Today's Market
Dr Invest

It's up! No, it's down! Everytime I say, "Don't buy yet!" My prediction remains true and you would be wise to listen. Just don't buy. The talking heads proclaim...the market is going up! The next day, the talking heads acknowledge....the market is going down! 

This is a DAY TRADERS MARKET. If you know anything about DAY TRADING, one day, a trader has made thousands of dollars and the next day, has lost tens of thousands of dollars. Even today, we started with a 150 point gain and now has fallen to only a 50 point gain. We could be in the negative by the end of the trading session. This is not what you can call INVESTMENT. The CONSOLIDATION technical (movement sideways) is not where you make money. You make money when the market is in an UPTREND.

The above chart shows a SIDEWAYS MOVEMENT called, CONSOLIDATION. What is troubling is that one cannot predict whether the market will move UPWARD are DOWNWARD. This is the delimma for economists and traders. They have to make money. They need their clients to see them fighting to make money.

Listen, you don't need to make money right now. Stay out of the market! You will be burned. Only enter the market when their is a likelihood that the market will rise. I can only speculate what the market will do at this time. Most of us have heard the story of the reporter that asked the world's greatest stock trader, "What's the market gonna do today? Livermore responded: "It's gonna fluxuate."



One of the indicators use to predict the movement of the market is the price of copper. Many traders use the copper chart in real-time to judge when to get out of trades. (sell) We have been in a period of consolidation which could break toward an UP-Trend or a DOWN-Trend. Looking at the ABOVE CHART, JJC stock, there is a clear DOWNWARD TREND in copper. This makes me very nervous an would indicate that the market will eventually follow copper in a DOWNWARD TREND.

My goal is to "make you money". If you must make money at this time, put your money into C.D.s, but now is not the time to try out stocks or products connected to stocks. Furthermore, neither Treasuries nor Bond Funds can be trusted. The manipulation of the market by QE-1 & 2 has been absorbed by Treasuries and the low return is likely to be surpassed by inflationary pressures. Likewise for bonds, the minimal return will likely be surpassed by increasing inflation. Realistically, inflation is not a problem in a recession or depression. And perhaps the reason that Bernanke is not very concerned about inflationary pressures at this time.

So here's my advice: stay out of the market until you see a month of predictable "unstimulated by the government" growth.

Cheers!

(Note: The above information is soley for entertainment purposes and not to be used for any invesment advice.)

Today's Market
by Dr Invest

Well, the markets sprung to life today by the mere hope that Bernanke would implement a new plan tomorrow, called: Twist and Shout!

Really?  Mr. Bernanke, is this going to actually change the structual problems with the economy or simply raise hopes, so investors will put more money back into the market? Oh, the market is drunk on the news of a new infusion by the Fed. Soaring to dizzying heights at the news of yet another intrusion into the market, the traders came to their senses by the end of the day with the DOW JONES gaining only .07% and the NASDEQ and S&P falling slightly into the red.

Why more stimmulus? Why tweek and manipulate the market yet again? Listen my friend, there are real concerns about Greece, the EURO, and default by PIIGS. (Portugal, Italy, Ireland, Greece, and Spain) The FED has already promised stimmulus help to some of the banks in Europe, using the taxpayer's money from the U.S. The FED is genuinely concerned about the collapse of the EURO, affecting our own economy and subsequent economic collapse.

At this time..... JUST STAY OUT OF THE MARKET!

STAY OUT, BUT KEEP LOOKING AHEAD

There are some things that need to happen before buying a stock. First, a consistent and predictable rise in the stock price; Second, a decline in the immediate risk to investing in a stock; Third, a buying opportunity for the stock; Four, a clear exit plan for selling the stock.

Listen carefully, DO NOT BUY NOW! Since mid-October is an opportunity to buy, I want to see if there is anything that is a BUY. These have to be stocks that are shock proof and predictable.  So I am going to start watching. Here are just a few stocks to start looking at now. But don't buy them now, just because the price is rising, wait until they have at least 20 days of higher highs. (XYZstock opens at $12.90 and closes at $13.10, the second day it opens at $13.10 and closes at $13.30 and so forth.)

