, Mario Draghi, declared that he would do whatever was necessary to preserve the euro. This caused a tremendous stock market rally including a rise in the price of oil in spite of excessive oil inventories. The oil price rises every time a central banker talks about more money to stimulate an ailing economy because it means that people will have more money to pay for oil. Thus, if you had been long on the oil bear stock, ERY, last week you would have lost money due to conditions beyond your control. The only solution here is to buy ERY at the lowest price on the chart, and be prepared to wait until the political empty promises get broken in the future.
Then, on top of tricky timing issues that can usually be resolved by due diligence, we have some situations that are beyond are our control. For example, last week, the president of the ECB, Mario Draghi, declared that he would do whatever was necessary to preserve the euro. This caused a tremendous stock market rally including a rise in the price of oil in spite of excessive oil inventories. The oil price rises every time a central banker talks about more money to stimulate an ailing economy because it means that people will have more money to pay for oil. Thus, if you had been long on the oil bear stock, ERY, last week you would have lost money due to conditions beyond your control. The only solution here is to buy ERY at the lowest price on the chart, and be prepared to wait until the political empty promises get broken in the future.
Saturday, July 14, 2012
Dividend ETF List .com
Dividend ETF List .com - Home- Dividend ETF List
The above link is a great website for getting information on dividend-paying ETFs. The list includes the dividend amount as well as the history of the ETF. There is also safety in holding these ETFs because they have multiple holdings. Thus, one stock of their holdings that may be declining would be offset by stocks that are doing well. It is also a great idea to hold dividend stocks in our uncertain stock market. You can be paid while you wait.
The above link is a great website for getting information on dividend-paying ETFs. The list includes the dividend amount as well as the history of the ETF. There is also safety in holding these ETFs because they have multiple holdings. Thus, one stock of their holdings that may be declining would be offset by stocks that are doing well. It is also a great idea to hold dividend stocks in our uncertain stock market. You can be paid while you wait.
Sunday, June 10, 2012
Oil Has Found a Bottom at $83 Per Barrel
Unless we have a recession, oil has found a bottom at $83 per barrel. Take a look at the chart on the Money Velocity page of Fibonacci-Stocks.com to see the recent flat bottom of oil's price in the $80 range. The looming European embargo of oil from Iran has put a bottom under oil.
In this current scenario, ERX, a leveraged oil ETF, is the best way to make money. It is selling for $36 per share now, and it could go to more than $50 per share in the next couple of months. That would be a gain of almost 50%.
In this current scenario, ERX, a leveraged oil ETF, is the best way to make money. It is selling for $36 per share now, and it could go to more than $50 per share in the next couple of months. That would be a gain of almost 50%.
Sunday, May 6, 2012
Golden Timeline
Investing in the stock market can be very tricky. If you make the wrong decisions on stocks, you not only lose money, but you also lose time. It takes ten to fifteen years minimum to build up a good retirement. If you lose three or four years here and there due to bad decisions or market downturns, it will be very hard to make up the lost time. The solution is to designate 90% of your investment money to a portfolio that is designed to produce gains year after year. In this way, you will preserve your capital and add to it. Then, if you want to speculate, you could do that with the remaining 10% of your money without destroying your future.
Fibonacci Stocks.com has a great page showing a Golden Timeline plan where you can protect your principal while gaining a lot of money for your retirement. 50% of the portfolio is comprised of high dividend real estate investment trusts that will pay you dividends whether the stock market is up or down. Then, the other 50% of the portfolio involves trading SSO, a leveraged ETF for the S&P 500. SSO will only be bought when it is safe, and profits will be taken after a gain of 12-15%. Then, the cash will sit safely on the sidelines until the next bull trend comes along. You can't go broke if you are constantly protecting your profits.
Fibonacci Stocks.com has a great page showing a Golden Timeline plan where you can protect your principal while gaining a lot of money for your retirement. 50% of the portfolio is comprised of high dividend real estate investment trusts that will pay you dividends whether the stock market is up or down. Then, the other 50% of the portfolio involves trading SSO, a leveraged ETF for the S&P 500. SSO will only be bought when it is safe, and profits will be taken after a gain of 12-15%. Then, the cash will sit safely on the sidelines until the next bull trend comes along. You can't go broke if you are constantly protecting your profits.
