This article is mostly for traders who vary their investment levels. If you are a passive long-term investor who is fully invested at all times, just realize that there are sacrifices. In other words, you might ride things up or down longer than you expect. That's why it's important to define yourself and have conviction in [...]
In a Blog Post on September 22, I wrote: "If you are a trader, there is nothing wrong with raising some cash and waiting for more positive signs to appear." Since then, the market has continued to see distribution (professional selling). Last Thursday and Friday (10/2 and 10/3), the market bounced from an oversold condition [...]
Today (10/2/14), the market sold off early but rallied back on strong volume. Here are my thoughts: 1) I like how the Russell 2000 $IWM undercut the low it made earlier this year (2/5/14) and outperformed today. The index has led us on the way down. Now, we need to see if it can lead [...]
Here is a pattern I have noticed in the market about 10 times over the past 2 years: 1) The market goes on a 3-6 week run. 2) The run usually stalls when we get extended from the moving averages, bullishness increases (based on many sentiment measures), and active investment managers are aggressively long the [...]
I always try to keep an open mind when it comes to the stock market. I look at the positive and negative signs and adjust my investment levels accordingly. Unfortunately, I am seeing more negative signs right now and feel that some caution is warranted. NEGATIVES: 1) The number one sign I use to evaluate [...]
For the past few weeks, the financial media has not stopped talking about the Chinese company Alibaba, which is going public this Friday. My biggest concern is that the retail investor is going to get screwed because they have been brainwashed that this will be the greatest IPO ever and they HAVE to buy it. [...]
The Fed is NOT going to raise rates anytime soon. In their statement on Wednesday, I feel their language will remain dovish. Here are my reasons: 1) There is no question that some parts of the economy have improved over the past 5 years, but there are other parts that are still fragile (specifically wage [...]
1) During the 2008 financial crisis, the Federal Reserve stepped in to provide liquidity and took measures to possibly prevent the US from experiencing its worst depression since the 1930s. Whether we agree with what they did is not the point. In their view, the Fed did what they had to do to keep the [...]
Readers of my blog know that I have liked Netflix $NFLX for a long time. I continue to feel it will move higher over the next 6-12 months for the following reasons: 1) Fundamentals - The company has posted triple-digit earnings growth for the past 6 quarters. Their revenues have accelerated to a 25% growth [...]
For the past 2-3 years, a similar pattern has repeated itself in the financial markets. The major indexes start to break down towards their 50-day moving averages, the overall market starts to weaken (usually sparked by a geopolitical event), and then sentiment turns EXTREMELY BEARISH in a short period of time. It happened again over [...]