COST - Costco Wholesale, is a competitor to Sam's Wholesale. In a depression, where will people shop? Yes, that's right! Where they can get the best prices. Costco carries a wider selection that Sam's. Get a quote on COST for 1 month,  3 months, 6 months, and a year. Is the 20 day moving average going up? This will tell you the trend. What about a 50 day moving average or 200 day moving average. Do this with each stock of interest until you feel certain that your investment will return a profit to you. (If you invested $10,000.00 in XYZstock at $12.90 per share, what would XYZstock have returned to you 20 days later? Or 50 days later? Or 200 days later?) This kind of back-testing is the gold-standard to evaluating a stock.

DG - Dollar General should succeed for all the reasons as Costco Wholesale. FDO-The Family Dollar Store is also a contender, but less-so than Dollar General. Should DG stock remain strong, I want you to think...HALLOWEEN, THANKSGIVING, CHRISTMAS, and NEW YEAR. This past week, while standing in line at a Dollar General, a teacher in front of me purchased 30 black plastic buckets and items to decorate those buckets for Halloween. This is not great analytics, but multiply that purchase by 8,000 stores.

PETM - Pet Smart is where you can get anything for your pet, including the pet. Every dog needs a Haloween outfit. And one thing I noticed about Pet Smart stock is that in 2008 it was hardly changed by the market downtrend. See, people are not going to let their pets starve or go without. I think out of all of the recommended stocks, PETM may the most solid performer.

CATM - Cardtronics places ATMs throughout the world. They have had consistent growth and the projected growth remains strong. Again, think...Halloween, Thanksgiving, Christmas, and New Year. People will be out, people will need money.

What we are looking for are the 20, 50, 100, and 200 moving day averages, which tell us if the stock is consistent and predicable. You want to know that if you put your money at risk, there is a likelihood of a return.

Even if you buy a great stock, a sudden drop in the over-all market could sink the stock you have invested in. If there an impending war or the possiblity of a world-wide economic collapse, it will ruin your potential for profitable returns. These are immediate risks to your investment. Don't put your suitcase of cash in a building that looks like it might burn down.

The "immediate risk to your investment" is of concern at this moment. All of the above stocks show consistent and predictable returns for the past month, but the larger world-economy is in danger of collapsing. That is why even with good stocks, you might not want to take the risks of being in the market right now.

These stocks will grow over the next three months, but a sudden downturn in the EUROPEAN or ASIAN markets could destroy your gains and even put you into the negative. For now, DON'T BUY, JUST WATCH.

(note: The above information is for entertainment purposes only and not to be used for any kind of investment decision.)

Today's Market
by Dr Invest

Building dangerous to enter! You may not notice that something is structurally unsound, but if you only look... and think... you may reconsider taking a chance to explore a collapsing market.

Please review my last blog. I know that this week is being touted as a week of remarkable gains. Other than light volume and continued obvious signs that the market is deteriorating further, it was a good time for the traders to rule the week. And they loved it! Still, someone will have to move their money out first if the economy continues to slide. And that is the problem. The first 10% to sell their stocks will see a 3 to 6% gain from last week's rise, but 90% of those in the market will suffer lost as everyone runs for the exits should the market continue to creep down on the on-going negative news.

I was as surprised as everyone else, when negative news from last week on unemployment did not shake the temporary bull run. Clearly, exuberance has not yet left the market and the expectation is that the downturn in the market is the time to load-up on stocks.

I seldom direct readers to articles not my own, but here is an important read for you. http://finance.yahoo.com/news/Even-the-smart-money-is-apf-759903798.html?x=0 Even the Smart Money is confused by the signals being sent from the market, says David K. Randall. Robert Stein says, "We are in a no man's land." with $1.2 billion under his management, he says that the market is sending more question marks than clear signals of a direction.

Stein slashed his stock holdings by 50 percent in June after poor reports on economic indicators including consumer spending and new applications for unemployment benefits made him think the economy was stalling. He thought then that stocks would pick up during the last three months of the year. That's when he planned to buy, but now he's not so sure.