Sunday, April 29, 2012
Time To Own Dividend Stocks
Most investors have heard the story many times that the best time to own stocks is the six month period of November through April. I agree with this historical pattern. Another way to know when you should be invested is by comparing the charts of 7-10 year bonds (IEF) and SSO, the leveraged S&P 500 ETF. As you can see in the chart below from Google Finance, SSO crossed over IEF in early January signaling a huge upside for the stock market.
Unfortunately, the best time of the year for owning growth stocks has now past. There is still high interest in the stock market since 10 year treasury bonds are now selling for less than 2% yield. Most people are going to put their money where it will earn the best return. However, the good times for stocks will not last forever. We are now entering the six month period of May through October when stocks are most volatile. If you want to play it safe, you could own a couple of high dividend REIT stocks during this time. AGNC is paying more than 16%, and ARR is paying more than 17%.
Unfortunately, the best time of the year for owning growth stocks has now past. There is still high interest in the stock market since 10 year treasury bonds are now selling for less than 2% yield. Most people are going to put their money where it will earn the best return. However, the good times for stocks will not last forever. We are now entering the six month period of May through October when stocks are most volatile. If you want to play it safe, you could own a couple of high dividend REIT stocks during this time. AGNC is paying more than 16%, and ARR is paying more than 17%.
Sunday, April 15, 2012
Stock Market Trading Range
Most of the gains for the stock market have already been made this year. It will probably be a see-saw battle between the bulls and the bears from April through the November election. Bad news will surface from time to time that will send the market down. Then, through continual inflows from 401K funds, the bulls will eventually restore order again for a while since the money will need to go somewhere.
In this type of environment, a trader can always make money based on whether or not there is volatility in the stock market. If the market is calm, then XIV, an inverse volatility fund can be bought at around $10, and it could be sold at $12 or $13. The profit will need to be taken quickly because it will not last.
Then, for the downside of stocks, TVIX, a leveraged volatility fund could be bought. You could buy it at $8 or lower and sell it when it gets to $9.50 or higher. Then, hang onto the cash until the stock market pulls back again several weeks later. In this way, you can most likely make double or triple digit returns over the rest of the year based on whether the market is acting like a bull or a bear.
Saturday, April 7, 2012
Market Correction Is Here
After an unbelievable stock market run over the last several months, it looks like stocks will finally see some downside for a change. The depth of the downturn will probably depend on whether the economy will show more improvements. Selling has already started ahead of May this year because the stock market has experienced such a long uptrend. TVIX, the leveraged volatility exchange traded fund, will probably be profitable for a while as we move into the summer. Be certain to take profits when you are ahead, though.
Several market indicators point to a downturn in addition to the normal summer pullback. One of these indicators is the New York Stock Exchange summation index. The chart has been going down since February while the Dow 30 kept making new highs. This wide divergence between large caps and all other stocks could not last forever. The strong stocks can carry everybody else for a while, but eventually the large caps go down also. It looked like the Dow 30 finally started going down this past week. The million dollar question is how far the stock market will fall. Stay tuned and be careful about owning stocks for the next few months.
Saturday, February 25, 2012
Bull or Bear
The current stock market trend matters tremendously when you are trying to decide what stocks are worth owning and what stocks should be sold. Long term bull markets will have plenty of bear rallies with the reverse being true in bear markets where short-term bull rallies will occur. Since the middle of December, we have seen primarily a bull market trend. Bears have been gored. One recent example of this has been TVIX, the double volatility ETF. This stock never dropped below $16 per share in all of 2011 and was higher than $100 per share in the first part of October 2011. This all changed starting in December to the present. TVIX was in a free fall during the past three months. If you were expecting the former $16 bottom low to hold, you would have lost money for a while when TVIX dropped below $14.
As of the week ending February 24, TVIX was hanging around the $16 to $17 range with increasing volatility. The volume has been rising since TVIX formed a bowl bottom in the $14 range. The stock has also crossed the $20 mark two times recently. This is a case where you can probably make a small amount of money on TVIX during a bear rally within the greater bull market trend.
How do I know we are are in a bull market primary trend? The best place to look for support on this idea is the St. Louis Federal Reserve website where you will see charts of improving employment statistics along with low inflation and other good economic news. Two good stocks to own in the 2012 bull run are Clean Energy (CLNE) and Westport (WPRT). They are both involved in using plentiful natural gas for transportation purposes. Clean Energy is building natural gas fueling stations coast to coast and north to south. Westport is building natural gas engines for large 18-wheeler trucks, fleet trucks, and passenger trucks. After the nation-wide infrastructure is built, manufacturers will also be building natural gas cars. This revolution could possibly become as powerful as the computer and internet explosion of the 1990s!
