Fibonacci-Stocks.com has been very successful over the past 15 months by gaining 130% on 19 trades that are listed on the StockTable1 page. You have probably heard the old saying of "buy low and sell high." I finally figured out where you can call an intermediate stock market bottom to satisfy the "low" part of the gain formula. The secret is to pay attention to the NYSE McClellan Oscillator, $NYMO, which is tracked at StockCharts.com. When $NYMO is -80 or lower on the chart, that is the time to buy.
Now, the second part of the winning formula is to know which stocks to buy at the bottom. I prefer to buy ETFs because they are tied to the macro view of the economy which is also in lock-step with the stock market. I previously tried to trade individual companies, but there are too many unknowns about companies that you may never know about soon enough even if the stock has already dropped. It could fall a lot further. Therefore, the ETFs are immune to negative news about just one of the stocks that they may have in their portfolio since they have a wide diversification.
One ETF that I like to trade is IBB, a drug company ETF. Their major holdings are big biotech companies, and drug companies are in a bull market because people are constantly in need of medications. As long as the stock market is going up, IBB will be rising also. So, whenever you can buy IBB at a market bottom, you are 99% guaranteed to achieve a gain.
Another stock that I like is XIV, the inverse volatility index. This ETF is a bet that volatility will go down. Thus, when you buy XIV at a bottom, it is certain to go up as the stock market recovers from bad news. Then, to complete your gain, you must sell these stocks when you are up 10-20% because the market will crash again sooner or later. If you have locked in your profits, you can load up again at the next bottom and gradually get rich through the stock market cycles.
Sunday, July 14, 2013
Tuesday, May 21, 2013
Dividend Streams
During the summer months, it will difficult to know whether the stock market will go up or down. The gradual melting up of stocks is enticing some people to leave the sidelines and buy stocks. However, there is not really a full-blown stream of people rushing into stocks yet.
In the meantime, you could achieve some satisfaction in dividend stocks. Fibonacci-Stocks.com has a page dedicated to several dividend stocks yielding around 4% or more each year. The stock table contains the months of the year when the payouts occur. In some cases, you would need to own the company at least a month before the payout, but in other cases owning the stock a couple of weeks before the payout would be sufficient. A number of the stocks listed at Fibonacci-Stocks.com pay each month. So, you don't have to wait long to get your money. It is definitely worthwhile to assign at least part of your investment money to dividend stocks, and you will notice a certain amount of joy seeing the results over time.
In the meantime, you could achieve some satisfaction in dividend stocks. Fibonacci-Stocks.com has a page dedicated to several dividend stocks yielding around 4% or more each year. The stock table contains the months of the year when the payouts occur. In some cases, you would need to own the company at least a month before the payout, but in other cases owning the stock a couple of weeks before the payout would be sufficient. A number of the stocks listed at Fibonacci-Stocks.com pay each month. So, you don't have to wait long to get your money. It is definitely worthwhile to assign at least part of your investment money to dividend stocks, and you will notice a certain amount of joy seeing the results over time.
Saturday, March 2, 2013
Volatility Returns
There are several reasons that volatility has returned to the stock market. Gridlock between Congress and the President is one reason. Europe is still in bad shape, too. Another reason involves major stock indexes reaching high points of the past, and there is not much gas left to push stocks higher. Finally, we have a number of technical indicators showing volatility in the near future.
The New York Stock Exchange Summation Index, $NYSI, is in a downtrend. The inverse volatility index ETF, XIV, is showing extreme levels of volume, and this is further proof that a downtrend is coming. Then, TLT, the long-term government bond ETF, has started on uptrend, and TLT goes opposite from stocks.
These charts are from Google Finance. Double-click on the charts to expand them for better viewing. I believe the best course of action is to reduce your current long stock positions and buy TLT because I think it can go to $130 per share or more over the next few months.
The New York Stock Exchange Summation Index, $NYSI, is in a downtrend. The inverse volatility index ETF, XIV, is showing extreme levels of volume, and this is further proof that a downtrend is coming. Then, TLT, the long-term government bond ETF, has started on uptrend, and TLT goes opposite from stocks.
These charts are from Google Finance. Double-click on the charts to expand them for better viewing. I believe the best course of action is to reduce your current long stock positions and buy TLT because I think it can go to $130 per share or more over the next few months.
Sunday, January 27, 2013
Stock Market Direction
As of January 25, 2013, it looked like the stock market was overbought and due for a pullback. The yield on ten-year treasury bonds was $1.98 which signifies a lack of interest in bonds, and this occurs at stock market tops. The New York stock exchange bullish percent, $BPNYA, was also showing overbought.
Of course, the stock market can stay overbought for a lot longer than you think sometimes. Also, there is not really any bad news to bring down the market since Congress and the President have deferred their budget battle until May. If there is a pullback soon, it may be wise to buy UDOW, the triple Dow ETF, because this is the best time of the year to own stocks. We could possibly go a lot higher before May if we have a correction sometime in the next month or two.
Of course, the stock market can stay overbought for a lot longer than you think sometimes. Also, there is not really any bad news to bring down the market since Congress and the President have deferred their budget battle until May. If there is a pullback soon, it may be wise to buy UDOW, the triple Dow ETF, because this is the best time of the year to own stocks. We could possibly go a lot higher before May if we have a correction sometime in the next month or two.
Sunday, November 18, 2012
Stock Market Downtrend Is Over
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.
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 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.
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