"We could buy again soon," he says. "But it's equally possible that we could reduce (our stock holdings) even more. We don't see a tipping point either way yet." Since hitting a high for the year in April, the Dow has fallen nearly 11 percent.

Mark Lamkin, who manages $350 million for retail investors and endowment funds as part of Lamkin Wealth Management says, "There is a huge tug of war going on and we don't know the direction." Lamkin says that he tells his clients that they could either lose their capital or an opportunity. "Right now, I'd rather lose an opportunity," he says. Lately, he's moved 70 percent of his client's assets into cash.

If the professionals are moving to cash, what should that tell you? The barn may not collapse, but do you want to take a chance and explore it?  Now is the time to learn about

Today's Market

by Dr. Invest

The past few days have had some good returns for the DOW. One might think, "We are really flying now!" I do feel like I'm repeating myself, but JUST DON'T GET INTO THE MARKET!".

The market has just started to upright itself, but that doesn't mean "clear skies ahead". While flying on a particular airline, the stewards came and quickly gathered all our drinks. One of them announced, "Please secure all items under your seat or in the luggage compartment over-head". In a few minutes, the pilot came on the intercom saying, "We will be going through some turbulence, so please fasten your seatbelts and remain seated the remainder of the flight." This is usually when you think to yourself, "I really need to use the rest room". But really, why all the preparation? I think you know.

The stock market plane hasn't leveled out yet. STAY OUT OF THE MARKET. On Friday, the 23rd is what is known as "triple witching day". Please read the previous blogs to learn more, but I wouldn't rely on the market to return to spectacular gains.

Remember, my goal is not to trade unless the opportunity for success is optimum. September is the poorest in stock performance. While the sophisticated trader could short stocks, our goal is simply to maximize our return when the trend of the market is moving upward.

Look at the chart below:



This is a SEASONAL CHART for FORD, but does show how the market responds differently to a recession and an expansion in the stock market. The DOW also responds simularly. Not always will the market respond as shown by the graph above, because this graph is based upon averages over a number of years. And as you know, you can't predict future returns by looking at past information. In the stock market, there are always exceptions. If you trade based upon the exceptions, you will LOSE MONEY because you are gambling...speculating. But if you know that more people traditionally use heating oil in the winter, and then purchase stock that sells heating oil, you will likely see a good return. A seasonal chart can show you how a stock typically behaves at a particular time of the year and help you get a 5% return or more. You only need to get that return twice a year to enjoy a 10% gain. (before taxes and brokerage fees).

As you move toward the month of OCTOBER, you need to reassure yourself that the market is not going to continue going down. Let me end with the S&P 500 SEASONAL CHART to drive home the importance of knowing if the economy will turn up in October.



The green line represents expansion, the red line represents contraction. Let me ask, looking at the chart, which line do you think best follows our stock market in 2011? Yes, that's right, the red line! I'm not telling you anything you don't already know. The charts show that we are in a "contraction" or "recession".

At this time, you need to buckle your seat belt and remain seated. Turbulent weather lies ahead.

(note: The above information is soley for entertainment purposes and not to be used to make any finanical decision.)

 

Today's Market
 by Dr. Invest

Miracles do exist! It is amazing we fell so low and flew so high today. It seems as though we have missed the bullet, but wait! It is still September, the month in which the Stock Market performs the worst. Even more, we are headed toward the dreaded "triple witching day" on the third Friday of September. You know, the day in which brokers get rid of all those losers and re-situate themselves to take advantage of the growth from October to January. So, don't you just want to take all that cash in your investment account and put it into stocks? Probably not.

Listen, even the best of traders are popping anti-acids right now. STAY OUT OF THE MARKET!  I am here to educate you, so here are some chart patterns you need to recognize. (see www.chartpatterns.com)

Look at the DOW chart for the past three months below:

Now compare the pattern marked in red above with the two patterns below.