Saturday, February 18, 2012
Stock Market Timing
The holy grail of making money in the stock market is knowing when to buy and sell. I have recently discovered a couple of charting techniques that could come close to solving this mystery. I will also give some stock examples and charts to illustrate this. After you sell the stocks according to this timing scheme, it will be imperative to keep the trading money in cash until the next buying signal. This is to protect profits. If you can make 20 to 30% a few times each year from this plan, you will eventually see the value of sitting in cash sometimes.
If you want to know whether we are in a bull or bear trend, just look at a chart of the S&P 100 percent of stocks above the 50 day moving average. If the successful stocks total line is above the 50 day line, then it will be safe to own stocks. You could sell whenever you are up 20% or whenever the S&P 100 bullish chart falls below the 50 day average. One specific stock that you could own to go along with this plan would be SSO, the leveraged S&P 500 ETF.
Another chart plan for buying and selling involves the slow stochastic signal line and the MACD signal line. Pick a popular stock like AGQ, which is leveraged to the price of silver. Whenever the slow stochastic signal line crosses over at the bottom, you should buy AGQ. Then, whenever the MACD signal line crosses downward from the top, you should sell. Buying with the slow stochastic signal will get you in the trade at the best time, and holding on for the MACD downward crossing before selling will smooth out false signals that appear on the upper slow stochastic signal line.
Sunday, January 22, 2012
Sell Silver Stocks
With the Dow getting close to 12,800 we are at an intermediate stock market top, and institutions will soon be taking profits. The European debt situation will also jump to the news headlines in the next two months, and this will send the stock market down again. Another factor in selling silver stocks now is the chart of silver futures at Barchart.com on the futures performance page.
I am planning to sell the leveraged silver ETF, AGQ, on Monday morning. I will be banking a profit of around 17% for being in the stock for less than two weeks. If you can make 17% every two weeks, you could be rich in a short amount of time. Unfortunately, it is not that easy. You are not always able to buy low, and everyone also makes losing trades sometimes.
I believe the long term trend for silver is up, but it will go down whenever the general stock market declines. I plan to buy AGQ again when it drops to $46 per share.
Going back to the futures chart at Barchart.com, this is a great website to monitor whether you should be in or out of commodities or VIX (volatility) stocks. Silver is still positive in the charts, but it has dropped some. It needs to be sold while it is still positive. If you will notice VIX at the bottom of the futures chart page, it has gotten less negative just since Friday. This is the time to buy TVIX, a volatility ETN which tries to leverage whatever VIX is doing on CBOE. I believe that volatility will be rising again soon, and TVIX will be a winner probably during the next month or longer.
Sunday, January 15, 2012
Buy Cheniere Energy
You could have made almost 100% in capital gains if you had bought Cheniere Energy (ticker symbol CQP) a year ago. On top of that, you would have made 8% in dividend payments. I am one of the people who has owned Cheniere in the past, but I did not hold on this past year to reap the big monetary gain.
Conditions at Cheniere changed tremendously in the fall of 2011. They picked up three big contracts worth billions of dollars. They can easily stay in business and do great now. I am buying the company again the next time the stock market opens. The company price may not immediately rise higher, but you will be paid over 8% to wait. I also think that Cheniere could double in price in the next two to three years. This will be a lot more than you can make in a stock market that is only drifting slowly higher.
Sunday, January 8, 2012
The Great Crash Ahead
Harry S. Dent has written a fascinating book on the economy and the stock market entitled The Great Crash Ahead. The book contains numerous charts and tables to explain why the stock market is heading down in the years ahead. The era of easy money is over, and society will never go that way again.
The stimulus plans have failed. On page 239 of the book, the author suggests that the Dow could fall to 5600 by 2014. This is a bitter pill to swallow, but it is more realistic than you might initially think. The baby boomers are retiring, and they will not be putting additional money on the line in a dubious stock market. They will also be selling their investments and using the cash for their retirements. In addition to individual cash-outs, the U.S. government will have plenty of financial problems along with the European nations. These factors will lead to many down days in the stock market. The best way to play this scenario is to buy a volatility index like TVIX for around $15 and sell it at $22. This pattern will also be repeatable for years to come.
Subscribe to:
Posts (Atom)