So you are right! It is a SYMMETRICAL TRIANGLE IN A DOWNTREND. Remember that your chances of success in trading stocks is elevated when the market is going up (Up-Trend). Likewise, your chances of failure in trading stocks is lowered when the market is going down. (Down-Trend). So you want to learn the old trading adage: "The trend is your friend."

In 1992, John Stossel had a monkey throw darts at a board covered with various stocks. Where the dart hit, Stossel placed an investment. Oddly enough, the monkey chosen stocks, out performed the professionally chosen stocks by investment advisors. This was, however, at a time in which the market was in an UP-TREND. This tells you alot about the power of an UP-TREND.

There will be a time to return to the market, but not now. Over the past 5 years, the DOW JONES has returned an average of 4.2%. In 2010, the DOW returned a whopping 13.8%. Learn more at http://observationsandnotes.blogspot.com/2009/03/average-annual-stock-market-return.html

Remember the 13.8% return for the DOW JONES in 2010, included the performance of both the good and bad months. This return would have been even higher had an actively traded portfolio been utilized for the months of the best stock performance.

(note: The above information is for entertainment purposes only and should not be considered finanical advice.)

Today's Market
By Dr. Invest


Should I say, I told you so? The DOW moved down 101 points, today would have been the day to be out of the market. While the news media might report the 101 point decline of the DOW, they are unlikely to report that RULE 48 was invoked today. This stock trading rule, RULE 48, is implemented only when there is a likelyhood of high volatility at the opening of the market. Simply said, my friend, "Had RULE 48 not been implemented today, the sell-off would have been shocking".

The reason for the big sell-off is that Europe has moved into recession territory and it is likely that we too will be pulled into a recessionary period behind Europe. Maybe the President will elevate our hope once again with a speech that will rally the market; perhaps our own tepid growth will suddenly spring to economic life and vitality; and we know that Bernanke will rise to the ocassion with yet another QE-3 program that will save the economy as did QE-1 and QE-2. But there is a big difference between hoping and action, a big difference between dreaming and reality.

So here's my investment plan for the coming three weeks. I'm staying OUT OF THE MARKET!

The market will likely continue wide swings in volatility. Should Euro-markets continue a decline both Asian and U.S. markets will also follow suit. The U.S. market is barely treading water at a 1% to 0% growth. Economists seem all over the chart on the status of the economy. What is clear, is that if traders and economists are confused, you don't need to be buying stocks right now. It is a sucker's market. Don't play the shell game, the market is only advancing on fumes in the month of September.

(note: the above article is for entertainment puroses only and not to be used for making investment decisions.)

Today's Market
by Dr. Invest

Yes, I have been repeating myself. Don't get into the market now! Over the past two days, both European and Asian Markets have been in a strong decline while we have been on Holiday. Yes, it is possible that we will begin the after Labor Day season with a rise in the market; I think rather, we will see a sharp sell off and further decline in the stock market.

If the economy is to do well in the last quarter of the year, there is still plenty of time to make a good return on your investment without risking the farm. You will still need to determine the market trend in OCTOBER, before returning to the market with your investment. Market Trend, means higher, highs. This means that the DOW consistently is higher day to day, week to week, and month to month.

(Note: The above article is not to be considered "investment advice" and is for entertainment purposes only.)

Today's Market
by Dr. Invest


I'm sure many of you have been waiting to hear from me. The news really hasn't changed. Stay out of the market!

There has been a remarkable climb in the market, only to see the market collapse before Labor Day, erasing the previous weeks gains.

Unless a professional trader with lots of money to lose, it would best to stay away from the market. Here are a few facts about September. Traders, returning from vacation, attempt to reposition theirselves in the market. This means selling losers and buying winners. This always elevates volatility in the market. Second, September is TRIPLE WITCHING DAY. Triple Witching Day is defined as An event that occurs when the contracts for stock index futures, stock index options and stock options all expire on the same day. It happens on the third Friday of September, so wait on making those big investments until October. And only after evaluating the market trend in October.

(Note: The above article is not for investment purposes and soley for entertainment only.)